Côte d’Ivoire’s cashew processing sector is at the crossroads

Côte d’Ivoire’s cashew processing sector is at the crossroads

Over the last 25 years, Côte d’Ivoire’s cashew production has seen exploding growth. In nearly 10 years, the Ivorian cashew crop has surged 154% from 280,000 MT in 2007 to 711,000 MT in 2017. In 2016, Côte d’Ivoire overtook India, the world’s largest cashew producer, as the world’s leading raw cashew nut (RCN) exporter, cementing its status as the leading RCN origin for Asian cashew processors.

However, Côte d’Ivoire only processes infinitesimal volumes of its cashew crop, as the global industry is concentrated in India and Vietnam, which have a combined 3.4 million MT installed processing capacity. In particular, Vietnam is a processing powerhouse, renowned for its innovation and efficiency. It is noteworthy that Vietnam grew its cashew processing sector from scratch in the early 1990s to 1.4 million MT installed capacity today.

The seeming absurdity of cashew trade flows leaves kernel buyers scratching their heads. Why can’t they buy kernels directly from African cashew producers, who should capture maximum value from their massive crops? This conundrum spurred the Ivorian government to make cashew processing a policy priority, calling for the total crop to be processed domestically by 2020.

However, this government initiative has resulted in mixed success. While installed processing capacity in Côte d’Ivoire has expanded to 109,500 MT, the vast majority of the country’s 29 cashew factories are not operating at even a fraction of their full capacity. This reflects that, despite attractive government subsidies, Côte d’Ivoire’s cashew processing sector is hobbled by high conversion costs that undermine its commercial viability, making it difficult to compete with efficient Asian processors.

The difficulty facing Ivorian cashew processors to procure RCN is often singled out as the sector’s principal weakness. As Ivorian factories do not import RCN, they rely on keeping stocks throughout the year. Financing inventory is costly, as processors located upcountry in the cashew belt are borrowing credit against stocks at 12% interest. Weight loss is also an inevitable factor leading to rising costs. This reliance on stocks puts Ivorian factories at a disadvantage compared to their Asian counterparts, which only finance three months of stocks at lower interest rates, as they import from different origins. This gives Indian and Vietnamese factories a huge advantage in managing their cash flow as they are not tying up capital in inventory like Ivorian factories.

Furthermore, given the short duration of the cashew season, which lasts six months, Ivorian processors have a narrow window to procure raw material to keep their factories running throughout the year. A market known for speculation, RCN is prone to dramatic price increases. Given that factories are already borrowing at eye-watering interest rates from local banks, local processors cannot afford to compete with foreign exporters, who tend to get their funding from Dubai or Singapore at much cheaper rates – up to a third of the cost of local financing for Ivorian factories. Unable to match high prices, processors cannot secure the raw material to operate their factories. During the last three cashew seasons from 2015 to 2017, prices were extremely frothy. In April 2017, prices peaked at US$2,150/MT C&F Ho Chi Minh City. This represented a dramatic surge in price, as average RCN prices did not historically exceed $1,900/MT.

Moreover, two structural trends exacerbate the crowding out of local processors from the Ivorian RCN market. Firstly, if cashew exporters and processors aim to purchase high-quality cashew – defined as having on average 48-49 outturn (the weight of kernels (lbs) per 176lb (80kg) bag of RCN) – during the first two months of the cashew season, they are obliged to pre-finance their suppliers. Given the lack of trust between cashew farmers and middlemen who buy at the farmgate due to a history of non-payment for delivered cashew, farmers demand spot payment. However, local buyers are starved of working capital; they need their clients, exporters or processors, to fund them upfront. Therefore, cashew exporters and processors act like banks and fund their suppliers for tens to hundreds of thousands of dollars without receiving any type of collateral, exposing themselves to significant risk.

Not only do local factories lack the liquidity to pre-finance, they cannot compete with traders who pay on delivery. Given the short span of the season, cashew suppliers demand rapid payment as they are looking to maximise traded volumes. However, the vast majority of cashew factories are using credit lines against stocks (nantissement), meaning they cannot finance without collateral. A nantissement credit line is cumbersome and takes several days to process, as it requires that a collateral manager verify the quality of the cashew and guarantee the security of the goods. In a frothy cashew market, cashew factories struggle to attract suppliers as they cannot pay quickly and offer the best price on the market.

In addition, the rampant prevalence of smuggling has a distorting effect on RCN prices as it forces buyers who’ve pre-financed to pay inflated prices for poor-quality cargo in case of supplier default. Every cashew season, Côte d’Ivoire loses large volumes of RCN to Ghana, which commands a premium for superior quality on the international market. This premium, coupled with Ghana’s lower export taxes, allows buyers across the border to pay an additional XOF 50-100/kg over the market price for Ivorian RCN. In 2017, Côte d’Ivoire lost an estimated 100,000-140,000 MT of RCN to smuggling. If suppliers sell pre-financed cashew to other buyers who are willing to pay a higher price, rather than the rightful owner who paid for the cargo upfront, buyers are obligated to pay higher prices for poorer-quality cargo in order to collect what they can of their capital. This has a perverse effect on the market leading to inflated RCN prices and forcing buyers to absorb losses.

While RCN procurement is the most visible problem facing Ivorian processors, it is only the tip of the iceberg of the processing sector’s lack of competitiveness. As Asian cashew processors dominate the global processing sector, they play a key role in influencing the raw cashew nut price. If RCN prices surge, owing to higher demand for kernels, efficient Indian and Vietnamese processors can absorb higher raw material costs by increasing efficiencies and cutting manufacturing overheads. In contrast, Ivorian cashew processors are hobbled with high manufacturing overheads, which undercut their competitiveness vis-à-vis Asian processors. As the majority of local factories are based in the less developed cashew growing regions, lack of infrastructure weighs heavily on costs. Electricity is expensive, especially when compared to Indian and Vietnamese processors, which have better access to the national grid.

