How smuggling is threatening local macadamia value chain

Illegal export of unprocessed nuts through porous borders with Tanzania and Uganda remains the weakest link in the growth of Kenya’s macadamia value chain.

The annual harvesting ban on macadamia nuts takes effect from December 1 to mid-February to curb the picking and sale of immature produce. Yesterday, however, the Agriculture and Food Authority (AFA) said that despite the regulations, illegal export of the nuts continues due to inadequate border surveillance.

These measures are intended to curb unlicensed trading and reduce the harvesting of immature nuts through inspections at farms, aggregation centres and processing plants.

AFA maintains a strict ban on the export of in-shell macadamias and requires all exporters and dealers to be licensed. Every consignment must pass through designated customs points and be declared via the KenTrade Single Window System. 

However, enforcement gaps persist, particularly at remote or poorly monitored borders. “Limited enforcement capacity and the difficulty of monitoring multiple entry points mean that some illegal activity persists. AFA itself has intercepted several consignments, signalling progress but also highlighting gaps in full value-chain compliance,” said AFA Director-General Dr Bruno Linyiru.

“Continued investment in monitoring, inspections and farmer education is essential to eliminate illegal exports and safeguard the value of Kenya’s macadamia industry,” he added.

Earlier this year, Agriculture Cabinet Secretary Mutahi Kagwe reaffirmed that the ban on raw macadamia exports will remain in place, arguing that lifting it would jeopardise more than 200,000 jobs supported by local value addition and undermine the government’s industrialisation agenda.

The Macadamia Nut Association of Kenya (Macnut) says the sector has improved due to structured harvesting schedules. Previously, brokers encouraged farmers to shake trees prematurely to collect immature nuts, undermining quality and prices. “Now, with scheduled harvesting and stronger farmer groups, that pressure has eased,” said chair Jane Maigua.

Despite these gains, farmers near the Uganda and Tanzania borders remain vulnerable due to rugged terrain, scattered settlements and limited state presence.

“These conditions create ideal channels for traders looking to circumvent Kenya’s strict regulatory regime,” Linyiru noted, adding that harmonised regional policies are necessary to curb cross-border smuggling.

Even so, Kenya’s macadamia output rose from 44,364 metric tonnes in 2023 to about 49,183 metric tonnes in 2024. The increase is attributed to better yields, improved harvesting practices and expanding acreage. Production, once concentrated in Meru, Embu, Kirinyaga, Murang’a and Nyeri, has now spread to Bungoma, Kakamega, Trans Nzoia, Elgeyo Marakwet and Uasin Gishu.

Farm-gate prices rose sharply from Sh58 per kilogramme in 2023 to Sh98 in 2024. The upward trend has continued into 2025, with prices currently between Sh130 and Sh160 per kilogramme. The resurgence is linked to stronger regulations, better crop quality and recovering global demand for macadamia kernels.

However, structural inefficiencies continue to diminish farmer earnings. The value chain is dominated by middlemen who buy nuts from farmers and resell them to processors or illegal exporters.

Brokers often set prices among themselves, so farmers earn the same whether nuts are exported raw or processed locally, with brokers retaining any extra margin offered for in-shell nuts.

Quality also remains a challenge.

International buyers benchmark suppliers using sound kernel recovery (SKR). Kenya’s SKR averages about 15 per cent, compared with South Africa’s 35 per cent and Australia’s 34 to 36 per cent.

Higher SKR means more saleable kernel per tonne. Linyiru stressed the need for better agronomic practices, proper harvesting and improved post-harvest handling to raise Kenya’s SKR.

The country also struggles with underutilised processing capacity. Despite an installed capacity of about 120,000 metric tonnes annually, production stands at roughly 49,000 tonnes, leaving more than 70,000 tonnes idle, an inefficiency worsened by illegal raw-nut exports.

AFA envisions a high-quality, value-driven macadamia industry within the next decade, saying stronger local processing will be key to job creation and higher foreign exchange earnings.