With additional than 3 million circumstances across the world as of April 29, 2020, the effects of Covid-19 has been much-reaching. Governments all around the planet are in a placement in no way seasoned ahead of, as every endeavor to explore the best procedures with which to tackle the pandemic. A number of governments have had to problem guidance offers to enterprises and citizens.
International organizations are one of the most difficult strike by the distribute of the coronavirus. For the cashew sector, the circumstance is no distinctive as sector actors encounter diverse worries. China, United states and European countries, which are the key cashew kernel marketplaces, have shut their borders to travels to control the unfold of the deadly virus, slowing down trade.
As a result, cashew processing giants like Vietnam and India which are the main exporters of kernels to these countries have dramatically decreased their processing volumes. Preventive steps these as social distancing and operate shifts to reduce the amount of employees at a time have resulted in lessened volumes and closure of some factories.
Due to the fact most of Vietnam and India-processed cashews are sourced from African nations around the world, there has been falling need for Raw Cashew nuts (RCN), and therefore, a fall in RCN rates.
Contemplating the gradual down in trade routines, it can be assumed that there would be a sizeable reduction in the procurement of RCN from Ghana and neighbouring producing countries.
In Ghana, the implementation of preventive steps from the effects of COVID-19, this sort of as the closure of all borders to entry, a ban on social gatherings, lockdowns in high-threat towns, and the introduction of function shifts for critical solutions have brought a unexpected halt to intercontinental cashew trading.
Since there is presently much more RCN offer than demand, the cost of RCN is dwindling. It has been reported that RCN charges have dropped by up to 50% from about ¢700 per bag to concerning ¢350 and ¢450 across the country’s making parts.
Response of neighborhood processors to COVID-19
In accordance to the Affiliation of Cashew Processors Ghana (ACPG), three of the regional factories are even now engaged in processing functions, one particular has paused processing for equipment servicing for a 7 days and two are yet to start off 2020 output. Processors who source the regional customer sector have not viewed a significant fall in community desire for cashew nor profits by distributors on the neighborhood sector.
Processors in Ghana generally observe rigid foods protection protocols that involve normal washing of fingers with soap less than running h2o as effectively as the use of hand sanitizers. In response to the risk of COVID-19, employees carry on to observe these protocols, with factory owners raising the offer of sanitizers and h2o for regular hand washing.
Those people in the packaging device sanitize their feet as properly to stop the distribute of the virus.
Factories are also applying social distancing by proscribing employees present at a offered time to 25. A person roasting unit, which provides nuts to the neighborhood market, has a highest of 10 folks at write-up at a time. A person of the premier processing units in the nation has shut for two weeks to defend their personnel and community.
Local processors count greatly on foreign trade, and though some processors are continue to ready to export at the minute, this is hunting much less attainable in the around potential, should really the unfold of COVID-19 persist.
Industry implications and potential customers
Steps adopted to avert the distribute of COVID-19 have pressured producers to market to the domestic market place only. Specified that RCN is priced dependent on high-quality, which diminishes the for a longer period it is stored, it could not be prudent for producers to hoard inventory in anticipation of much better rates when the pandemic blows around. They are obliged to offer at existing minimal charges.
But do local processors have enough capacity to soak up the surplus? Will the fall in price ranges give neighborhood processors a much better chance to receive RCN for production? It is doable that we witness a related pattern as in 2018 when RCN costs had been at an all-time minimal, yet local processors have been unable to just take benefit of the circumstance thanks to inadequate capital.
With the likelihood of impacts persisting prolonged immediately after COVID-19 has handed owing to a doable world recession, will these developments culminate in a reduction of farmers’ desire in cashew generation in Ghana?
When questions persist, this year of unknowns offers an option for Ghana’s cashew actors to uncover new prospects for the cashew value chain.
On the worldwide demand from customers side, around the world usage of cashew is steady, with a tendency towards raising. The current secure demand from customers is mostly due to a mixture of increased demand from customers from the US and European customers, and a decrease in demand from the Center East. Having said that, this diminished desire from the Center East is because of to provide chain disconnections as a final result of COVID-19.
The improved demand from customers from US and European individuals (who represent the world’s optimum consumption) could be explained as a opportunity silver lining of recent gatherings. With overall health as a significant aim simply because of COVID-19, consumers’ demand for healthful nuts like cashew is climbing. How can the African cashew sector just take benefit of the offered alternatives?
Prioritising and investing in a sturdy neighborhood processing marketplace could shorten the provide chain to final customers of cashews because an Africa-Europe or Africa- US transport route is shorter than Africa-Asia- Europe/ United states.
In 2018, the cashew sector raked in about ¢378m as a Non-Traditional Export crop for Ghana. The sector is projected to be a important earner in the agriculture sector for the region. Cashew has the potential to gain even much more income for the nation if given dependable strategic attention by the govt and important stakeholders.
Benefit addition of kernels provides in at least 3 moments additional export earnings than exported uncooked cashew nuts. Outside of the nut, neighborhood raw cashew nut (RCN) processing also gives more income streams by way of by-products these kinds of as the Cashew Nut Shell Liquid (CNSL) and fuel from cashew nut shells. CNSL is utilized thoroughly in the petroleum and paint generation industries and the manufacturing of pesticides. Residual shells are also utilized as gasoline for powering significant industrial devices. The cashew apple can be processed into fruit juice, wine, ethanol for industrial use, jam and other food merchandise.
Ghana has the option to acquire gain of the prospects working with the Ghana Tree Crops Authority – which was passed into an Act in December 2019 and is planned to be operationalized this year – as a software, in collaboration with other sector actors. Dependable strategic interventions can be developed and carried out to construct a wholistic worth chain, resilient as a great deal as possible to one more worldwide shock to the ranges of this present COVID-19 pandemic.