Cashew
Indian demand fuels African cashew trade
By Kate Thomas | Published: 28 July, 2010
West Africa is developing into an increasingly significant producer and processor of cashew nuts, feeding into lucrative markets in India
The cashew nut rarely figures high on most investors’ lists of West Africa’s principal exports. The nut is more closely associated with India, where it is processed and exported worldwide or ground into shahi korma sauces. However, India has built up such a significant cashew industry that in order to satisfy increasing demand, it now imports as much of the nut as it grows.
According to the Africa Cashew Alliance, which brings together industry players from 14 African countries, West Africa is stepping forward as a major player in the industry. The group says the region’s crop is of such high quality that it could overtake South-East Asia and South America as the world’s most important cashew producer. “Five years ago no one even knew that most of India’s exported cashew is African,” says Christian Dahm, manager of the Africa Cashew Alliance. “Now the entire trade is looking to Africa as the ultimate source for cashew.”
West Africa currently harvests about 650,000 tonnes of raw cashew kernels a year, which make up 30 percent of the world crop. 95 percent of that is exported to India, where kernels are baked and stripped of their shells – they contain anacardic acid, a potent skin irritant – before being sold locally and internationally. Keen to maximise the incomes of Africa’s cashew-producing nations, the Africa Cashew Alliance is working to boost processing capacity on West African soil. Its efforts are starting to bear fruit: the region is expected to increase its current processing rate of 5 percent to 10 percent in the coming years.
The benefits of developing a local processing industry in West Africa are evident; fairer prices for farmers selling to local processors, reduced unemployment, rural food security and more money in local pockets. Currently, more than 1.2m small-scale farmers grow cashew in West Africa. Countries with the best business environment and commitment of governments are likely to see the fastest increase in processing industries. They include Côte d’Ivoire – currently the fourth largest producer of cashew in the world – Nigeria and Senegal – which ranks tenth globally. Ghana’s reputation as a model of stability in the region is also enticing foreign processors to set up shop, despite the fact that the country produces a fairly small volume of raw nuts – less than 40,000 tonnes a year.
In neighbouring Togo, the country’s first processing plant opened in 2004. By 2009, Cajou Espoir had 200 employees and was processing 160 tonnes of nuts a year. “Demand is growing rapidly,” says director general Maurice Edorh. “We’re currently expanding the processing plant, investing heavily in increasing our capacity and providing jobs at the same time. In much of Africa, processing of cashew nuts remains an under-developed industry. In Togo, we’re hoping to change that.”
Similar initiatives are underway in Nigeria, which already has the title of West Africa’s largest processor, churning out 17,000 tonnes of processed cashew annually. That figure is expected to keep growing, despite the fact that some species of cashew tree were weakened by disease earlier this year. The Nigerian government also offers incentives for non-oil export products. “The country’s export grant incentive scheme is a good example of a way to secure stock for local processors without tampering with prices,” Mr Dahm says.
