Cashing in on cashews: Africa must add value to its nuts

AFRICA grows most of the world’s raw cashews but only processes a fraction of them, missing out on a wealth of opportunity offered by booming global demand. The global market for cashews is booming, but the African countries growing more than half the world’s supply aren’t cashing in due to their lack of processing industries, according to a United Nations Conference on Trade and Development (UNCTAD) report.

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,” Shirotori said.

Cashews thrive in the tropical climates of 20 western and eastern African nations, where about 90 percent 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 percent of the continent’s nuts are deshelled on African soil. The rest is exported mainly to Asia, where 85 percent 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 percent of the world’s raw cashew imports between 2014 and 2018.

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

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-percent 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.”

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.