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Cashew Market Update – March 2020
01.04.2020

Cashew Market Update – March 2020

They say that a crisis brings out the best and the worst in people. Maybe it is the same in markets. As I write the coronavirus continues to unfold all around us, I hope wherever you are that you stay safe.

At a time when demand for edible nuts is surging - housebound consumers in North America and Europe stock up on food and reward themselves with snacks - the cashew market has shown some of its worst traits.

First, the arriving West African crops are on hold as processors in Vietnam and India decide when will be the right time to enter the market. That means that West African farmers are depending on the management of the coronavirus risk in India and Vietnam even though at home in their own countries the virus is not yet a major issue. Will Vietnamese factories close? Does a lockdown in India mean that RCN purchases will come to a halt? Meantime consumers in destination markets are crying out for more supply of food products and edible nuts in particular. As the US food manufacturers association FMI pointed out, this is not a demand crisis it is a supply chain crisis. Second, it has been pointed out here more than once that the high dependence on supply from one processing country – the US purchased 86% of its cashew kernels from Vietnam in 2019 – will eventually give rise to a major problem. Today, coronavirus is not a major problem in Vietnam but many businesses are closed or working at reduced capacity to manage the risk that it might become one. If it becomes a major problem in Vietnam, consumers from Warsaw to Wichita will not be able to access the supply of cashew kernels. More tragically the poorest stakeholders, the farm families in West Africa, will not be able to sell their cashew nuts.

Third, West African countries are not well-positioned to manage the slowdown in RCN sales and shipments. There are not enough drying and storage facilities nor enough mechanisms to finance the crop in a crisis. The losses at the production and post-harvest level may be more damaging than the direct damage done to the demand by the coronavirus crisis.  The cashews falling from the trees in the coming days and weeks are still valuable and will have a value after the crisis has passed but only if they can be dried and stored well.    

Finally, rationality has left the building. The response of cashew processors and importers to the major surge in demand, the potential supply chain disruption, the return of China to the market and the prospect of crop losses in India and Cambodia has been to knock kernels prices down to prices last seen in October 2009 circa WW320 US$2.90-2.95 per lb FOB.  

The season had promised so much. Crops in almost all origins are looking good although there may be a problem in India with a late crop which often means that it will be reduced in size too. The demand is looking very good too. EU imports for 2019 were up by 17.5% and for January 2020 by 10%. The US and Canada imported a record of 170,389 tonnes of cashew kernels in 2019. US imports in January are up 21% over January 2019. Vietnams 2020 exports of cashew kernels until 15th March are up by 12% by volume. The market had fallen from the euphoric high of 2017 to a price for WW320 in the range US$3.20- 3.40 per lb FOB offering great value to buyers and the likelihood of prices improving as the year went on. The record crop forecast for 2020 looked likely to be absorbed without too much trouble. Even the Tanzanian old crop and the current crop had been exported down to the last 7,000 tonnes.  

Where to next? It depends largely on the measures if any put in place in Vietnam which has been successful in limiting the virus so far and India which appears vulnerable to the coronavirus crisis. The closure of the Cambodian border will be difficult for Cambodian cashew farmers to bear but it would deprive the Vietnamese processors of 150,000 tonnes of raw material less any volume that enters Vietnam undocumented. If Vietnamese processing stays operational (there are a lot of “ifs” these days) demand for RCN from West Africa should emerge within weeks.  The picture from India is even less clear. Moves to curtail the crisis have come into play in some areas this week. Some of the most affected areas are major cashew producers like Maharashtra and Karnataka. Processing has been reduced and buying from farmers is affected.There may be further crop losses as a result. However, the most serious impact of the coronavirus crisis in India and the World would be if Indian demand were to be seriously reduced. Simulations indicate that a 30% fall in Indian demand could reduce their RCN import needs in 2020 from 870,000 tonnes to as little as 430,000 tonnes. Let us not forget however that demand peaks in the second half of the year especially early in the last quarter by which time the crisis should have passed.Let us not forget however that demand peaks in the second half of the year especially early in the last quarter by which time the crisis should have passed.Let us not forget however that demand peaks in the second half of the year especially early in the last quarter by which time the crisis should have passed.

Demand in the Western markets looks less vulnerable due to the nature of the supply chains. Recent surges in demand are forecast to last 6 – 8 weeks. After that, there may be a return to normal demand. If the crisis were to continue past June there could be consequences for demand due to a severe economic downturn. There is no experience of a similar event although during the financial crisis of 2008 the interruption to demand was limited.

