Lucrative: As global demand for macadamia nuts grows, investing in its production promises ever increasing returns. Picture: SUPPLIED
Lucrative: As global demand for macadamia nuts grows, investing in its production promises ever increasing returns. Picture: SUPPLIED

The macadamia nut industry is young and developing at a rapid pace because of growing global market demand. As a "superfood", macadamias are good for human health and for investment portfolios.

In SA, macadamias are one of the fastest-growing agricultural crops, with more than 3,500ha of new plantings established annually over the past two seasons. Agricultural companies make up 4.3% of market cap on the JSE and include stalwarts Senwes and Kaap Agri as well as Crookes Brothers, which expanded its sugar cane, banana and deciduous offerings by entering the macadamia industry in 2012.

Global macadamia supply levels represent only 1.2% of the overall tree nut volume that is marketed every year, having risen 46% over the past 10 years. SA, Australia and Kenya lead global production by making up almost 70% of global supply.

Further heavy investment in macadamia by farmers could lead to a 300% increase of global supply in the decade to come, according to a recent report from the International Nut and Dried Fruit Council.

China, a major importer of macadamia nuts, has invested heavily in planting and is expected to take centre stage in future years as a producer. However, the subtropical climate of Southern Africa’s growing areas offers a competitive advantage to China’s mountainous orchard terrain that endures much colder weather.

The low supply volume makes it difficult to develop new products with macadamias as an ingredient. But new varieties are being discovered and commercialised, and plant husbandry is also constantly being developed.

Macadamias are a snack nut and are sold as kernel and in-shell products. The kernel market is mainly whole and half nuts, which are widely used in luxury blends and trail mixes. As the most expensive tree nut with the least accessibility, they are also a key product in the ingredients market, used to upsell other products.

Roasted in-shell macadamias are popular in China and this market has been growing strongly over the past decade, with China importing up to 40% of SA’s total production, according to China’s National Industry Association.

As a "superfood", macadamias are high in fat and energy. Up to 86% of the fat is monounsaturated (the heart-healthy kind of fat). Monounsaturated fat helps lower cholesterol and decreases the risk of heart disease and stroke. They are also one of the only food sources of palmitoleic acid (a type of monounsaturated fatty acid that may speed up fat metabolism, thus reducing the body’s ability to store fat).

Macadamia nut oil is fast becoming a favourite among top chefs around the world. Not only is it healthier than olive oil and canola oil, but it also has a higher smoke point than olive oil, which means that it can be cooked at higher temperatures without breaking down and losing its flavour.

Another health benefit comes from the nuts’ flavonoids (the same compounds that give red wine its healthful claim to fame), which help lower blood pressure and protect against some forms of cancer.

Perhaps the best reason to enjoy macadamia nuts is that they are 100% cholesterol free. They are also a source of vitamin A, iron, protein (2g per serving), thiamine, riboflavin and niacin. They contain small amounts of selenium (an antioxidant), calcium, phosphorus, potassium and magnesium.

According to 2017 figures from the South African Revenue Service, the total value of macadamia exports for the year totalled R3.3bn. SA exports 95% of its macadamia crop and the main destinations are the US, Europe, Middle East and Asia.

The weighted average gross price for macadamia kernel in 2017 was $17.36/kg and the early 2018 crop is selling at a small premium to this price. The in-shell market prices are $6/kg and higher.

After considerable research into the macadamia industry, Crookes Brothers acquired a derelict farm in Gurue, northern Mozambique, in 2012, ideal for macadamia production due to its subtropical climate, fertile soils and high rainfall.

To date, the company has established 413ha of macadamia orchards, harvesting the first small crop in 2017, and plans to increase to 800ha over the next 10 years. Our on-site, temperature-controlled dehusking, curing and warehouse facility ensures highest standards and product quality are attained.

Crookes Brothers is optimistic about the future growth potential for macadamias in Southern Africa and has already started to see returns after the first harvest.

Despite the expected growth of Chinese production, we are not too concerned as the yield and quality of current Chinese planting performance is very poor and any improvement is likely to be slow. That said, macadamia volumes need to increase for the product to be taken seriously as an ingredient by confectionery companies, as it is currently regarded as a niche product.

Duncan is group operations executive at Crookes Brothers.