South Africa has solidified its position as the world’s leading producer of macadamia nuts, with production growing at an average annual rate of 9% since 2010, driven by expanded planting areas, maturing orchards, and favorable weather conditions. However, the 2025 season is projected to see a 4% decline in output compared to 2024 due to adverse weather, with estimates ranging between 90,000 and 94,000 tonnes of nut-in-shell (NIS). As China, the second-largest producer, ramps up its macadamia production, South Africa’s industry faces both opportunities and challenges. This article examines the future of South Africa’s macadamia sector, considering China’s growing influence, market dynamics, and strategies for sustained growth.
South Africa’s Macadamia Industry: A Global Leader
South Africa’s macadamia production has surged from 16,000 tonnes NIS in 2006 to an estimated 90,000–94,000 tonnes in 2025, accounting for over 30% of global supply on a kernel basis. The industry, centered in northeast Limpopo, eastern Mpumalanga, coastal KwaZulu-Natal, and George in the Western Cape, benefits from ideal subtropical climates and fertile soils. With 1,300–1,500 growers farming an average of 50 hectares each, South Africa exports 95% of its crop, primarily to China (50%), the US (25%), and Europe (15%). The sector’s growth has been fueled by:
- Rising Demand: Global interest in macadamias as a healthy, plant-based “superfood” rich in healthy fats, fiber, and antioxidants has driven demand, particularly in snacks, confectionery, and cosmetics.
- Orchard Expansion: Planted areas have grown by 6,000 hectares annually, reaching over 50,000 hectares by 2020, with production projected to hit 80,000–100,000 tonnes by 2030.
- Economic Impact: The industry generates approximately R5.1 billion annually and employs over 10,000 permanent and 9,000 seasonal workers during the February–August harvest.
The projected 4% decline in 2025 production (from 95,500 tonnes forecasted in March to 90,000–94,000 tonnes) stems from adverse weather, including excessive rainfall and temperature fluctuations affecting flowering and nut set in key regions. This follows a pattern seen in 2020, when unfavorable weather led to a 17.7% drop to 48,295 tonnes. While South Africa’s 2023 crop reached 77,532 tonnes, up 12% from 2022, the 2025 shortfall highlights the industry’s vulnerability to climate variability.
China’s Growing Production: Opportunities and Threats
China, with an estimated 74,500 tonnes in 2025 (up from 69,500 tonnes in 2024), is the second-largest macadamia producer and South Africa’s biggest export market, consuming 50% of its crop. China’s production growth, particularly in Yunnan and Guangxi provinces, poses both opportunities and challenges:
- Market Dynamics: China’s kernel consumption matches North America’s and is expected to become the largest globally. Its inshell market, driven by cultural preferences for cracking nuts, has rebounded post-COVID, but high prices can suppress demand due to its elasticity.Competition: China’s expanding orchards could reduce reliance on South African imports, potentially flooding the market and pressuring prices. South Africa faces a 12% tariff in China, compared to Australia’s 0% tariff, creating a competitive disadvantage.Opportunities: Rising Chinese demand offers South Africa a chance to deepen trade ties, especially if US tariffs (10% in 2025) disrupt exports. South Africa’s world-class processing facilities and high-quality nuts maintain its edge.
- Market Volatility: The 2022 price collapse, driven by panic selling and global economic pressures, exposed vulnerabilities. While 2023 and 2024 saw recovery, with South Africa clearing carryover stock, price fluctuations remain a risk.Trade Barriers: US tariffs, introduced on August 7, 2025, at 30% (later negotiated to 10%), and China’s 12% duties hinder competitiveness. Uncertainty around the African Growth and Opportunity Act (AGOA) adds further risk.
- Logistical Bottlenecks: Delays at ports like Cape Town and Durban, costing industries like apples and pears R1 billion in 2024, also affect macadamia exports. Inefficiencies in rail and port infrastructure threaten timely delivery to global markets.
- High Costs and Long-Term Commitment: Establishing a macadamia orchard costs around R60,000 per hectare, with trees taking 3–7 years to mature. Pest, disease, and labor-intensive harvesting add to expenses.
- Fragmentation: Over 40 processors and exporters compete, often undercutting prices, eroding value, and causing inefficiencies. The pistachio industry’s consolidated model in California offers a contrast for potential reform.
- Climate Risks: The 2025 production dip underscores weather dependency. Climate change could exacerbate drought, frost, or excessive rain, impacting yields and quality.
Opportunities for Future Growth
Despite challenges, South Africa’s macadamia industry is poised for significant growth, with projections of doubling production to 180,000–190,000 tonnes within a decade. Key strategies to ensure sustainability include:
- Improved Genetics: Varieties like MCT-1, which yield 40–50% more than standard cultivars, are being tested in South Africa to boost profitability. TopNut is establishing screening blocks to evaluate performance under local conditions.
- Value-Added Products: Innovations like macadamia oil, eco-wood from shells, and kernel use in baked goods and confectionery enhance profitability. Green Farms Nut Company’s Shisa eco-briquettes, shortlisted for a 2025 sustainability award, exemplify this trend.
- Market Diversification: Expanding into Asia (Japan, Taiwan, South Korea), the Middle East, and the African Continental Free Trade Area (AfCFTA) can reduce reliance on China and the US. Only 7% of production serves the domestic market, offering room for local growth.
- Consolidation: The World Macadamia Organisation (WMO) and SAMAC are fostering industry cohesion to align strategies and strengthen global positioning. Reducing processor competition could stabilize prices.
- Infrastructure Investment: Privatizing ports and improving rail freight, as urged by the apple and pear industry, could streamline exports. The Cato Ridge Inland Port could serve as a hub for AfCFTA markets.
- Sustainability and Innovation: Adopting climate-smart practices and leveraging technology, such as John Deere’s efficient tractors, can lower costs and enhance resilience.
China’s production growth necessitates a strategic response. South Africa must:
- Strengthen Trade Advocacy: Lobby for reduced tariffs in China and secure AGOA exemptions in the US to maintain market access.
- Enhance Competitiveness: Invest in high-yield varieties and processing efficiency to counter China’s lower-cost production.
- Diversify Markets: Target emerging markets to offset potential oversupply from China, which could depress global prices if its output exceeds demand.
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