At present, the remarkably low prices for varieties and grades of high-quality raw cashews (that are normally exorbitantly priced) and instability on the global cashew market, have made presented an ideal situation for cashew retailers to take advantage of and maximize their profits. While it is obvious to most people that the main reason behind this instability in the global cashew market is the widespread nature of the COVID-19 pandemic, not many are aware of the real intricacies involved. Detailed below are all the specific factors behind the drastic drop in the price of raw cashews, especially varieties imported from West African nations such as Benin, Guinea Bissau, Ghana, Gambia, Senegal, etc.
West African Cashew Market Takes A Beating
During normal times, more than half of the West-African cashew harvest would be shipped to Asia. And, processing plants across the Asian continent (the vast majority of them located in India) would then have these raw cashew imports processed and shipped out to different parts of the global, by now. However, in the extraordinary times that we live in, things have not gone according to plan. The West-African cashew market is reeling from the pressure of measures to curtail the spread of COVID-19. Not only are raw cashew shipments pending export rotting in warehouses, but the harvest for the rest of the year's cashew harvest is also pending..
With international travel being shut down entirely during the months of March, April, and for the most of June, raw cashew shipments have been stored in warehouses waiting for travel to cashew importing countries such as India and China to be resumed again. Roadblocks in the cashew supply chain worldwide as well as a drastic dip in demand (especially in major cashew consuming nations such as India) have hit West African cashew producing nations badly, causing the market to tumble. Prices for cashews are only expected to even-out after restrictions in trade and travel are removed.
Many cashew farmers located across these West-African nations have even given up bothering about their cashew harvests, as they know their labor is most likely going to go waste.
Drastic Drop In Cashew Exports
According to the ACA (African Cashew Alliance), the continent's entire raw cashew export would witness a drop of up to thirty percent, which accounts to slightly more than one million tonnes. While this is to a great extent owing to the COVID-19 related factors discussed above (curfews, lockdowns, travel restrictions, etc), drought in many countries is also another significant reason contributing to the drop in cashew harvests in 2020.
Cashew Harvests Hindered By Virus Containment Measures
In many cashew-producing West African nations, measures such as extended curfews and lockdowns have hindered movement tremendously, making it impossible for laborers to reach the cashew farms that they work at. This had made it next to impossible for them to work on their cashew harvests (this period being the peak time for cashew harvests in West Africa). During cashew harvest season, time is of the essence, since any delays can lead to the nuts not being adequately dried. This in turn leads to quick rot and a considerable loss of the harvest.
In many countries such as Gambia, from which the major chunk of West Africa's cashew harvest is exported to foreign countries (including India), crucial cargo shipping airports have been completely shut down. Thus, tonnes of harvested cashews are lying idle in warehouses waiting to be exported and shipped out of the country.
While local governments have tried to make special arrangements to facilitate the shipment of these pending raw cashew exports, owing to the fact that their economies are dependant on these exports to a large extent, as well as, pressure from farmers and cashew exporters (who depend on the fulfillment of these exports for their livelihoods) urging the government to take necessary steps), the ball is yet to get rolling. This is understandable owing to the lethal nature of the COVID-19 virus, which has taken its toll on the African economy and continues to wreak havoc on the global economy as well. Many farmers in countries such as Guinea Bissau have even started distilling rum from their cashew harvests that are idly sitting in their warehouses (waiting to be transported and exported) to gain some usage out of them before they rot.
Souring US-Chine Trade Relationship
Although this doesn't necessarily concern only cashew trade, the import and export of dry fruits in general, the instability of the global cashew market has also partly been caused by the state of the trade relationship between two of the world's biggest superpowers - the United States and China. The political tensions between the two nations have been heating up for quite some time now, and over the last couple of years, these tensions have trickled into the economies of both these countries, with the US and China imposing numerous trade and economic sanctions against each other. One of these many economic sanctions had to do with the import and export of dry fruits between the two countries (the US being the largest exporter of almonds to China). China decided to impose heavy tariffs on these almond imports, leading to great instability in the dry fruits market. Owing to the fact that Chinese dry fruit retailers are no longer interested in purchasing American almonds, exporters in the US have no other option but to drop their prices for other nations including India. While this may be a good thing for retailers in India, this has had adverse effects on other dry fruit markets including cashews.