Cashew Market

From the West African perspective, the markets are confused through lack of good information and the sheer shock of seeing what is unfolding. It is essential to recognise that the demand for cashew kernels is not collapsing. If anything, it is increasing.  There may be disruptions to the supply chain. It may be that in some countries the crops will be reduced or lost. It is fairly certain that there will be good demand for RCN and cashew kernels. The challenge is to be ready to meet demand for RCN when it picks up which could be in a few weeks. In order not to lose the harvest it should be dried and stored and ready for processing because Vietnam and India will run out of RCN within 3-4 months which means they must buy within 2-3 months.

There have been concerns about workers in cashew factories and rightly so. However, a well-run, food safe cashew factory with washing facilities and uniforms could be the safest place to be. In some countries, factories have reduced capacity in order to implement social distancing among staff but they have not closed. Processors would be well advised to take professional advice and governments would be well advised to support them in doing so. This crisis could be the best opportunity to demonstrate that African cashew processors offer a viable alternative to the high dependence of buyers on one origin. In January 2020 86% of US cashew kernels imports came from Vietnam. Vietnam has not yet suffered the worst of the COVID19. We hope very much that they will not but if they do cashew kernel supplies for Europe and the USA would be decimated.Has there ever been a clearer argument for diversifying buying ?

The market has moved from a situation where supply and demand were forecast to be well-matched. The market was expected to move into the next phase after the crash from 2017 but it has entered a position of uncertainty. Some reassurance can be taken from the emergence of China from the crisis but there is a  long way to go. The cashew market is not well served with information normally. In times of crisis, it is essential to have access to the facts. Make sure that your information is accurate and comes from reliable sources before making decisions. Avoid the irrational thinking that is so common in markets at present.  Above all follow the guidelines to control the spread and remember we are all in this together.

Author: Jim Fitzpatrick

The Cashew Club



GIZ/ComCashew & GSDI reinforce the capacity of over 100 Agriculture Training Providers on cashew in Ghana
23.03.2020

GIZ/ComCashew & GSDI reinforce the capacity of over 100 Agriculture Training Providers on cashew in Ghana

The Competitive Cashew initiative (GIZ/ComCashew), in collaboration with the Ghana Skills Development Initiative (GSDI) with support from the Ministry of Food and Agriculture (MoFA) has organised an upskilling programme on cashew for some 131 Training Providers from Agriculture, Technical and Vocational Institutes in the various regions in Ghana to enhance their knowledge on the cashew crop. The training took place at the Eusbett Hotel in Sunyani in the Bono region of Ghana.

The first edition, which took place from Monday 10th February to Friday 14th February 2020, saw the participation of 71 Training Providers in the week-long programme. The second edition came off between 9th and 13th March 2020 for some 60 participants.

The main objective of the programme was to transfer knowledge on cashew to the training providers in order to increase their capacity. These Training Providers were from 13 institutions across the country namely: Adidome Farm Institute, Comboni Technical & Vocational Institute, Ho Technical University, Kpando Technical Institute, Father Dogli Memorial Technical Institute, Kumasi Institute of Tropical Agriculture, Assemblies of God Technical University, Asuansi Farm Institute, Asuansi Technical Institute, Wenchi Farm Institute, and University College of Agriculture and Environmental Studies.

Theoretical and practical approaches were employed in the delivery of the training content. Participants were educated on topics ranging from new cashew plantation establishment, improved planting material production, cashew breeding, rehabilitation of old plantation, pest and disease management and Good Agricultural Practices. On processing, participants learnt about cashew apple, nut and shell processing, and marketing. They were also taken through processing equipment selection, operation and maintenance.

The Training Providers tried their hands at grafting of seedlings and cashew apple processing at the Wenchi research station and the Wenchi Farm Institute. Other practical sessions were on determining the quality of cashew and Kernel Outturn Ration measurement among other things.

Resource persons included crop scientists and entomologists from key research institutions, the Ministry of Food and Agriculture and experienced cashew industry players. Dignitaries present at the events include the Director of Crop Services at the Ministry of Food and Agriculture (MoFA) - Mr. Seth Osei Akoto, the Municipal Chief Executive for Sunyani -Honourable Justina Owusu-Banahene and the leadership of GIZ/ComCashew and GSDI.



Développement de la filière anacarde en Afrique: Une centaine d’experts africains en formation à Abidjan
27.02.2020

Développement de la filière anacarde en Afrique: Une centaine d’experts africains en formation à Abidjan

L’Afrique est la première région productrice et exportatrice de noix de cajou dans le monde, avec la Côte d’Ivoire comme pays leader. Cependant, la filière anacarde souffre d’un manque d’experts qui devront travailler pour sa pérennité et son développement.
C’est pour répondre à cette problématique que l’Initiative du cajou compétitif (Giz/ComCashew), en collaboration avec l’Alliance du cajou africain (Aca) et soutenue par le Conseil du coton et de l’anacarde de Côte d’Ivoire, met en œuvre depuis 2013 un grand programme de formation dit des maîtres formateurs qui en est maintenant à sa 10e édition. La première session de cette édition s’est ouverte le 24 février à l’hôtel Belle Côte à la Riviera.
Michel Kouassi, qui a représenté le ministère de l’Agriculture et du Développement rural, a insisté sur le fait que le besoin de formation est réel et les résultats de la présente session sont impatiemment attendus par les autorités ivoiriennes.






