International Nut and Dried Fruit Congress 2015

MARKET CONDITIONS Average prices indicated as follows: Macadamia nuts US$18/kg Hazelnuts US$14/kg Pistachios US$11/kg Almonds and walnuts just over US$10/kg Brazil nuts and cashews just over US$8/kg Prices are high but so is demand!!

High import duties are driving the smuggling. At 38% it is unaffordable! CHINA Subsidies must be renegotiated Chinese want high quality nuts

EUROPE AND USA European market remains somewhat depressed Greece indicated an increase in demand despite economic troubles. USA sales will increase as customers acclimatise to the new prices. Germany expects to see growth but must have a stable supply to secure market share. The UK is still somewhat sensitive to high prices but this does not have an overly big effect on the total market as the entry of China has pushed up demand.

Research on health benefits diffuse high prices as people will pay more if they perceive it to be healthy.

New markets India shows huge potential as macadamias are considered a luxury snack India has driven huge demand for almonds and cashews and there is scope for macadamias. But India too requires high import tariffs which would have to be renegotiated by our industry bodies if we are to tap into that market. South Korea is also a market that we will be looking into.

PRODUCTION South Africa currently produces nearly t of macadamia nuts. This is an increase from t the previous year. The closest competitor is Australia with a crop of t and Kenya with t.

Australia has only panted an additional 1500ha over the last 5 years. Anticipated that production won’t go past t. Australia farms mostly dryland and averages about 2,7t/ha. AUSTRALIA Increases will likely come from an increase in yields due to research and development rather than orchard expansion. Australia sent 30% of their crop to China last year, which will increase now that the duty has been dropped.

Concern over Chinese plantings unfounded Chinese having problems growing their own macs. China should be seeing a yield of t by 2020 from the trees that are currently in the ground. Currently they produce 8000t and import a further t from Australia and about t from South Africa If the market is treated properly China’s consumption could reach t CHINA

Vietnam imported 30t of seed nut last year from Australia with the help of government subsidies. This should produce thousands of hectares, which necessitates further market development to ensure that the demand stays steady VIETNAM

SA exported t of kernel last season. Expected that around 50% will be exported NIS this year EXPORTS

CONSUMER INSIGHTS Hamdi Ulukaya, CEO of Chobani Yogurts Today’s consumer wants to buy products from people they know. Trend towards what is pure and natural. Other trends may fluctuate but consumers will always go back to the basics. Consumers want transparency in the food chain. If it is not there then the consumer will lose interest in the product.

Muhtar Kent, CEO of Coco-Cola There is a strong emerging middle class and this segment should reach 800 million people by Consumers are demanding brands whose products are produced sustainably. Rapid urbanisation makes it easier for companies to find and connect with their customers. Marketing focussed on health aspect. Packets indicate on front that it is a 100 calorie pack.

THANK-YOU!