The Ghana Commodity Exchange (GCX) will in the next cashew crop season undertake a reserve auction of a minimum 20,000 metric tonnes (MT) of raw cashew nuts, following successful auction session of 1,000MT last week, Mr. Robert Dowuona Owoo – the Chief Operations Officer, has revealed.
This will be the largest-yet reserve auction trade to be undertaken for cashew contracts on the Exchange. In the previous sessions, the Exchange successfully conducted 50MT and 1,000MT of raw cashew nut in a reserve auction.
The Chief Operations Officer said in an interview with B&FT that the Exchange is prepared to undertake the ambitious auction trade, given that it has been able to undertake a 1,000MT auction in the lean cashew crop season.
“In the next season for cashew, we are going to do 20,000 MT – because if in a lean season we have been able to do 1,000 MT, I don’t see why during the main season here in Ghana we can’t do 20,000MT,” the COO said.
He added: “As an Exchange, the projected auction – which is about 20 percent of the total production in Ghana – is something we think is very possible looking at the interest being shown by market participants, the Exchange and its efforts to have a structured trading system for raw cashew”.
With the growth of cashew production in the Bono, Bono East, and Ahafo Regions, cashew production in Ghana has recently been geared toward generating revenue through exports. Thus, the introduction of cashew onto the electronic trading platform of GCX will undeniably reap many benefits for Ghana’s cashew value chain, as well as market actors involved in Ghana’s cashew sector.
The Exchange, as an alternative and more structured market for trade, offers an open and accessible price discovery system that reduces the difficulty farmers, processors and traders of cashew face when it comes to determining the price of cashew.
Regarding export of cashew nuts from Ghana, the Ghana Export Promotion Authority (GEPA) has identified potential growth. With an estimated untapped potential of over US$600million for Ghana’s cashew in-shell, Ghana exported close to US$400,000 of raw cashew in the shell to six countries during 2019 – with Vietnam emerging as the main destination of the product from Ghana.
Although the total import value of the product into Vietnam and India recorded US$1.7million and US$933,000, Ghana’s share in these two countries for the year under review recorded 15.2% and 14% respectively.
However, countries in the sub-region – namely Benin and Ivory Coast – recorded significantly more shares than Ghana.
Mr. Francis Kwame Peprah, Chief Operating Officer of KAKSFOUR – the seller, said to be able to aggregate the 1,000MT, they had to rely on neighboring countries in order to get the commodity into the country.
“We had to extend our frontiers to Ivory Coast and Burkina Faso, and as far as Guinea. It will get to a time when all these foreigners who come to Ghana to buy will be routed through the Exchange,” he said.