Les participants à la session de formation viennent de neuf pays africains et de l’Allemagne. (Dr)

En lire plus: Développement de la filière anacarde en Afrique: Une centaine d’experts africains en formation à Abidjan 

Noix de cajou : Comcashew invite les pays producteurs à mettre en commun leurs expériences

 

 

 

                                             

 



Ivorian Cashew Investment Day – Salon International de l’Agriculture Paris 2020
25.02.2020

Ivorian Cashew Investment Day – Salon International de l’Agriculture Paris 2020

Côte d'Ivoire has projected a harvest of more than 800,000 MT of cashew this season, again reinforcing the West African country's position as the world's largest producer of raw cashew nuts. A number that is more than just a statistic, but stands for numerous development opportunities for the country: creation of jobs in production and especially processing, value addition along the value chain, climate resilience and adaptation and above all a source of investment into the local economy.

To attract such investment, the Ivorian government used its presence at the international Agricultural Fair in Paris (SIA) to organize a "Cashew Day" at its pavilion at the exhibition on February 24.

"There is no other agricultural sector that is receiving as much public attention from the government as the cashew sector in Ivory Coast”, said Dr. Adama Coulibaly, Director General of the Cotton and Cashew Council (CCA). According to the DG, the political will is there, and it is a national goal to increase value addition in the cashew sector. To this end, many political measures, incentives and support programmes are being undertaken.

Dr. Coulibaly, used the occasion to announce a set of incentives earmarked for the establishment of processing companies, such as the creation of industrial zones with tax breaks, reduction of import duties on processing machines and subsidies for local processing.

“Côte d’Ivoire has proven to the world that it can produce, now we have to show you that we can also add value”.

The kernel subsidy alone, which was introduced in 2016 (local processors receive 400FCA/kg kernels processed in CIV), has so far amounted to more than 8 billion FCFA. According to CCA, by 2023 Ivory coast will be highly visible on the kernel market, due to the efforts currently being made to add more than 20 processing plants to already existing ones.

Together with a representative from Mali and Senegal, as well as an international researcher, Dr. Coulibaly reinforced the need for cross-country cooperation in the cashew sector. The Consultative International Cashew Council (CICC) plays a special role in this regard: founded in 2016, the CICC now has 11 member countries, a registered office in Abidjan and has recently appointed its first Secretary General. This organization, will coordinate all producing countries and has the objective promote relations and policy dialogue between producing countries to boost the sector at the African level and beyond.

As a development partner, GIZ-ComCashew has accompanied the CCA (and previously ARECA) in the past decade and is committed to enhance the cooperation, especially with regards to the promotion of local value addition, access to international markets and strengthening of cashew networks and exchanges. The Director General expressed that he is appreciation for this cooperation and support from ComCashew and is confident that we can together achieve our shared objective: to make the cashew sector competitive.

Since its inception in 1964, SIA has been the rendez-vous of the French agricultural sector and every year thousands of visitors and experts attend the week-long fair.  In addition to exhibitions on French agriculture, the world is also a guest in Paris and every year, African countries also have the honor of presenting and promoting their agricultural sector.

 

 



GIZ Com Cashew to assist revive 7 defunct cashew companies.
17.02.2020

GIZ Com Cashew to assist revive 7 defunct cashew companies.

The GIZ Competitive Cashew initiative (ComCashew), an international development project in the cashew value chain, has renewed its commitment to holistic transformation of Ghana’s cashew sub-sector.

To this end, the organisation is in the process of assisting the revival of seven defunct cashew processing companies in the country to boost competitiveness in the value addition space. Of the13 existing cashew processing factories in the country, with total production capacity of about 65,000 metric tonnes, only two are currently in operation: the rest have all shut down. 

Financial constraints, obsolete machinery and processing technology, as well as lack of access to substantial quantities of raw cashew nuts (RCNs) at a competitive price have culminated in collapse of the factories. Even with two which are currently in business, they [USIBRAS Ghana Limited in Prampram, and Mim Cashew and Agricultural Products Ltd.] are producing below installed capacities.

Read more: GIZ Com Cashew to assist revive 7 defunct cashew companies.



