When Ivorian President Alassane Ouattara came to Pretoria in July, he brought a large business delegation with him. They, in turn, brought along chocolates and toiletries (palm oil, from Ivory Coast, is a major ingredient) for display outside the hall where the meetings were held.
But the main displays were reserved for cashew nuts, with samples put out for Ouattara and President Cyril Ramaphosa to try before entering the hall. Also on show were bottles of cashew apple juice — a product not commonly seen outside markets such as India, where it is used for cooking, though vinegar and wine could be made from it too.
Ivory Coast’s cashews are particularly good — at least, that’s what the Foods Co SA leaflet distributed at the event suggested.
“Average moisture content of exported Ivorian nuts is 9.6%,” the agro food-processing firm noted in French. That’s right in the 8%-10% range manufacturers look for.
And, the leaflet added, “the average number of nuts per unit weight, indicating the size of the nuts, is 186”. (The industry standard is 180-200, with a lower figure indicating better quality.)
But as was made clear during goings-on inside the hall, cashews — like cocoa — are a product Ivory Coast could provide in greater quantity.
We want to tell the story to the world. There is a huge amount of value here
— Krishanu Chakravarty
Cashews aren’t indigenous to Ivory Coast; the trees were originally imported from Brazil in the 1960s to combat deforestation and soil erosion. Today, however, the country is Africa’s largest producer and, with India and Vietnam, it ranks among the top three in the world.
Internationally, the cashew nut sector was worth $6.8bn in 2020. That’s after at least two decades of growth. Between 2000 and 2018, world trade in raw cashews more than doubled to 2.1Mt. African producers, led by Ivory Coast, were responsible for almost two-thirds of that growth. And, today, they account for more than half of all cashews produced.
In Ivory Coast alone, production in 2021 totalled 1.12Mt — and commodities analysis outfit N’Kalô and the International Nut & Dry Fruit Council both expect that to increase this year.
“Forty-four percent of raw cashew nuts get produced here in West Africa,” Krishanu Chakravarty, director of the Prosper Cashew project in that region, tells the FM in his Abidjan office.
But while Africa is producing vast amounts of cashews, it’s not benefiting from the full value chain. Consider, for example, the average tub of hand-sorted raw cashews sold by Woolworths. While some of those nuts originate in Africa — from, say, Mozambique, Tanzania and Ivory Coast — the rest are from India, Brazil and Vietnam. That’s because cashew processing takes place elsewhere.
Most raw cashews are sent to India and Vietnam for processing. India sells most of its nuts to the domestic market, which has grown in recent times, Chakravarty says. But most of the nuts reaching Europe and the US — and the SA market — are shipped via Vietnam.
In fact, only 7%-8% of Africa’s production is processed on the continent, says Chakravarty.
It’s a strangely convoluted supply chain, given Africa’s relative proximity to the main markets. “So if we can cut short this journey of raw cashew nuts and process it in Africa and sell it to the market of consumption, it will create two positive aspects: one, it will be reducing the cost of freight. Second, the more important part, would be reducing the carbon footprint,” Chakravarty explains.
It would also create more local jobs.
“Unlike many other food processing industries ... the industry has a large amount of manual angle to it,” Chakravarty explains. “It is not automatised or mechanised like cocoa processing or coffee processing. A large requirement is a semi-skilled human resource.”
One 5,000t unit easily requires 500 employees. Most are involved in peeling the nuts, using small knives to remove the shell. This process, done mostly by women, has to be managed carefully so the acid in the shell doesn’t damage their skin or the nuts.
Given the labour intensity of the process, Chakravarty believes the cashew sector is “one of the routes that will help us create employment and get people out of poverty”.
As a result, Ivory Coast is taking matters in hand, setting a local processing target of 50% by 2025.
“The agribusiness sites of Brobo, Yamoussoukro and Bondoukou aim to process 300,000t annually from 2022,” Cotton-Cashew Council processing director Karim Berthe told news outlet AFP in November. “These new facilities should boost the domestic processing rate from 10% to 30%-40%.”
The cashew sector could be one of the routes that will help Africa create employment and get people out of poverty
— What it means:
By Chakravarty’s estimate, the processing volume in West Africa as a whole should be able to increase from last year’s 140,000t to 500,000t. But there are some stumbling blocks.
“In 2018 and 2019 we did extensive research on what is stopping processors from being successful in Ivory Coast and Ghana, and access to finance is an important aspect,” he explains.
Setting up a cashew processing unit costs about $2m for a small one, or $6m for a large one. “But to run this cashew processing unit, the working capital requirement can be anything from $5m to $10m-$15m, depending on ... capacity,” he says.
It’s not always easy to access that kind of finance.
There’s also the issue of seasonality. To make processing profitable, it needs to take place year-round. Vietnam’s success, for example, lies in its consistent supply: it buys cashews from different parts of the world as they’re harvested, so cashews come in for processing throughout the year.
It means “a processor in Vietnam will buy from Vietnam, Cambodia, Indonesia, India, East and West Africa”, Chakravarty says.
Getting the technical assistance and know-how is also a challenge. “India and Vietnam have been in this business for more than 30 years,” Chakravarty says. “Africa has just started.”
And marketing efforts need to be stepped up. “If we process cashews here in Africa, and we want to sell to customers in Europe, why would they want to buy from us? Will it be price, sustainability, single origin? That’s something we need to figure out.”
According to Chakravarty, the Prosper Cashew project, with help from nonprofit TechnoServe, will be helping to set up cashew processing plants with an investment of $60m over the next five years in Ivory Coast, Ghana and Nigeria. While part of this funding comes from the US department of agriculture, a large portion will be raised by Prosper Cashew itself.
The project hopes to create 4,500 new jobs and help processors sell more than $200m of cashew products into local and international markets.
As part of its drive to encourage local processing, the Ivorian government is also subsidising logistical costs, and it has imposed a tax on the export of the unprocessed nuts.
In Nigeria, the world’s sixth-largest cashew producer, producers have also expressed a keen interest in deriving more benefit from their crop. According to News Agency of Nigeria, National Cashew Association of Nigeria secretary-general Sotonye Anga has called the crop the “green gold of agriculture”.
“If Nigeria develops the cashew value-chain, it will be one of its fastest tracks to economic diversification and prosperity,” he said. “Nigeria will be able to make more money, create more jobs, and earn more foreign exchange now that foreign exchange has become a major issue to strengthen the naira.”
In part, that could come from better using the different parts of the cashew plant.
The white edible kernel comprises just 22% of the raw cashew; the rest is the shell and apple. Vietnamese producers, for example, sell these on to China and other markets to produce biofuel, Chakravarty says.
Ethanol can also be produced from the shell. Suitable for a wide range of industrial applications, it has huge export value. And, instead of discarding the fibrous yellowish fruit at the tip of each cashew nut, this too could add value.
Agbaje Lateef, professor of microbiology and Adekunle O Adeoye, lecturer in food science, both at Nigeria’s Ladoke Akintola University of Technology, have been conducting research on producing citric acid from cashew apple juice.
The acid is “widely used to preserve blood, drugs and processed food and drinks,” they write on academic website The Conversation, and its global value is expected to reach $4bn by 2027.
Not only could this add value to cashew farming and increase income, they say — it could also reduce the environmental nuisance when the cashew apple is disposed.
As Chakravarty puts it: “We want to tell the story to the world. There is a huge amount of value here, and if we get our communication and articulation right, we will see a huge amount of interest for the business.”
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