African cashew prospects:The quest for better quality and wealth creation
Africa currently produces more than one-third of the world's cashew (605,000 tons out of 1.6 million tons world wide in 2006) and exports an estimated 95% of raw nuts abroad.
Cote d'ivore, Guinea-Bissau and Tanzania rank 4th, 5th & 6th respectfully on the league of biggest producers in the global market, urging out a country like Mozambique which was the then leading producer of cashew on the continent in the 1970s.
But despite the apparent good standing of the continent's exports, majority of the farmers continue to struggle to make the needed economic impact, forcing them to either fold up completely or shift their attention to the cultivation of new set of crops.
From a low level of local consumption to the absence of credit facility from the banks and other donor agencies, farmers continue to struggle to stay in business despite the odds.
A case in hand is Guinea-Bissau where a lack of financing for raw material purchases and lack of buyers of kernels are some of the problems facing the industry. Besides, there is no national export brand and no credible quality certification, which means the country's kernels lack recognition in the international market.
Surprisingly, this problem is equally prevalent in most of the cashew growing countries like Ghana, Senegal and even Cote d'Ivoire which is seen as one of the big-shots in the industry.
The industry recently formed a continental cashew association to promote a campaign to add value to its nuts, encourage higher production and better quality, and market Africa as a source of quality organic cashews. The African Cashew Alliance is a private-public-partnership that aims at promoting the African cashew sector from production to consumption.
It also serves as a platform that brings together cashew stakeholders to share common vision and capitalise on the sector's potential for economic growth and employment.
The African cashew industry employs three million households, but is dogged by depressed prices and dwindling production.
The West African Trade Hub (WATH) an agency that is helping to revamp the cashew industry in Africa says for many years African raw cashews have been exported to India and Vietnam where they are processed and the majority is shipped to Europe and to the USA for consumption.
According to the agency, East Africa alone processes more than 20% of its domestic production. West Africa is increasing the number of its processing plants and will expand its current processing capacity of 3% to higher levels in the coming years.
But industry officials say whereas world cashew production has increased, Africa's share has decreased over the years. The continent's current output of 300,000 tonnes is less than half its potential of 700,000 tonnes.
The Alliance therefore hopes to address this very situation by liaising with local associations in the 14 member countries, by linking actors of the industry across countries to share information and create a common vision and synergies.
Again, the association equally hopes to prioritise and stimulate interventions to increase competitiveness, as well as facilitate fund raising efforts for cashew industry development initiatives and projects in the sector.
At its recently held meeting in Guinea Bissau, delegates discussed the pertinent issue of appropriate forms of drying the nuts in order to make them attractive to the international markets.
“Exporters and international buyers are stressing proper drying, the need to let the cashews mature before harvesting, and the need to package raw nuts in jute bags instead of the poly-plastic bags,” participants stressed.
According to officials of TechnoServe, an agency that advocates a better pricing for cashew farmers in Mozambique, cashew processing in Africa could generate annual revenues as high as $500 million by 2015, of which 40 per cent would go to wages for manual labour.
The primary target markets for Africa, which produces a third of the world's cashews, are the European Union and Asia. The Executive Director of the Agency Jake Walter said "African processors need to be competitive in four areas: broken nut yields, production costs, working capital rates, quality and reputation."
He added that "processors must also have access to quality nuts to assure long-term industry viability."
Statistics from every one of Africa's big producers paint a bleak picture as far as processing is concerned. Guinea-Bissau, the second biggest producer in Africa and the fifth in the world, produces 90,000 tons, according to Fernando Flamengo, a cashew nut processor.
Mr. Flamengo says almost all the production is exported for processing in India. He notes that, directly or indirectly, almost 80 per cent of the country's population is connected to the cashew industry.
The Ghanaian industry is dogged by low inputs, low yields and poor prices for raw nuts. Orleans Chinery, the cashew project manager for TechnoServe Ghana, says virtually all nuts are exported raw. He adds, however, that a large increase in processing over the next five years is expected to occur with the establishment of five new processing plants.
Meanwhile, Ivory Coast has one struggling processing facility and virtually all its produce is exported in raw form to India, accounting for 22 per cent of all India's cashew nut imports. The country, whose production in 2003 was 64,000 tonnes, has 20 export companies, and 1.5 million people involved in cashews.
TechnoServe, which is operational in most of Africa's major cashew growing nations, says the lack of viable processing industries means that African countries are forgoing tremendous value-added gains. It says the price for cashew kernels has of late averaged $4,500 per tonne, compared with $500-$700 per tonne for raw cashew nuts.
Source: Nii Kwaku Osabutey ANNY with files from New Agriculturist