Cashew has above the previous six decades, designed from staying developed to struggle erosion and desertification into a incredibly crucial financial and, in some conditions, political commodity in Africa.
Due to its rich dietary content and the lots of wellness positive aspects of consuming both equally the cashew apple and nuts, such as its capability to fight Variety II diabetes and also made up of five situations the vitamin C written content of oranges, cashew is consumed all more than the globe, primarily in Europe and The usa.
Produced in most tropical regions throughout the world, which includes in Brazil, India, Vietnam, and Indonesia, cashew is today contributing significantly to the financial advancement of the in excess of 14 cashew generating international locations in Africa, participating in a large part in poverty reduction in these international locations.
The Cashew marketplace, according to the African Cashew Alliance (ACA), serves as a source of work to 2.5 million Africans, serving as the major resource of profits for about 1.8 million households in West Africa.
As the world’s finest producer of raw cashew nuts (RCNs), generating extra than 2 million tons and exporting more than 85% of production, Africa rewards from cashew in the form of international exchange and revenue era.
As a matter of truth, cashew has come to be the highest non-standard export earner in African cashew producing international locations like Ghana.
Regrettably, regardless of the constant growth in cashew production, regional processing stays pretty small in Africa with less than 15% of production processed domestically.
A vast greater part of RCN produced in Africa are exported to Vietnam and other Asian nations for processing. This has turn out to be a obstacle and is proscribing the growth of the cashew business in Africa.
With these points in intellect, this post examines the African cashew marketplace in 2020 in the midst of a novel pandemic and appears into 2021, the strengths, weaknesses and possibilities.
2020 in retrospection: Winners and Losers
2019 ended with Africa creating a file 2million and 67thousand, 710 tons of raw cashew nuts, over 47 thousand far more than the 2million and 20thousand, 610 tons made the 12 months in advance of.
The ACA experienced estimated an raise by above 83 thousand in 2020. Nearby processing nonetheless declined with only about 10% of output processed locally.
The ACA, alongside one another with other stakeholders, experienced held numerous studying fora aimed at encouraging local processing to improve the competitiveness of the field in Africa.
An important case in point of these fora was the Obtain to Finance Discussion board which the ACA organised in collaboration with Tecnoseme Benin, GIZ/ComCashew and Solidaridad and was held in Ghana and Benin to introduce stakeholders from the cashew and the oil palm benefit chains, specifically processors, to accessible funding prospects which will enable stakeholders to improve their enterprises and processing capacity.
Also, by conclude of 2019 and early 2020, as the then President of the ACA, Florentino Nasnque, indicated in his close of calendar year information, “more nations [had] signed on to the Consultative Worldwide Cashew Council (CICC)”, the international group recognized on 18th November 2016 with lawful powers and financial autonomy to market and control the generation, processing and trading of cashew in Africa.
This, as he rightly claimed, intended governments were being commencing to recognise the great importance of the cashew market and were “open to dialogue to a favourable policy” and to “create consultative frameworks” to a sustainable and viable cashew field on the continent.
With all these good measures in location in 2019, the cashew sector was envisioned to see major growth in 2020, specially with area processing.
In fact, as a Market Facts Programs (MIS) specialist, Jim Fitzpatrick, assessed, 2020 started on a extra positive observe, with strong demand from customers all through the globe except in India.
Farmers had nearly completed providing RCNs stocked from the 2019 time and were about harvesting for the new period when the surprising occurred: the outbreak of the novel coronavirus condition 2019 (COVID 19).
As indicated in the article, Covid and Agric: Strengthening Africa’s cashew sector the job of governments (study from ACA site), as of February 2020 when Africa began recording cases of Covid 19, the cashew time experienced not attained its peak.
At the time, most farmers were being both planning to harvest or experienced harvested and were waiting to offer.
The closure of boarders and restriction of movements intended all those who harvested could not provide for the reason that there were being no prospective buyers and these who had been still to harvest were discouraged by the tumble in costs.
The favourable factor was that, although farmers’ revenue were being afflicted, Africa’s generation was normally not hugely affected as initially feared. Africa’s 2020 production exceeded the 2.1 million it generated in 2019.
Maybe, the most crucial and important component that saved the situation at the time when the pandemic was at its peak and farmers turning into frustrated of the drop in rates and the absence of purchasers was the incredible growth of processing in Vietnam.
Vietnam improved its monthly RCN processing and exports of cashew kernel by 78% ,38% and 18% in February, March and April, respectively as opposed to exact same durations in 2019. Processing remained robust through the 12 months.
The improve in processing intended that demand and import of uncooked cashew, specifically from Africa increased substantially.
Virtually 70% of Cote d’ Ivoire’s RCNs were acquired and exported to Vietnam. This introduced wonderful relief to farmers and prevented an estimated 200,000 to 300,000 tons of RCNs from going waste on farmers’ fields, houses and in poor storage services as was initially feared by the ACA.
It is also important to mention that demand and intake of cashew kernel remained strong in the course of the yr.
