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Johannesburg - South Africa’s macadamia nut industry, the biggest in the world since it accounts for 30% of global production, has called on local producers, processors and marketers to urgently find other markets for their products or risk massive losses.
The industry is reeling from a clampdown on rogue traders in China – the biggest importer of South Africa’s macadamia nuts – who have been convicted of bypassing import duties and smuggling the produce into China.
As a result of the crackdown, nearly half of the country’s annual macadamia harvest, more than 22 000 tons, has no buyers as most of the stock was destined for some of the traders and middlemen who have been caught bypassing import duties.
Derek Donkin, CEO of the SA Subtropical Growers’ Association, said local growers who dealt with rogue Chinese traders would be compelled to pay the 19% import tariff if they wanted to continue exporting nuts.
“Import tariffs to China are 19%. This means that import tariffs will have to be paid and growers’ returns will be affected.
“The returns may not drop by 19%, but the lesson is that circumventing duties is always risky,” said Donkin, adding that the market was still available for macadamia exports to Europe and the US.
Jill Whyte, CEO of Green Farms Nut Company, said the crackdown in China had left the local macadamia nut industry in chaos, with growers searching for new ways to sell their harvest.
“That’s very difficult to do overnight. Many farmers may now sit with high levels of carry-over stock and, as a result, substantial losses. As building a macadamia farm is a long-term commitment, with trees taking up to seven years to bear fruit, we have always ensured that the farmers who supply us have access to multiple markets.
“Even though prices in China have been attractive and therefore very tempting in terms of increasing one’s exports, we’ve never exposed our producers to the risk of any one market going sour for whatever reason,” said Whyte.
With illegal traders no longer supplying cheap finance, most of South Africa’s macadamia harvest for 2015 will now have to find other markets.
“The Chinese crisis in the macadamia industry is a reminder for the rest of South African agriculture that the basic rules for success don’t change.
“Spreading one’s risk and working with marketers and processors with global relationships, which can offer access to economies of scale and can exert influence on off-takers, are the keys to long-term sustainability,” said Whyte.
The crisis comes against the backdrop of the South African citrus industry’s recommendation to suspend the packing for export of organic lemons to the European Union (EU).
Deon Joubert, who is the special envoy at the Citrus Growers’ Association, said in a statement that the suspension decision was taken after the EU notified the department of agriculture, forestry and fisheries of three consignments of South African organic lemons with citrus black spot, a fungal disease.
“The decision to ring-fence the commodity and remove any possible risk stemming from it was not an easy one.
“Moreover, it comes with a hefty price tag and financial loss for organic lemon growers.
“The South African industry commends these growers for demonstrating this sort of responsible behaviour and leadership,” said Joubert.
