As different commodities face uncertainty regarding the looming United States’ 30% tariffs, the macadamia industry is estimating a drop of between R120 and R400 million should the tariff duties be imposed from 1 August.
Macadamias South Africa (Samac) chief executive officer, Lizel Pretorius, said the US is an important market for SA. Prior to the tariff announcement by the US, their anticipated export share to the USA (2025) would have been ±20% of the total crop.
Pretorius said export volumes to the USA in 2024 was 6 297 tons of kernel. “The US is a kernel market. US macadamia production is very limited (in Hawaii), thereby requiring South African production to meet US demand. A large portion of these exports are used as ingredients in a number of iconic USA food products.”
US a critical market for SA
“The majority of South African macadamias are exported raw to the USA, allowing USA ownership of the value add, creating employment and wealth for the USA,” she explained.
Pretorius said without a doubt, farm gate prices could push returns below the cost of production and cause job losses. This is something the industry and the country could not afford, especially considering the fragile economy that the country is facing.
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“Taken into account the letter that our government received on 7 July from the US, there is still time until 1 August for our government to negotiate with the US on the 30% tariff.
“Furthermore, to develop markets takes time, as macadamias are less than 2% of the total nut basket (almonds, pecans, pistachios, etc), and there you need to educate consumers about macadamias, their exceptional health benefits and then promote consumption. It is a process that can not be done overnight,” she said.
Knock-on effect on rural communities
Pretorius noted that local macadamia producers are burdened with disproportionately high tariffs compared to global competitors in key markets like China with 12%, India 30%, and South Korea 30%. “To remain competitive and to grow markets, we need tariffs to be reduced to 0%,” she said.
Meanwhile, KwaZulu-Natal macadamia farmer Siphelele Vumisa said if the tariff goes ahead, it will make nuts more expensive for the USA consumer, who will buy less.
“This means the price to the farmer may have to drop so that we can sell our nuts. This means less money back to the farmer and could seriously compromise the industry in South Africa, especially for all new farmers who have borrowed money to establish macs and budgeted around R60 per kg.
“If prices drop to R45 per kg or below, farmers will be unprofitable and this will have a knock-on effect on rural or farming communities,” he said.
Vumisa said the potential for the Middle East/Asian market has not been fully exploited. He added that for the survival of the industry and farmers, the other option could be to divert the market in that direction, with the hope that the industry sustains itself.
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