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How dearth of processors is affecting cashew exports

The cashew industry is one of the most promising sub-sectors in agriculture. But Africa that grows most of the world’s raw cashews is missing out on a wealth of opportunities offered by the booming global demand. Analysts attribute this to low level of processing. DANIEL ESSIET reports.

THE global market for cashew is booming, according to United Nations Centre for Trade and Development (UNCTAD). The African Cashew Alliance (ACA) estimated raw cashew nuts (RCN) production in Africa to be at around 2.1 million metric tonnes, representing about 57 per cent of global production.

However, one major challenge facing the industry is low level of processing. Because of poor processing capacities, most raw cashew nuts are exported to Vietnam and India, the two countries which account for 98 per cent of the world’s raw cashew nut imports.

In Vietnam and India, the raw nut is deshelled and processed into cashews before re-exporting them to the United States, Europe, the Middle East, China and Australia, where they are, in turn, roasted, salted and packaged prior to consumption.

According to UNCTAD’s report, published April last year, the product has the potential for increased income and could reduce poverty for Africa’s three million small cashew producers. According to UNCTAD, the problem lies in the lack of local processing industries. Cashew nuts grow in Côte d’Ivoire, Tanzania, Nigeria, Benin, Burkina Faso, Guinea-Bissau, Mozambique and Ghana.

For this reason, the governments of these key cashew producing countries are rolling out strategies to increase the production and processing of the nuts.

An example is Cote d’Ivoire, the largest exporter of raw cashew nuts in the world. The government imposed an export tax of CFA franc 30 per kg of raw cashew nuts to raise revenue to support processors. Analysts say the outcome has incentivised local processing, boosting production capacity to 70,000 metric tonnes yearly.

Also, the Ivoirien Government is committing more than $20 million to helping cashew processors struggling against competition from Asia and to boost the percentage of the crop that gets processed in the country.

The government hopes, in partnership with the private sector, to boost processing to 50 per cent of national production by 2025 or 2026, which would allow Cote d’Ivoire to compete with Vietnam, according to analysts.

Though there are no reliable figures to show Nigeria’s yearly capacity for cashews processing, cashew remains an integral part of industrial and export crops, supporting over 300,000 families and sustaining 600,000 jobs.

Analysts said cashew industry earns about N150 million, and raw cashew exports provide $182.5 million.

If the raw cashew nuts were to be processed locally, the Managing Director, Vertex Agro Limited, Daniel Gemana, noted, Nigeria could generate more revenue, create more employment opportunities – and benefit more in related activities, including value addition. He set up a cashew nut processing plant in Gauraka,Tafa Local Government Area of Niger State for processing and exporting cashew and sesame seeds to markets in Brazil and Dubai.

He explained that there were some challenges that hinder local processing of cashew nuts. Key among them is a lack of capital to acquire machines and the inability of local processors to access raw cashew nuts from farmers.

Gemana stressed the need for the government to put in place an enabling environment to support increasing investment in domestic processing of cashews.

According to him, if the government is to make true its promise of locally processing the cashews produced in the country, it will, ultimately, benefit the economy. He said it would snowball into significant employment not only through the processing, but also in the extraction of by-products from the raw nuts, to be used in the production of chocolates, jams and other delicacies, as well as fertiliser from the same raw material.

At the moment, what the stakeholders are clamouring for is protection against Asian competitors who visit the farms to buy cashew nuts during harvest. The other prayers were for the government to facilitate the granting of loans for use on cashew processing plants and supplies of water and power as a matter of urgency.

He explained that a lot of them were processing cashews below the installed capacity because supplies of power to the industries were epileptic.

He stressed that the government needs to provide support to promote the cashew industry.

According to him, investors would be lured to set processing factories if there were incentives provided by the governments.

So far, he noted, multinationals are coming into cashew processing. Already, Olam Agro has established a cashew nut processing and exporting company in Tanzania, Mozambique, Cote d’Ivoire and Nigeria. Similarly, construction giant, Julius Berger, has launched into cashew processing. It has a state-of-the-art cashew processing plant in Epe, Lagos.

