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22 July, 2020 Country Product Spotlight

Industry Highlight: Australian Macadamias

Industry Highlight: Australian Macadamias


This Country Product Spotlight is the second in a series of industry and market overviews in the Nutfruit magazine. This report provides a snapshot of the Macadamia industry in Australia, with data, analysis, and trends. Additionally, there is an article on conservation, update on the latest health findings, and new product launches.




Production

Macadamia F. Muell is an evergreen tree of subtropical and tropical origin indigenous from Australia. Constituted by four species, Macadamia is endemic to the lowland subtropical rain forest of eastern Australia and has a discontinuous distribution from south-east Queensland to northeast New South Wales.
 
Macadamia is unique in the sense that is the only member of the Australian flora that has been developed as an international horticultural food crop. The species Macadamia integrifolia and M. tetraphylla produce a high-valued and oil rich edible kernel; initially a component of the diet of the indigenous peoples of Australia, it is today the basis of a growing international industry and consumed as a snack, confectionery, bakery products and ice cream, or as oil.
 
M. integrifolia, although native from Australia, was introduced in Hawaii (USA) in the late 19th century. The commercial expansion began at the beginning of the 20th century with the establishment of first’s seedling orchards followed by the development of grafting techniques in the mid 1930’s, and the subsequent clonal propagation of elite trees and release of commercial cultivars. Currently, the majority of industry cultivars are derived from the M. integrifolia cultivars or hybrids of M. integrifolia and M. tetraphylla. The cultivars developed in Hawaii as well as the A series from the Australian Hidden Valley Plantations breeding program, of the Bell family, are the base of the contemporary breeding programs. The A series includes the A16, A38 and A203 cultivars that have been widely planted due to their higher kernel recoveries.
 
From the 1970’s to today, the macadamia industry has experienced a rapid growth, reaching a global crop of 230,000 metric tons (MT) in-shell basis/60,000 MT kernel basis (at 3.5% nut in-shell moisture content (NIS mc)) in 2019. Following this increasing trend, total macadamia crop for 2020 is forecasted at 232,120 MT in-shell basis /60,900 MT kernel basis (@ 3.5 NIS mc) and this annual increment is anticipated to be sustained throughout the present decade as the planted areas keep expanding in some of the major as well as in the emerging producing origins (Figure 1).

Australia is one of the world’s biggest macadamia producing origins, accounting for about 30% of the world production (2009-2019 average) along with South Africa and Kenya. The crop is also produced commercially in many tropical and subtropical regions throughout the world: Asia (China, Vietnam), America (Hawaii, Guatemala, Brazil, Colombia) and other regions of Africa (Malawi) (Figure 1)[1234].

The industry has grown spectacularly in just 45 years. In spite of the seasonal variations, the macadamia crop in Australia clearly followed a growing trend over the last 25 years. Production levels doubled up between 1995 and 2019 and sustainably increased over the last five years, ranging between 43,000 and 49,300 MT in-shell basis (@3.5 NIS mc). Due to extreme high temperatures and drought events during the 2019 spring and early summer, the 2020 crop is forecasted at 36,500 MT, below the recent seasons’ average (Table 1).

In Australia, macadamias are grown mostly along the East Coast by 800 growers, covering 28,000 ha with 8.7 million macadamia trees (2019). In Queensland, the Bundaberg region adds up to 41% of the country production; Northern Rivers, in New South Wales, accounts for the following 35%. The rest of the growing areas are distributed from Mackay (QLD) to Nambucca (NSW) plus a small share in Margaret River in Western Australia (Figure 2).

New area under plantation is largely being converted from former cane land. Bundaberg has recently experienced the fastest production growth, equally owing to both new growers entering into the industry and established growers expanding their orchards. The Australian Macadamia Society reported that significant new plantings are expected over the current and the next year in Queensland and in New South Wales and to reach up to 35,000 ha by 2025. Besides, considering that one-third of the planted macadamia trees have not yet reached full production, the crop is anticipated to keep growing up to 70,000 MT (3.5% NIS mc) in 5 years’ time (Table 1)[5].

The Australian Macadamia Society has been promoting and coordinating the industry’s research and development, innovation and marketing actions since 1974. With over 700 individual and business members, the organization accounts for more than 85% of Australia’s macadamia production

Apart from the planting expansion, there are many elements significantly contributing to the Australian macadamia industry production leadership:
 
  • Australian macadamia is a relatively young, yet well-coordinated industry through its peak body, the Australian Macadamia Society.
  • Huge involvement and commitment of Australia’s macadamia growers and processors to good and sustainable agricultural and post-harvest handling practices. Some examples are the integrated orchard and pest and disease management. These holistic approaches allow to improve productivity and the environment simultaneously while promoting biodiversity.
  • Implementation of innovative technologies conducive to higher productivity per unit of land area. For instance, tree shaking technology has been adopted in the region of Bundaberg, improving harvest efficiency and quality. Automation is expected to expand to other producing areas as well. Water use efficiency is also being improved through precision agriculture tools.
  • Conservation of genetic diversity: Australia’s rare wild macadamia trees are the world germplasm reservoir and, in the case of macadamias, this is especially relevant as most commercial cultivars come from a very narrow genetic base. Therefore, these wild genes need to be protected and conserved as they hold the potential for future breeding programs and further development of the industry. Therefore, aiming to conserve the remaining wild macadamia trees in their native habitat, the industry established the Macadamia Conservation Trust (MCT), a not-for profit organization. In 2019, the MCT launched a new macadamia variety with a smaller and more open canopy which enables excellent light penetration and is a good producer[6].

