Africa missing the cashew bus due to lack of processing industries – report

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Photo by Jenn Kosar on Unsplash

The global market for cashews is booming, but the African countries growing more than half the world’s supply aren’t cashing in, an UNCTAD report says, due to their lack of processing industries.

Between 2000 and 2018, world trade in raw cashew nuts more than doubled to 2.1 billion kilograms, and African producers – led by Côte d’Ivoire – accounted for almost two-thirds of the growth.

But the continent’s farmers and exporters get only a fraction of the final retail price, according to the report, Commodities at a Glance: Special issue on cashew nuts.

“Countries that grow cashews but don’t process them at a significant scale retain only a small share of the value created as the nut travels from the farm to store,” said Miho Shirotori, who leads UNCTAD’s work on trade negotiations and commercial diplomacy.

“African farmers, exporters and workers are missing out on a wealth of opportunities,” Ms. Shirotori said.

How Africans are missing out

Cashews thrive in the tropical climates of 20 western and eastern African nations, where about 90% of the raw cashew nuts traded in the global market are grown. Behind Côte d’Ivoire, the main producers are Tanzania, Nigeria, Benin, Guinea-Bissau, Mozambique and Ghana.

But less than 15% of the continent’s nuts are deshelled on African soil. The rest is exported mainly to Asia, where 85% of the world’s cashews are deshelled, which adds value to the commodity. Just two Asian nations – India and Viet Nam – accounted for about 98% of the world’s raw cashew imports between 2014 and 2018.

Raw cashew nut yields, selected countries

Even more value is added in Europe and North America, where 60% of traded kernels are roasted, salted, packaged and consumed as a snack or an ingredient in a drink, bar or other product.

The cost of limited processing

Although it’s challenging to calculate how much Africans are losing, the report provides indicative calculations.

In 2018, for example, the export price of cashew kernels from India to the European Union was about 3.5 times higher than what was paid to cashew farmers in Côte d’Ivoire – a 250% difference in price.

And after secondary processing in the EU, the price of the cashew kernels was about 2.5 times higher than when exported from India – and about 8.5 times more than when they left the farm in Côte d’Ivoire.

“This shows the potential for value creation in African cashew-growing countries, 14 of which are classified as ‘least developed’,” Ms. Shirotori said. “And value creation can lead to better wages for workers and more money for the local economy.”

Cashews can help reduce poverty

The report highlights the potential for cashews to contribute to the UN Sustainable Development Goals, particularly the one on poverty reduction.

“Since production typically takes place on smallholdings in rural areas, there is a direct link between value addition in the cashew sector and the achievement of poverty reduction,” the authors write, highlighting that cashews are a source of income for an estimated 3 million smallholder farmers in Africa.

Although cashews’ untapped poverty reduction potential is greatest in Africa, it’s also valid for the other nations where it’s grown in Asia and Latin America and the Caribbean.

The report highlights that all 46 countries producing cashew nuts “on a significant scale” are developing economies, 18 of which are classified as “least developed countries” (LDCs).

“Africa isn’t the focus of the report,” said Stefan Csordas, the report’s lead author. “But given that the continent produces more than half of global supply and is where 14 of the LDCs producing cashews are located, Africa features prominently in the analysis.”

A dozen of the other countries growing the nut are Asian (four are LDCs) – accounting for 43% of global production – and 14 are in the Latin American and the Caribbean region, which produces 5% of the world’s supply.

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