Why Is Now The Best Time For Cashew Retailers In India To Invest In Benin Cashews Right Now?
Detailed below are all the reasons why cashew retailers should seriously consider procuring the quantities of raw cashews from Benin that they require for their retail enterprises, right away, without delay.
Prices For Ghana Cashews Higher Than Same Time Last Year
Not all West-African cashew producing nations are doing badly, however. Prices for cashews from Ghana are way more than what they were this time last year (in 2019). Cashew exporters are also slated to meet their raw cashew export targets of about 150,000 tonnes after measures taken by the local government as well as importers from the United States (which is the largest importer of cashews from Ghana) to facilitate the quick transport of pending raw cashew shipments. While raw cashew shipments bound for India have also managed to make their way into their country, cashew retailers are apprehensive about going for these batches owing to their exorbitant prices. With the lack of sufficient labor to process these cashews and instability in the cashew market, retailers are naturally hesitant about going for these high-priced imports and are looking for cheaper alternatives instead.
Significant Drop In Price Of Benin Cashews (One Of The Most Highly-Sought-After Varieties On The Planet)
The COVID-19 pandemic has been very hard on cashew farmers in Benin. Benin is known for its diverse varieties of high-grade cashews (which are characterized by their tremendous flavor profile, their huge size, and nutritional value), which is what makes them so highly sought after across the globe. While only twenty percent of the country's cashew production goes towards regional cashew retailers, the remaining eighty percent is imported by countries such as India. Farmers in a desperate bid to export their cashew harvests as soon as possible to India have drastically dropped their prices in order to attract importers. This means that the price of raw Benin cashews are selling at one of the lowest rates in the past decade, making it possible for cashew retailers in India to take full advantage of this situation.
The Festive Season Is Only A Few Months Away
As explained above, the price of Benin raw cashews is currently more lucrative for Indian cashew retailers than raw cashews from any other West-African nation. This is, however, not the only incentive for greater profitability. What retailers should keep in mind is that the festive season in India is only a short while away. In a few months, the demand for cashews will go up tremendously, owing to festivals such as Diwali, Christmas, New Year, Pongal, etc.
The consumption of cashews doubles during the festive season, and drop significantly subsequently. The price of cashews per kg also drops by as much as 20% after festivals like Diwali, meaning cashew retailers have to stay prepared to off-load as much of their merchandise before Diwali as they can, in order to ensure maximum profitability. And, with prices for high-quality raw cashews from Benin being incredibly low at present, there's no better time to procure raw cashews than now, to try and increase these profit margins even more.
Prices Guaranteed To Skyrocket Post Pandemic
As a cashew retailer you might be thinking if the price of raw cashews from Benin is low, why not wait a bit longer to procure them, until the situation (with the COVID-19 gets even better, and things begin to stabilize). One should however keep in mind the fact that it has been nearly a month since the nation-wide lockdown was lifted. Only a few states (with higher concentrations of COVID-19 cases) have continued to impose lockdown restrictions in some cities and towns. International travel has resumed and with it trade (export and import) activities. This means that cashew exporters in countries such as Benin are guaranteed to lift their prices as they are sure that there will be no more holdups on their cashew shipments. With migrant laborers working in cashew farms across many of these West-African cashew producing nations set to return, the cost of labor will also be added to the price of the raw cashew exports, meaning cashew retailers in India will have to shell out more money for their cashew imports.
Reach Out To SCashews For Retail Grade Benin Raw Cashews
If you're eager to take full advantage of the present situation by procuring raw cashews from Benin for your cashew retail enterprise, then you should get in touch with us at SCashews right away!