Trade

Being one of the top world macadamia producers, Australia is also one of the largest exporting and consuming origins.

Around 80% of the macadamia produced in Australia are processed to be sold as kernels (shelled macadamias), with an average international/domestic sales ratio currently around 70/30.

Australia accounts for about 20% of the world macadamia kernel international shipments. During the last decade, annual exports have amounted to 6,500 MT on average, reaching the last decade record of over 7,800 MT in 2019 (Figure 3).

According to the last 5-year average (2015-2019), about 10,400 MT of macadamia kernels are sold annually, from which, 33% accounts for domestic sales (Figure 4) and the remaining 67% are exported. Around 61% of Australian kernel exports are bound to Eastern Asia, being Japan (27%), China (15%) and South Korea (9%) the main destinations. Europe imports add up to the following 22%, from which, Germany, as the leading importing country, concentrates half of the volume. With 17% of the share, USA is another of the Australian macadamia top importers (Figure 4).





When analyzing the international kernel shipments in terms of average annual growth over the last five years, the biggest increments in imports were observed for Japan, South Korea, China and the USA (Table 2). Europe, as a mature market, presents a more stable volume of imports.


In spite of being a well-established market, imports to Japan have shown a sustained growth trajectory throughout the last decade, ranging from over 1,100 MT in 2010 to the 2,300 MT record of 2019. In this origin, macadamias are traditionally used as an ingredient in chocolate confectionery, although the snacking and bakery category has expanded in recent years. As for the in-shell market, China and Hong Kong are the top importers for Australian macadamia (Figure 5).

In China, in-shell usage predominates over kernels. As per the AMS data, currently, although the kernel segment is expected to be strongly developed in the coming years, 95% of macadamia usage accounts for in-shell, while only 5% is used as kernels.

Free Trade Agreements: Macadamia as well as other goods and services trade has been enhanced by several Free Trade Agreements (FTA) that entered into force during the last decade. FTA can improve market access across all areas of trade –goods, services and investment– and help to maintain and stimulate the competitiveness of Australian firms (Department of Foreign Affairs and Trade, Australian Government).

Consumption

Globally, macadamia kernels are mainly consumed as a snack (60%), followed by its use as an ingredient (30%) in confectionery, bakery, etc.[7] From producing origins, Australia along with the US, China and Brazil are among the top consumers. Germany, Japan and South Korea rank first as non-producing consuming countries.

Australia is the most established market for macadamia and it remains as the top raw macadamia kernel consumer per capita. It shows the highest annual per capita consumption in the world –160 g per capita (2019)– ahead of the US –40 g per capita– and every other market, meaning that Australians eat on average 4 times as many macadamias as the next top consuming country, the US. That is principally because macadamias in Australia are mainly a snack product, while in other mature markets, such as Japan, the bulk of macadamias is still used in confectionery. Another main difference between Australia and the rest of the world are the pack sizes: in Australia, there is a big range of macadamias packages, up to 500 g, whereas throughout Asia and Europe they are much smaller (125 g, 40 g or 8 g). Furthermore, in Japan for example, macadamias are sold as part of nut mixes, whereas in Australia it is possible to buy macadamias separately. Besides, macadamias are sold locally with the fresh produce, side by side with fruits and vegetables in the supermarkets and this has increased the domestic consumption drastically[8].

Australia, Keys to the highest domestic consumption of macadamias in the world:
• High availability in the markets.
• Individual and big packages.
• Sold side by side with fresh produce.
• Mainly consumed as a snack.

References:
[1] Hardner, C., Costa e Silva, J., Williams, E., Meyers, N., & McConchie, C. (2019). Breeding New Cultivars for the Australian Macadamia Industry, HortScience horts, 54(4), 621-628.
[2] Hardner, C. M., Peace, C., Lowe, A. J., Neal, J., Pisanu, P., Powell, M., et al. (2009). “Genetic resources and domestication of macadamia,” in Horticultural Reviews, ed. J. Janick Hoboken (Hoboken, NJ: John Wiley & Sons), 1–125.
[3] Nock, C. J., Hardner, C.M., Montenegro, J. D., Ahmad Termizi, A. A., Hayashi, S., Playford, J., Edwards, D, and Batley, J. (2019) Wild Origins of Macadamia Domestication Identified Through Intraspecific Chloroplast Genome Sequencing. Front. Plant Sci. 10:334.
[4] INC Database
[5] Australian Macadamias Yearbooks (2018 and 2019 issues). Australian Macadamia Society.
[6] Australian Macadamias Yearbook (2019).
[7] Australian Macadamias Yearbook (2019).
[8] In Australian Macadamia Society, personal communication (May 25, 2019, Boca Raton, Miami, USA).

 
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