The MACNUT Association, representing local macadamia nut processors, has made an urgent appeal to the Kenyan government to address the significant challenges facing the macadamia nut processing industry. The association cites the direct export of raw, unprocessed macadamia nuts as the primary cause of financial losses for local processors, reduced income for farmers, and widespread job layoffs.
In 2023, the Ministry of Agriculture temporarily approved the direct export of basic raw, unprocessed macadamia nuts to alleviate unsold stock. However, this decision has inadvertently attracted a surge of Chinese nut-in-shell (NIS) exporters, who have been purchasing primarily grafted nuts—50% of the crop—through brokers. This leaves the indigenous nuts, a crucial part of the local produce, unsold and undervalued, causing significant financial strain on Kenyan farmers who rely on the cultivation of both varieties.
According to the MACNUT Association, the consequences of this policy shift have been devastating. Export revenues from processed kernels have plummeted from KES 6.9 billion before the export restriction to just KES 3.3 billion, resulting in a revenue loss to Kenya exceeding $50 million. The decline in local processing has also led to job losses, with over 5,000 workers already laid off in the first half of 2024. If the situation persists, it is projected that an additional 20,000 workers could lose their jobs by mid-2025.
Mrs. Jane Maigua, Chairperson of the MACNUT Association, expressed her deep concern, stating, “The Kenyan macadamia sector, which has thrived for over a decade through the export of processed kernels to the USA and Europe, is now on the brink of collapse. The government’s directive has severely limited the availability of nuts for value addition by Kenyan processors, putting us at a competitive disadvantage in global markets.”
The association highlighted that while Chinese buyers are benefiting from Kenya’s raw nut exports, local processors are struggling with increased production costs and reduced access to quality nuts. The Chinese market’s rejection of low-quality nuts has further compounded the problem, as rejected produce is often mixed with higher-quality nuts and sent back to local processors, affecting the overall quality of Kenyan exports.
Furthermore, the shift to exporting unprocessed nuts has led to environmental concerns. Local processors traditionally use macadamia nut shells as a sustainable fuel source for their drying processes. However, the new nut-in-shell export companies are now resorting to using wood, raising sustainability issues.
The MACNUT Association also warned of the long-term consequences for Kenya’s position in the global market. Major buyers from the US and Europe are turning to other macadamia-producing countries due to the shortage of kernels from Kenya. This could result in an irreparable loss of market share, with Kenya’s global market share already having fallen from 13%.
To address these challenges, the MACNUT Association is calling for the following actions from the government:
- Re-evaluation of Export Policies: Immediate reinstatement of the ban on raw NIS exports to protect the local industry and ensure the quality of Kenyan exports.
- Farmer Empowerment: Initiatives to educate farmers about market dynamics and ensure they receive fair compensation, reducing their reliance on brokers.
- Investment in Local Processing: Government incentives to encourage investment in local processing facilities, enhancing the competitiveness of Kenyan macadamia nuts on the global stage.
- Quality Standards: Establishment of stringent quality standards for both raw and processed nuts to maintain Kenya’s reputation for excellence.
- Sustainable Agricultural Practices: Promotion of sustainable farming practices to ensure the long-term viability of the macadamia industry and the environment.
- Stakeholder Consultations: Regular engagement with stakeholders to understand and address the challenges on the ground.
Mrs. Maigua concluded with a stark warning: “Our local macadamia nut processing industry is on the brink of collapse due to the direct export of raw unprocessed nuts to China. We are losing our competitive edge on the global market, and the livelihoods of thousands of Kenyans are at stake. We urge the government to implement policies that support local processors.”
The MACNUT Association’s call to action highlights the urgent need for government intervention to secure the future of Kenya’s macadamia industry, which plays a crucial role in the country’s economy and the livelihoods of many Kenyans.