In fact, documents from the ACA suggests that need elevated. In the United States, the greatest import market place for cashew in the planet, 2020 ended with an incredible cashew import growth of 8%, the optimum in ten many years.
Need, imports, and usage of cashew in Europe also grew by 17%. In simple fact, in accordance to Jim, the European cashew sector was developing all over 30-32 p.c at a point in 2020. We will be analyzing, in a subsequent posting, why this transpired and why price ranges crushed even when need was large.
For now, the level well worth noting is that the pandemic did not have an effect on demand from customers and use of cashew in 2020.
And the increase in processing in Vietnam prevented an excessive need more than offer problem.
Whilst Vietnam’s processing sector was far more or considerably less the “saviour” of the worldwide raw cashew nut sector for the duration of a fatal pandemic by rising its processing charge to meet up with growing need, the processing sector in Africa was hit really hard by the problem in 2020.
With accessibility to dependable funding becoming a challenge for cashew processors in Africa, creating just about all the more than 50 cashew processing factories remaining underutilised, the pandemic even further compounded this scenario.
Area Processors experienced to expend out of funds to invest in own protective tools to be certain the safety of staff.
They expended added unbudgeted funds on transporting employees to and fro get the job done to retain them risk-free.
Also, the social distancing protocols intended these currently underutilised factories experienced to set particular measures in spot, including laying off some workers, to be certain basic safety and reduce their economic load.
With these additional financial expenses, President of the Association of Cashew Processors Ghana (ACPG), Marvin Nii Smith, thought this designed it difficult for area processors to acquire advantage of the tumble in prices of RCN to improve processing.
In actuality, at a level in the year, according to the ACA, almost 70% of these factories had shut down. 2020 was simply a tricky calendar year for processors in Africa.
To sum up the cashew business in 2020, Jim Fitzpatrick believes though prospective buyers and Vietnamese processors were winners in the year, producers and processors, especially people in Africa had been losers.
He details out that the pandemic has also highlighted the weaknesses and risk in the international cashew benefit chain, specifically an imperfect benefit chain, where RCNs are developed in Africa, delivered to Asia for processing and then to Europe and The us for market, that needs to be enhanced.
Taking care of Director of the ACA, Ernest Mintah, thinks 2020 also uncovered the reality that, Africa was ill geared up, in terms of storage facilities to inventory RCNs and in phrases of policies that enable governments to set in to control rates and save the sector in situations like Covid.
He explained the 12 months finished with most nearby processing factories acquiring inadequate funds to get raw components and to allow them to acquire the required materials to enable them to adhere to Covid protocols.
Projecting into 2021 (Based mostly on ACA Projections)
Even with the devastating affect Covid 19 is getting on all factors of livelihood and the substantial impacts it is acquiring on several sectors of earth economies, in particular in acquiring international locations, the African Cashew Alliance (ACA) is optimistic that the cashew field will continue being strong, and much less affected, in 2021.
They be expecting demand and intake to remain solid in 2021 and an enhance in output.
With Creation, the ACA initiatives Africa to strengthen its grip on cashew generation by remaining the world’s greatest cashew making continent.
They undertaking the continent to deliver 54% of the 3.8 million tons projected international generation of raw cashew, and hence exceed the over 2.1 million it generated in 2020.
India, Vietnam and Cambodia and Brazil are projected to deliver 21%, 17% and 4% of international production, respectively.
Productions in Nigeria and Ghana are expected to be concerning 210,000 – 250,000 tons and 110,000 – 130,000 tons respectively, almost the exact concentrations as last 12 months.
The ACA provides, having said that, that in Nigeria, creation may raise or lessen depending on farmgate costs.
They also foresee that the new regulatory constructions in Ghana, the Tree Crops Advancement Authority (TCDA) which now regulates cashew and five other tree crops, and the Cashew Council Ghana (CCG), a mom affiliation of the many cashew value chain associations, will final result in an increase in generation in Ghana in the coming yrs.
Production in East Africa is, nonetheless, projected to be lessen than predicted specially in the two foremost cashew creating nations around the world in the subregion, Tanzania and Mozambique, as a outcome of adjustments in weather, the cyclone and the impression of protection unexpected emergency in the subregion.
Output in Tanzania could drop to as small as 225,000 tons by the finish of the yr, according to ACA projections.
With processing, the ACA expects more financial commitment into the cashew processing sector as an try to shorten the cashew provide chain by processing closer to origin.
This will enable regional processors to adopt enhanced and mechanised programs.
Neighborhood processing is thus envisioned to improve, especially in Cote d’ Ivoire, Nigeria and Benin.
Conclusion
In 2020, Vietnamese processors saved the world wide raw cashew nut sector, primarily in Africa. The tale could probably have been unique had Vietnam not greater its processing ability in 2020 and farmers, specifically people in Africa, would have suffered the most.
Now additional than at any time, Africa requirements to raise its processing capability.
There is the need for African governments to prioritise area processing of cashew.
This should to be done to bolster the sector and to secure the supply of earnings of more than 3 million men and women, primarily the around 2million farmers.
Local processors, on their part, need to start to feel of revolutionary means of rising their processing capacities and open up up for expense.
