Falling prices hit Macademia nut industry

The macadamia nut industry, struggling with a fall in prices, is aiming to improve yields through the adoption of new varieties and extension services offered by a local processor.

The crop, mostly grown in Central, Coast and Western provinces, yields around 12,000 metric tonnes of  nuts each year. Despite high gains in previous years, farmers and processors are struggling with a fall of almost 50 per cent in world prices, from Sh70 per kilo last year to between Sh30 and Sh40 this year.

Equatorial Nuts Processing Company manager Michael Gatua said last year’s high prices followed the world’s leading producer, Australia, losing much of its crop to bad weather.

“This was only superficial. Farmers should have known that weather is unpredictable,” he said. The drop in market price this year discouraged many farmers, with some even abandoning their trees. But some are weathering the drop.

“I pocketed more than Sh20,000 from the 300kg I harvested last year,” said Janet Wahito, a farmer. “But owing to prolonged drought last year and poor prices, I do not think I will make better returns. I have only harvested 180Kg this season.” Still she said though the prices dropped, the crop still pays better than most other cash crops.

Another producer, Martin Kanyoro, said he would continue tending to his trees but wont spend much capital on them.  “I will let them mature on their own without spraying them,” he said. “Before the crop became economically viable, we still used to harvest some nuts even without applying fertilizer and spraying with chemicals.”

But Mr Gatua cautioned that letting quality slip is dangerous, and urged farmers not to neglect their trees.

“World markets are dictated more by the quality. If the quality is poor from the farms, it affects the whole chain of marketing,” he said, adding such slippage could hurt Kenya for years to come.

“Buyers may black list the Kenyan product if the quality is poor,” he said. He added the industry is much better off today than in the early 1990s, when Sh8 per kilo was the going price.

Some processors also allege that unprocessed nut exporters are hurting the industry by paying slightly more but not creating many jobs in the chain. Kenya Farm Nut Company field operation manager Joseph Muturi said non-processing exporters already take in more than 50 per cent of the in-shell nuts produced every year in Kenya.

“The traders are engaging local firms in unfair competition,” he said. “They are able to throw a shilling or two above what local dealers pay to the small scale farmers since they do not pay any taxes nor incur processing costs.”  But farmers also prefer to deal with the non-processing companies, as they pay  up-front, something many local companies are unable to do.