The biggest processor of macadamias in Australia has frozen payments to growers, even as some of its suppliers confront the massive task of recovering from floods.
Marquis Macadamias is the world's largest macadamia company and controls 43 per cent of Australia's production and 16 per cent of the global nut-in-shell.
It is owned by growers from Australia, South Africa and Kenya, but it recently cut prices to growers here to just $2.50/kg (nut-in-shell), down from $6/kg two years ago.
Now it has advised growers that scheduled payments for the last crop due will not be paid.
Growers receive an initial payment when they supply their crop, with more scheduled throughout the year.
The amount of scheduled payments can vary depending on how the crop is selling.
'Disaster' for growers
Rowan Liebmann, a NSW grower who supplies Marquis, described the decision as a disaster.
"The cash flow has evaporated, there are flow-on impacts for property values, holidays are off [and] discretionary spending is squeezed," he said.
Mr Liebmann said growers who were hit by the floods were struggling.
"Some of them can't harvest their crops and it won't just be this year. Next year will be very lean as well," he said.
This year has been a 'shocker'
Marquis is not responding to enquiries from the ABC about the suspension of payments, but in a recent interview chief executive Larry McHugh described this year as a "shocker" for the industry.
"It started in COVID when demand fell a little bit, and then we started running into bigger crops," he said.
Production globally has increased from 250,000 tonnes last year to 300,000 tonnes this year and is expected to reach 600,000 tonnes in a decade, but Mr McHugh is hopeful things could improve for growers.
"2006 and 2007 was the last time the industry had a really big price decline and it was a similar situation to this, a brief oversupply, but we did climb out of that and we saw good prices for 15 years and hopefully we can get ourselves into that position again," Mr McHugh said.
He said the current low price was piquing the interest of some large manufacturers globally and he had not seen any impact of the low prices on investment in the sector.
Sungold offering a higher price
Meanwhile, another processor is offering a higher, fixed price for growers.
Grower co-operative Suncoast Gold has a processing plant in Gympie and general manager Julian Lancaster-Smith said the grower/shareholders would be paid $3.90/kg nut in shell.
"We will honour our fixed price right through this season so our growers will be paid in full for the nut they've sent to us this year," he said.
Meanwhile, consumers are paying about $36/kg in major supermarkets and Mr Lancaster-Smith believes that will not change until March.
Growers supplying Marquis will meet with the processor tonight.
