Cashews: slump in exports more serious issue

Small gains in Cambodia

Cambodia exported 613,200 mt of raw cashew nuts worth USD 829 million to Vietnam between January and September 2023 according to the Cambodian Cashew Nut Association. This is 16.3% down in terms of value on last year. As Cambodia’s production ranged at 639,000 mt in the same period it can be stated that Vietnam effectively processes 96.0% of the country’s output. These figures show how difficult it is for Cambodia to reduce its dependency on Vietnam by processing raw cashew nuts itself and generating more income with value-added products.

Yet, a policy change aiming to turn Cambodia into a major producer and supplier of cashew kernels is showing some early but small signs of success. Not only does the decline in exports hardly come as a surprise as adverse weather conditions forced farmers to cut to down trees, which impacted production, but more and more local processors are also buying up raw cashew nut supplies in line with the national policy on cashew nuts adopted in early 2023. This is remarkable as these local enterprises only have a low working capital but are forced to compete with large exporters for supplies.

Mismatch between potential and reality

Nigeria’s cashew industry also largely depends on Vietnam as recently released export figures show. According to the Foreign Trade in Goods Statistics report issued by the National Bureau of Statistics (NBS) Nigeria exported cashews worth NGN 146.1 billion (USD 191 million) in January-June 2023. Although this figure clearly surpasses the NGN 116 billion (USD 152 million) generated in the same period in 2022, it should be noted that Vietnam accounts for 70% of Nigeria’s exports as the country shipped cashews worth or NGN 102.3 billion (USD 134 million) to Vietnam.

At the recent Tanzania International Cashew Conference held in Dar es Salaam several organisations and states emphasised how important collaboration within Africa as a continent is. Not only will close cooperation along the supply chain boost Africa’s position in the global market but the continental market also holds great potential. Although Africa accounted for 58% of global output in 2022 as ACA states, consumption is comparatively low. Tanzania highlights that Africa’s continental market comprises nearly 1.4 billion people and holds great potentials for cashews and its by-products. To boost consumption it is, however, necessary to lower domestic prices and to end certain malpractices such as unfair grading as local media report. Producers in Africa presently export more than 90% of the continent’s raw cashew nut production thereby fetching low prices.

Climate change drives worries

While the government in Tanzania is upbeat about achieving its aim of processing 60% of its raw cashew nut production and promoting domestic consumption, climate change is driving concerns in Cambodia. According to government targets Tanzania’s production will reach 400,000 mt in 2023/2024 and climb to 1 million mt in 2030. The country has the advantage that harvesting takes place from September to December, which is the off season on India, Vietnam and West Africa. The country’s climate and soil are also good for large varieties.

Climate change, by contrast, prompted yields to decline by 30-40% in Cambodia in the past four years. The area on which cashews are grown has decreased by about 100,000 ha in the last two years. While the area still comprised 800,000 ha in 2021, it now only covers around 700,000 ha.

Firm prices in India

Côte d’Ivoire is the world’s leading cashew producer with an estimated output of 1.25 million mt in 2023, followed by India and Cambodia of which both feature as estimated production of 650,000 mt according to figures released by the International Nut and Dried Fruit Council in May. Quotations for cashew nuts rose in India in mid-October but have remained firm since.

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