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NEWS RELEASE 98-077; OCTOBER 14, 1998
October 14, 1998
News Release 98-077
Inv. No. 332-386
U.S. MACADAMIA NUT INDUSTRY FACING
AS GLOBAL COMPETITION INCREASES, REPORTS
World production of macadamia nuts has risen 67 percent since
1992, reaching a record
output of 72,914 metric tons in 1997, reports the U.S.
International Trade Commission (ITC)
in its publication Macadamia Nuts: Economic and Competitive
Conditions Affecting the U.S.
The United States was the world's largest macadamia nut producer
according to the report. However, in 1997, Australia replaced
the United States as the
world's leading producer.
The ITC, an independent, nonpartisan, factfinding federal agency,
recently completed the
report for the U.S. Senate Committee on Finance. As requested,
the ITC reported on the
competitive factors affecting the U.S. macadamia industry,
including competition from
Australia, Kenya, South Africa, Malawi, Guatemala, Costa Rica,
and Brazil, as well as trade
practices and barriers of the competing countries that impede
U.S. macadamia nut exports.
Following are highlights of the report.
- The United States was the world's largest consumer of
macadamia nuts during 1992-97, the period covered by the report,
and accounted for 51 percent of world
macadamia consumption in 1996-97. Japan was the second
country, accounting for 15 percent of world consumption, and
Australia was the third
largest, accounting for 13 percent of world consumption.
- U.S. macadamia nut production reached an all-time high of
26,309 metric tons in
crop-year 1997/98, up 21 percent from crop-year 1992/93.
Production in crop-year
1998/99 will most likely be below 1997/98 levels because of
drought in Hawaii.
- Australia's macadamia nut production also reached a peak of
27,500 metric tons in
1997/98, up 129 percent from crop-year 1992/93. Australian
production in crop-year
1998/99 is also expected to be below 1997/98 output because
- Globally, the area planted to macadamia trees has expanded
since crop-year 1992/93.
Although the U.S. planted area has remained almost
unchanged, the area planted in
key producing regions such as Australia, Guatemala, Kenya,
and South Africa has
increased 50 percent since 1992. As these newly planted
trees mature, world supplies
of macadamia kernels will likely increase.
- World macadamia supplies currently exceed demand and are
depressing prices. Farm
prices reported by the Hawaiian Agricultural Statistical
Service fell by 5 percent from
$1.72 per kilogram in 1996 to $1.65 per kilogram in 1997.
- Asian macroeconomic troubles are contributing to lower
macadamia nut prices in
1998. Asian tourism to Hawaii and Australia, a principal
source of demand for
macadamia nut products, declined in 1997 and early 1998,
following two years of
strong growth. Import demand for U.S. and Australian
macadamia products in Asia
is declining as well.
- Since the price declines in the early 1990s, the U.S. and
Australian industries have
employed different marketing approaches. Australian
exporters have launched a
generic campaign to boost demand for macadamia nut products
in export markets in
Asia, Europe, and North America. In contrast, U.S. firms
have focused on
promoting products under their respective brand names or as
U.S. and Australian interests disagree over the relative
benefits of these different
approaches as mechanisms for allocating current and expected
increases in worldwide
supply of macadamias.
- Based on breakeven nut-in-shell prices, the relative costs of
growing macadamias are
generally higher in the United States than in Australia. In
the United States, the
break-even price ranged from $1.21 to $2.03 per kilogram,
compared with $0.58 to
$1.28 per kilogram in Australia.
Macadamia Nuts: Economic and Competitive Conditions Affecting
the U.S. Industry (Inv. No.
332-386, USITC Publication 3129, September 1998) will be
available on the ITC's Internet
server at www.usitc.gov. A printed copy may be
requested by calling 202-205-1809 or by
writing the Office of the Secretary, U.S. International Trade
Commission, 500 E Street SW,
Washington, DC 20436. Requests may be faxed to 202-205-2104.
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