Food and agribusiness financial services provider, RaboBank, has recorded evidence of a period of growth for Australia’s tree nut industry – expecting significant almond and macadamia orchards maturation over the next few years to provide opportunities to meet growing international demand.
The release of the Australian Tree Nut Outlook report has collated opportunities and risks in markets for almonds and macadamias, with a focus on the growing appetite for tree nuts in export markets, particularly China, and the chance to develop innovative product offerings to increase local demand.
The Rabobank report states Australian almond exports have grown faster than the global average, at nine per cent compound annual growth rate (CAGR) over the past decade, compared with global exports at five per cent. Australia currently accounts for only 9.5 per cent of global almond exports, with 110,000 metric tons kernel weight (KWE) exported in 2023.
For macadamias, Australia represents 25 per cent of global trade, reaching 17,200 metric tons KWE in 2023.
RaboResearch analyst and report author, Pia Piggott, said the positive consumption trends in tree nuts, and more broadly in snacking, will drive Chinese consumption growth over the next decade.
“China is a key market for Australian almonds, and an indefinite tariff on US almonds going into China makes Australian origin almonds less expensive than California almonds, which supports preference for the Australian product and a price premium,” said Piggot.
“As China and India, another major tree nut market, have limited domestic production, we expect further growth in imports will be required to meet demand, which Australia's growing production is well placed to provide.”
China remains the most favourable market for Australian macadamias, with 54 per cent of Australia's total exports shipped to China in 2023.
Piggott said low per capita supply, rising health awareness, the rise of discounted snack stores and recovery in Chinese consumption support continued growth to China as the largest market for Australian almonds and macadamias.
Other key tree nut export destinations included Vietnam, Spain and Turkey.
Domestic demand
When it comes to the local Australian market, health and convenience trends haven’t been enough to grow domestic tree nut sales. As innovative offerings of tree nut products are presently limited in the domestic market, Piggot said this as an opportunity to grow local demand.
“Exports are the primary market for Australian tree nuts, however the domestic market consumes 19 per cent of almond supply and 22 per cent of macadamia supply,” she said.
“Australia has the highest per capita consumption rate of macadamias in the world at 0.15 kg/year. However, as a premium-priced tree nut, household penetration is low, with only 14 per cent of households purchasing macadamias per year. Australia also has high almond per capita consumption, at 0.95 kg/year in 2023.”
For Australian consumers, tree nuts are most often consumed as a snack, and Piggott said even with a comparatively lower price point, only 39 per cent of households purchase almonds per year.
“With supportive macro demand drivers including population growth and high disposable incomes there is plenty of room to boost domestic demand,” she said.
“With the qualities of being tasty, energising, and quick and easy to consume, the healthy nutritional profile makes tree nuts a go-to product, aligned with broader convenience and health trends.
“However, cost and more exciting alternatives such as cereal, chips and yoghurt remain barriers to consumption. Despite significant shifts in wholesale prices, asymmetric price transmission has limited consumer response in demand and as such supply to the domestic market has remained stable,” said Piggott.
Compared to global retail environments, innovation in tree nut products in Australia remains limited, particularly regarding flavour profile.
“In the US, the range of flavoured tree nuts rivals potato chips. Viral trends have caused Australian internet searches for pistachio nuts to rise, but innovative offerings are missing at a local retail level,” said Piggott.
“For tree nuts to compete against substitutes and grow demand, investment in product innovation is required. With many health claims, tree nuts are a go-to ingredient to appeal to consumers in the snacking category,” she said.
Prices
The Rabobank report showed high global supplies had seen almond and macadamia farmgate prices fall to unsustainable levels in 2023. Although prices have made some recovery in 2024, the operating environment remains difficult for producers.
“Longer-term price expectations for almonds remain favourable as reductions in acreage in California, the world’s largest producer of almonds accounting for some 80 per cent of global production, is helping to rebalance the global market,” said Piggott.
“Macadamia prices should recover to more sustainable levels, however there is downside risk as global supplies are increasing rapidly.”
Australian plantings
Australia’s current almond production is reaching peak maturity, with future plantings expected to grow at low levels.
The Rabobank report said that from 2024 to 2030, industry forecasts Australian almond production to grow at a four per cent CAGR, reaching 210,000 metric tonnes kernel weight equivalent by 2030.
As current almond and macadamia orchards in Australia mature over the next few years, further orchard development opportunities exist, but production growth will be restricted by resource availability and rising global competition.
Permanent plantings in the Murray Darling Basin – a key almond-producing region – are at risk of water shortfalls in periods of drought, although almonds are likely to remain the highest-value use case for water.
“Australia has over 62,000 hectares of planted almond orchards spanning across the southern Murray Darling Basin,” said Piggott.
“Annual plantings peaked in 2018 and have since declined year-on-year but remain significant (<2000 hectares a year). As such, the national maturity profile has grown from 60 per cent of orchards bearing in 2018 to 91 per cent in 2022.”
The report also stated that macadamia production is expected to double by 2030.
“Industry forecasts Australian macadamia production to grow at a 13 per cent CAGR to 2030, tripling the growth rate of the previous decade,” said Piggott.
“Record farmgate returns in 2020 led a period of growth in investment in new macadamia plantings, with the total orchard area reaching 41,704 hectares in 2024. Subsequently the last two seasons have been difficult for producers with increased margin pressure from higher costs due to inflation and global increases in production bringing prices down.”
The Australian macadamia industry is receiving significant investments from organisations such as Hort Innovation, developing new macadamia varieties, and the University of Queensland, which is conducting a long-term breeding program using genomic selection.
