Although Africa accounts for over fifty percent (53%) of global cashew production, the continent accounts for only 10 percent of global processing. Through local processing, there is value addition potential of US$2.8 billion and potential employment of 275,000 people in processing plants.
It is for this reason that the involvement of middlemen in cashew trade in the country is quite disconcerting.
These ‘middlemen’ are involved in the direct purchase of raw cashew nuts (RCN) from farmers for export, posing a real threat to value addition in the sector. The situation is so dire that out of 14 cashew processing factories in the country, only four are operating, albeit significantly below their installed capacities.
This situation also denies the state much-needed revenues from processed cashew nuts export and a chance to realise true value from the industry.
Consequently, value chain actors and industry watchers are calling on the Tree Crop Development Authority (TCDA) and other relevant state agencies to expedite actions on the implementation of a regulation to ban foreigners from buying RCN from farmers directly.
Managing Director of African Cashew Alliance (ACA), Ernest Mintah, says TCDA must expedite action in getting the necessary legislations enforced to streamline cashew trade by preventing foreigners from buying RCN directly from farmers.
As demand grows, the market has become supply driven. Africa is the only continent that has the opportunity to supply this demand by increasing yields and investing in processing.
Processing is a highly profitable business with output prices responsive to input price changes. However, a mere 5-6 percent of the cashews produced in Africa are locally processed. Most of the raw cashew is exported to Vietnam and India for processing.
The problem of middlemen purchasing raw cashew nuts to be exported for processing has been a long time feature ever since cashew cultivation in the country took an upswing. However, with the establishment of a Tree Crops Authority to regulate the economic tree crop sector, we expect legislation to ensure a proportion of the raw cashew nuts produced is processed for added value in prices.
Since cashew forms one of the six tree crops given economic priority, we expect the Authority to fashion out means to curtail the wanton purchase of raw nuts leaving very little for processing and rendering our processing plants inactive and underutilised.
