COTE D’IVOIRE – Côte d’Ivoire’s cashew nut industry is experiencing a significant raw material shortage, with processors seeking 60,000 tons to keep factories running smoothly in 2024 according to the Cotton and Cashew Council (CCA).
In a recent meeting, Côte d’Ivoire’s Ministry of Agriculture and industry stakeholders discussed the urgent need for raw cashew nuts.
With exports of raw cashew nuts officially banned since May 7, local processors are facing supply issues despite efforts to prioritize domestic processing.
“When the suspension measure was taken, the export companies had already purchased all the cashew nuts available. The problem is still there and has not been solved,” an industrialist told Reuters. This shortage jeopardizes the goal of processing 25% of the national cashew nut production, anticipated to reach 1.25 million tons in 2024.
Exporters are reportedly ready to supply 30,000 tons of cashews to local processors. However, there are concerns over the price disparities in different regions.
“The prices offered by exporters for a kilo of cashew nuts are 95 to 115 CFA francs [USD 0.15 to USD 0.18] more expensive than the market price in Korhogo and 80 to 100 CFA francs [USD 0.13 to USD 0.16] more expensive than the market price in Bouaké. Who will pay this additional cost demanded by exporters?” questioned another industrialist.
The price differences make it challenging for local processors to compete, raising questions about the sustainability of current policies and the ability to meet processing targets.
Meanwhile, Guinea-Bissau, another major cashew producer in West Africa, reported an 8.3% increase in cashew production, reaching 260,000 tons in 2023.
Despite this growth, export volumes remained stagnant due to high levels of smuggling to neighboring countries like Senegal and Guinea.
“The poor export performance is partly due to weak international demand and prices, but also to a monopoly on shipping containers at the beginning of the season,” noted a World Bank report.
The report highlighted how low international prices have impacted producer earnings, with prices not exceeding 150 CFA francs/kg in some regions, well below the government-set threshold of 375 CFA francs/kg.
Looking ahead, both Côte d’Ivoire and Guinea-Bissau have favorable prospects for the cashew sector in 2024. In Côte d’Ivoire, stakeholders are hopeful that better coordination and support will help meet the raw material demands of local processors.
In Guinea-Bissau, favorable weather conditions and a government support program for farmers are expected to boost production.
The World Bank also projects an improvement in exports due to the authorization of cashew nut exports through nine border routes, which previously relied solely on the port of Bissau.
“Maritime disruptions in the Middle East have led to higher freight costs between Asia and Europe, resulting in increased demand for cashew nuts from Africa,” the report mentioned.
This situation creates an opportunity for African cashew producers to command a premium over Vietnamese cashews on spot contracts, potentially opening new trade links with Chinese companies entering the processing market.
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