But mainland cashew cultivators and exporters receive only a fraction of the final retail price, according to the report. Countries that produce cashews but don't process them on a large scale tend to only retain a miniscule portion of the value created when the cashews move from farm to store. African cashew farmers, exporters and workers are missing out on a multitude of opportunities because of not being able to export their own processed cashews
The Opportunities Being Lost
Cashew plants thrive in the tropical climates of twenty countries in West and East Africa, where around ninety percent of the raw cashews traded in the world market are grown. After Côte d'Ivoire, the primary producers are Benin, Tanzania, Ghana , Nigeria , Mozambique , and Guinea-Bissau .
However, less than fifteen percent of the continent's nuts are shelled on African soil. The remaining cashew nuts are exported primarily to Asia, where as much as eighty five percent of the world's cashews are shelled, adding value to the commodity. Between 2014 and 2018, just two Asian nations, India and Vietnam, accounted for roughly ninety eight percent of raw cashew imports globally. Value to the cashews is added even more in Europe and North America, where about sixty percent of marketed kernels are roasted, salted, packaged and eaten as a snack or as an ingredient in a cereal/energy bar, health drink, or other snack.
The Price That Africa Is Paying Because Of Its Limited Cashew Processing Capabilities
While it's not easy to estimate exactly how much Africans are losing out on because of their lack of processing facilities and capacities, the report does offer indicative calculations. The export price of cashews from India to the European Union, in 2018, for instance, was about three and a half times what was paid to cashew producers in Côte d'Ivoire, a price difference of two hundred and fifty percent. And after undergoing another stage of processing in the European Union, the price of these cashews was around two and a half times higher than when they were exported from India, and around eight and a half times higher than when they left the plantation in Côte d'Ivoire. This is a clear indication of the value addition that can take place in African cashew producing nations, fourteen of which are classified as 'underdeveloped'. Adding more value to these cashew nuts that are exported can in turn lead to better wages for workers and more money being pumped into the local economy.
The Cashew Economy Could Help Further Reduce Poverty
The report highlights the potential of cashews to contribute to the United Nations Sustainable Development Goals, in particular the one on poverty reduction. Since production usually takes place on small farms in rural areas, there is a direct link between added value in the cashew sector and poverty reduction, taking into account the fact that cashews are a source of income for around three million small time farmers in Africa. Despite the fact that the untapped poverty reduction potential of cashew nut cultivation, processing and export is greatest in Africa, it is also valid for other countries where cashews are grown in the Carribean, Asia, and Latin America.
The report points out that the forty six “large-scale” cashew producing countries are developing economies, of which eighteen are classified as “least developed countries” (LDCs). Africa is not at the center of the report, but given that the continent produces more than half of the world's supply and home to fourteen of the cashew producing LDCs, Africa ranks high in the analysis. A dozen of the other nut-producing countries are Asian (four are LDCs) - accounting for forty three percent of global production, and fourteen are in the Latin America and Caribbean region, which produces five percent of global supply.
Opportunities Galore For African Cashew Producers
A series of market trends mentioned in the report are opening up opportunities for African processors. These include the growing taste of global consumers for healthier snacks and their increased preference for more environmentally friendly and ethically sourced food products.
“Traceability, transparence, and sustainability of food supply chains are becoming increasingly important to consumers and suppliers, and this could benefit African processors, who source locally rather than through long supply chains. African processors who can meet increasingly stringent quality and food safety standards in global markets could benefit from the burgeoning demand for organic products, which in the EU grew, for instance, by a hundred and twenty one percent between 2009 and 2019.”
The Need For Improved Policymaking
Although the backbone of the African cashew economy must be a stable supply of high-grade raw cashew nuts, processors also need a policy environment that allows them to operate with competitive processing costs and offers easy, unrestricted access to the primary export markets. Policies aimed at aiding the cashew sector in African countries must therefore take into account the complete cashew value chain - production, processing and trade. This would therefore entail -
● ensuring that farmers have access to quality seedlings, technological know-how and market information
● increasing training of farmers on entrepreneurship and farm management, including harvest and post-harvest practices;
● supporting public research that helps identify agricultural practices and technologies that work best under local environmental and economic conditions;
● enhancing rural infrastructure including highways and secondary roads, to better link cashew farms and processing sites;
● facilitating market entry through the development of technical skills and better access to market information;
● assisting the capacity building of cashew processors to meet quality standards in potential foreign markets;
● promoting the production of cashew nut by-products, such as cashew apple drinks, which are normally thrown away as waste;
● fostering cooperation between cashew producing regions to improve market stability, limit bottlenecks and reduce incentives for cross-border smuggling.
“Such political action and support would ultimately strengthen the productive capacities of African countries - the productive resources, entrepreneurial capacities and production linkages that determine an economy's ability to produce and add value to goods. and services.”
