Banana, sugarcane farmers in South Africa switch focus to macadamia nuts

Booming demand for macadamias is transforming farmland in eastern South Africa, as landowners switch focus from bananas and sugarcane to the creamy nuts used in sweet treats from ice cream to cookies.

First introduced in South Africa in the 1960s, evergreen macadamia nut trees are grown on farms across the Limpopo, Mpumalanga and KwaZulu-Natal provinces, with about 2,000 hectares (5,000 acres) being added every year. The country, which vies with Australia as the top grower and exporter, produced about 28 percent of the world’s total output in 2015, according to data from the International Nut and Dried Fruit Council.

“The macadamia story is a beautiful one,” said Richard Mattison, one of the biggest private growers in South Africa, who has about 600 hectares of the trees on his farm near Port Edward, south of the coastal city of Durban. “In 2009, we got about 5 rand a kilogram of nuts. Now we’re getting between 110 and 120 rand.”

Estimated global consumption of macadamia nut kernels surged 59 percent between 2010 and 2014, according to INC data. Yet the nuts, which are either sold in their shiny, brown shells or processed to extract a round, creamy kernel, only account for about 1 percent of global tree nut production, with almonds, cashews and walnuts leading the rankings.

South Africa’s output is likely to more than double by 2020, according to Alex Whyte, head of Europe, Middle East and Africa sales at the Green Farms Nut Company, which processes about 25 percent of the domestic crop. The country may harvest as much as 45,000 metric tons of nuts this year, according to the Southern African Macadamia Growers’ Association. About 95 percent of production is exported, with China, the U.S. and Canada among the biggest buyers.

Besides an expansion in planting — farmers added 7.5 million new trees last year — yields are also improving as growing techniques improve.

“From extracting between two to three tons a hectare, we’re now getting between six and seven tons,” said Mattison.

Production of top quality nuts in the sub-tropical coastal region of KwaZulu-Natal is expanding faster than any other place in the world, according to Andrew Sheard, technical manager for Mayo Macadamias, which processes and markets the nuts.

Macadamia nut trees inter-crop well with bananas, making their cultivation a “no-brainer,” he said. “An established banana plantation provides the perfect micro-climate for a macadamia sapling.”

Splitting the Risk

William Davidson, who farms in Umfolozi, about 220 kilometers (136 miles) northeast of Durban, is among those cashing in on the macadamia boom. He has about 60 hectares of the trees under cultivation, in addition to crops of sugar cane, timber and bananas, and plans to plant another 140 hectares by October.

“It’s all about splitting the risk and diversifying with a crop that the market can’t get enough of,” Davidson said.

Courtesy Bloomberg