Coronavirus: Local cashew industry suffers 50% price drop

The coronavirus pandemic has resulted in China significantly cutting imports of cashew nuts from Vietnam – one of the largest exporters – thereby, affecting the local industry, as players are no longer having buyers for their product, resulting in heavy price drop.

In January 2020, the international market price was around US$1,500 per tonne but it is now pegged around US$950, a 63 percent fall. Vietnam and India are the leading competitors on the cashew market. Vietnam largely caters to the global market while India’s cashew kernels are mostly consumed by its domestic market.

Ever since the coronavirus pandemic hit the world, trade between and among countries have somewhat ground to a halt, as many factories have closed and people are locked down in their homes, a situation that has compelled Vietnam to significantly cut down processing capacity which has affected the market prices of the product. This has become detrimental to Ghana and other West African countries like Cote d’Ivoire, Nigeria and Benin who have been exporting the chunk of their cashew to Vietnam.

Checks in Techiman and Nkoranza in the Bono East Region indicate that the price of 100kg bag of Raw Cashew Nuts (RCNs) has reduced from GH¢700 to between GH¢350 and GH¢400. In the Sampa area of the Bono Region, the same quantity was quoted at GH¢450 while farmers in the Savannah Region were offered GH¢400.

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Commenting on this, General Secretary of Cashew Buyers and Exporters Association of Ghana, Alhaji Justice Mahama Ansomah, said the situation is really affecting farmers and he hopes it does not continue for a long time.

“No actor benefits from this current slump in prices; let’s hope that the situation will soon normalise to breathe life back into the cashew business. Most of the investors are locked up in their hotels; they are hesitant to buy cashew. The few investors who have released funds to the buyers are those targeting the Indian market.  The Indian cashew market is relatively smaller than the troubled Vietnam market,” he said.

For the Secretary of Ghana National Cashew Farmers Association, Clement Anane, even though a fall in the price of cashew is not new to the industry, the coronavirus epidemic has exacerbated matters.

“The free fall price has been an annual ritual but the current situation is seriously taking a huge toll on farmers’ income. Many are struggling to breakeven after contracting loans to maintain their farmers,” he said.

Should the impact of the coronavirus continue to plunge the international cashew market, it is will significantly affect the country’s foreign exchange earnings from the commodity. In 2018, over US$378 million was realised from cashew export trade, representing 34 percent of the total revenue from non-traditional exports (NTEs). This makes cashew the leading non-traditional export commodity in the country.

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[…] leading agricultural export commodities after cocoa. Checks in Ghana’s cashew growing areas by the Business and Financial Times show the price at which farmers sell a 100kg bag of raw cashew nuts to processors has dropped by […]