With big players coming into the industry, Gemana told The Nation they had put in motion a plan to establish a cashew processors association to enable those of them into processing to get the government’s ears to address encumbrances hampering the growth of the industry.

While processing remains a major challenge, the President, National Cashew Association of Nigeria (NCAN),Chief Ojo Ajanaku, said the association had been working hard to change this. The target is to process most of the industry ‘s output in the approaching years.

Apart from encouraging more Nigerians to get involved in cashew farming, Ajanaku noted that critical attention was being given to increasing the quantity of raw cashew nuts to enable processors get enough supplies.

According to him, raw cashew nuts production has become an important commercial activity for smallholder farmers; as such NCAN has made distribution of good seeds to farmers a priority.

For increased cashew productivity, he said improved varieties of cashew had been tested and trial production that will result in high productivity has begun by the association.

Ajanaku was optimistic on the seeds varieties, as they can fruit in two years. Generally, cashew like cocoa starts fruiting in three years.

To have enough cashew nuts for export, development partners are seeking to boost cultivation and processing.

One of those partners is the United States Department of Agriculture (USDA)’s Africa Cashew Project (PRO-Cashew) initiative designed to bolster the competitiveness of West African cashew producers by improving efficiency and quality across the sector.

Implemented by the Cultivating New Frontiers in Agriculture (CNFA), an international agricultural development organisation headquartered in Washington DC, it focuses on cashew producers in Benin, Burkina Faso, Côte d’Ivoire, Ghana and Nigeria.

Speaking with The Nation, the Country Director, USDA West Africa PRO-Cashew project, Olorunfemi Oloruntobi, said the organisation had carried out activities to increase farmers’ knowledge and skills in processing, finances, and marketing.

Having worked with so many farmers in the past, Oloruntobi said most of them lacked knowledge of best farming practices to increase crop quality and cashew nuts yield.

Recently, Oloruntobi said a training of trainers on cashew mother tree selection was organised by the organisation in collaboration with the Cocoa Research Institute of Nigeria (CRIN) and the Federal Ministry of Agriculture and Rural Development.

According to him, the objective was to select trees that would be used to establish a genetic base to bridge the gap between research and availability of improved cashew planting materials in Nigeria.

However, prior to the training, PRO-Cashew project had started distributing polyclonal seeds to cashew farmers.

His words: “This year, a major target would be the establishment of scion gardens across

major some cashew- producing states, and the distribution of over 200,000 grafted seedlings through nurseries. We want to demonstrate how the seedlings can be use through nurseries. We are hoping the narrative of recycling seeds to using hybrid planting materials. Grafting has been scientifically proven to be an effective method of maintaining quality traits in tree crops, and this has given grafted plants an edge over the use of seeds or recycled seedlings produced from recycled seeds.”

According to Oloruntobi, other benefits of the intervention include early fruiting, modest returns on investment, increase in cashew production, job opportunities, and availability of quality planting materials.

He noted that the cashew industry would need to restructure production and processing to ensure enough raw materials for sustainable development.

Tanzania’s experience

Tanzania lost Sh216 billion for exporting raw cashew nuts in the 2020/21season instead of kernel, according to a report by the Agricultural Non State Actors Forum (ANSA).

The study conducted between 2019 and 2021 showed that in the 2020/21 season, Tanzania exported 206,719 metric tonnes of the nuts that, if processed, could yield 51,680 tonnes of kernels.

Following the export, the country lost 63,058 jobs that could be created during the processing.

The findings of the ANSA report entitled: Economic opportunities in cashew processing and the costs of exporting RCN follows the 2013 outcomes that showed $110 million was lost on RCN exports.

According to the document, if Tanzania could process 50 per cent of the 206,719 tonnes, it would save Sh109 billion.

It added that in the 2020/21 season raw cashew nut was traded at a maximum price of Sh2,707 per kilogramme, while kernels attracted a minimum price of Sh15,000 per kilogramme.

The report continued: “The analysis has considered nuts as the main traded commodity with exclusion to by-products like shell liquid and apples.”

Despite the country’s 50 per cent processing capacity, the report observed that only 59,057 tonnes was processed of the 104,205 tonnes.

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