Ghana earned $378 million from the sale of 110 tonnes of raw cashew nuts in 2018.
11.02.2020

Ghana earned $378 million from the sale of 110 tonnes of raw cashew nuts in 2018.

The amount represented 43 per cent of the total revenue obtained from non-traditional export commodities in the country.

The Director of Crop Services of the Ministry of Food and Agriculture (MoFA), Mr Seth Osei-Akoto, announced this at the opening of a one-week technical upscaling development training programme on cashew value chain promotion in Sunyani yesterday.Seventy-two participants, made up of tutors from agriculture training institutions in Ghana are taking part in the training programme to ensure that they acquire the right knowledge in order to pass it on to potential trainees who enrol in their institutions.

The training was organised by Competitive Cashew Initiative (GIZ/ComCashew), in collaboration with the Ghana Skills Development Initiative (GSDI), with support from the MoFA.

Read more: Ghana earned $378 million from the sale of 110 tonnes of raw cashew nuts in 2018.



L'année électorale semble profiter aux producteurs de noix de cajou en Côte d'Ivoire
07.02.2020

L'année électorale semble profiter aux producteurs de noix de cajou en Côte d'Ivoire

La campagne 2020 de commercialisation des noix de cajou en Côte d'Ivoire ouvre aujourd'hui, a-t-il été décidé hier en Conseil des ministres. Le prix minimum obligatoire d'achat bord champ est augmenté de 25 francs le kilo, le portant à FCFA 400 pour la campagne 2020.

Parallèlement, le gouvernement resserre le contrôle aux frontières afin d'éviter "la fuite des noix de cajou par les frontières terrestres". A cette fin, le Conseil du Coton et de l’Anacarde est autorisé "à prendre des mesures de lutte contre les exportations frauduleuses, allant jusqu’à la saisie et à la vente immédiate des produits saisis" et le ministère de la Justice doit mettre en œuvre "des procédures d’urgence" pour sanctionner "la commercialisation et l’exportation illicites".

En lire plus: L'année électorale semble profiter aux producteurs de noix de cajou en Côte d'Ivoire (par COMMODAFRICA)



Lorenz Snack-World newest member of SNI
05.02.2020

Lorenz Snack-World newest member of SNI

Lorenz Snack-World has become a member of the Sustainable Nut Initiative (SNI). SNI, a member of the ComCashew board, brings key players in the nut industry together to strategically develop sustainable supply chains and a traceable nut sector. SNI’s members are committed to improve the transparency in the nut chain, strengthening the relationship with farmer cooperatives and working towards volume and quality improvement.Image result for lorenz snack world

Read more: Lorenz Snack-World newest member of SNI



CALL FOR APPLICATIONS: PhD and Masters Scholarship
03.02.2020

CALL FOR APPLICATIONS: PhD and Masters Scholarship

The Resilience Against Climate Change (REACH) project, is inviting applications for PhD and Masters studies under a five-year project, “REACH-Social Transformation Research and Policy Advocacy”. Funded by the European Union, the project is a research collaboration between the International Water Management Institute, University of Ghana-Centre for Migration Studies, University for Development Studies and CSIR-Science and Technology Policy Research Institute. Over the course of the project, we expect to support a total of 3 PhDs and 15 Masters (first batch of 10; second batch of 5) with full studentships for four and two years respectively. All the students will follow the stipulated training procedure of the host Universities, with joint supervision across project collaborating organisations. In addition, the students will participate in policy advocacy events (e.g. workshops, learning events and policy dialogues), with the aim of bridging research and policy, through students’ direct involvement in the narratives, practices and networks of development planning. 

Eligibility Applicants will be required to meet the general admission requirements of University for Development Studies or University of Ghana, depending on where they intend to study. Applicants must have applied to any of the two Universities for the 2020/2021 academic year.  In addition to the general requirements, applicants should preferably have a background in social science research and methodological skills. However, suitable students with any relevant disciplinary background can be considered. Applicants must: 

  • Hold a relevant degree (i.e. First Degree for persons applying for the Masters and Masters Degree for those applying for PhD) in social science/humanities related discipline(s). Particularly (but not limited to), Geography, Development Planning Studies, Migration Studies, Agricultural Extension, Agricultural Economics, Climate Change, Rural Development Sociology, Sociology, Anthropology, Political Science.
  • Be highly motivated to pursue postgraduate studies according to the approved study plan of the Universities involved

Award of scholarship is subject to gaining admission to the University of Ghana or University for Development Studies during the stipulated academic year. The scholarship covers:   

  • Full tuition fees
  • Full research costs towards thesis
  • Monthly stipend to cover living expenses in Ghana 

This research component is part of the overall REACH project, jointly implemented with GIZ/ComCashew. You can read more here .