Moreover, the imported machinery used in Ivorian factories is often of poor quality. This, coupled with a lack of experience and technique, leads to a higher percentage of broken and low-quality grade kernels. However, Asian cashew processors are able to manage this problem. India’s large domestic consumption can absorb broken and other low-grade kernels, while Vietnam is the key supplier of low-grades to China’s vast cashew market. In contrast, Côte d’Ivoire lacks a domestic or export market to absorb broken, spotted, or other low-grade kernels. Domestic cashew consumption is tiny while European and American buyers are only buying whole, white kernels (typically the W320 grade).

Another factor exacerbating the kernel quality problem is the shortage of efficient and skilled labour. Ivorian cashew factories have struggled to train and retain qualified workers. While cashew shelling, the first step in cashew processing, is highly mechanised, peeling and grading require manual labour. The productivity gap between Ivorian cashew factory workers and Vietnamese workers is considerable. As peeling is a delicate and time-consuming process, Ivorian workers struggle to peel efficiently and quickly, increasing the quantity of broken kernels.

Although Côte d’Ivoire will miss its target of processing its total cashew crop by 2020, it would be premature to jettison the goal of building a sustainable and competitive local cashew processing sector. Indeed, if Côte d’Ivoire focuses on getting the economics right and narrowing the costs gap with Vietnam, it can serve as the key cashew kernel supplier to Europe and America, as large buyers are keen to support processing in Africa. In response, cashew trade flows would recalibrate – India would focus on its giant domestic market, while Vietnam would supply to China.

The participation of large RCN traders – such as ETG and Tan Mondial, the second- and third-largest players by volume in Côte d’Ivoire – is critical to the development of a successful local processing sector as it would create a critical mass of well-financed factories with experienced management in the international cashew trade.

The Ivorian government needs to offer the right fiscal incentives that offset the sector’s high conversion costs in order to attract multinational trading houses into investing in processing. This could represent a turning point for Côte d’Ivoire’s cashew processing sector, transforming it into a thriving manufacturing sector.

Kerala Cashew board will import RCN directly

Kerala Cashew Board's import plan gets green light



In a major shot in the arm for the fledgling Kerala Cashew Board’s attempts to clinch a deal with cashew nut suppliers in Africa, the Industries Department has waived the need for an e-tender. Now the Board needs only to put out bids in the vernacular dailies of suppliers like Ivory Coast and Guinea-Bissau for the purpose.The latest move came after the government-to-government purchase deal and the expression of interest (EOI) invited by the Kerala Cashew Board elicited a tepid response from the African nations. According to the government order(GO) issued by K Elangovan, Principal Secretary, Cashew Industries, the state government has given permission to the Cashew Board - which was earlier directed to go in for an e-tender or government-to government purchase or other legal means to ensure transparency in the procurement proceedings - to float short tenders in the local vernacular dailies in Ivory Cost and Guinea-Bissau, where the harvesting season has begun, to procure the nuts needed to revive the cashew sector in Kerala.


It is the LDF Government’s policy to ensure round-the-year functioning of the cashew processing factories, J Mercikutty Amma, Minister for Cashew and Fisheries, told Express. “The state is exploring all avenues to procure raw nuts to ensure the smooth functioning of the sector. Though challenges are galore, the government is hopeful of clinching a deal with the suppliers in African countries,” she said.


Sources close to the Kerala Cashew Board said the sector is ruled by middlemen. The suppliers in the African countries normally will not evince interest in taking part in the tendering proceedings of Kerala as the tender requirements are somewhat high for them to meet. Further, they have enough opportunities to sell their stocks there minus the labyrinthine formalities here. Besides, a good number of traders in India are very active in the African countries who used to procure cashew nuts from the farmers and local traders there and store them in their warehouses in Africa.


Most importantly, they know how to capitalise on the market dynamics in India and make a killing by hoarding and pushing up the market rates. So it remains to be seen whether the short tender to be floated in African countries will indeed yield any results, they say. As per the statistics available with the Directorate of Cashewnut & Cocoa Development (DCCD), the state’s cashew output was pegged at 83,980 MT in the 2016-17 financial year. This accounts for only 14 per cent of the sector’s total requirement.


The state requires around eight lakh cashew in a year to ensure round-the-year work for the nearly three lakh cashew workers, 90 per cent of whom are women.According to the Factories and Boilers Department registry, there are around 750 registered cashewnut processing factories in the state, out of which only 450 are operational. The Centre had slashed the import duty on cashewnuts from 5 per cent to 2.5 per cent recently to revive the sector. However, certain clauses which make the export of at least 25 per cent of the nut imports mandatory poses problems to the players in the sector making it well-nigh impossible to meet for several stakeholders, say experts.


● Kerala Cashew Board’s attempt to purchase nuts though EOI and government-to-government purchase evinced tepid response.

●Now the government gave permission to float short tenders in local dailies in Africa.

●The DCCD stats say the domestic production was 83,980 MT cashew in 2016-17, around 14 per cent of the total requirement of the sector.

●The state requires around 8 lakh MT cashew annually to ensure round the year work for around 3 lakh employees, 90 per cent of whom are women.

●Factories and Boilers Department registry say around 750 registered cashewnut processing factories are there in the state, of which only 450 are operational now.

Kollam cashew industry feels sick

What ails cashew industry


The genesis of the present crisis in the cashew industry in Kollam can be traced to flourishing of small and medium enterprises that came up in the area during the early part of the present last decade. The key issue facing the SME sector, mainly promoted by people having domain expertise in processing alone with limited capital, is the lack of access to raw material market and the market for finished products.


The Cashew Export Promotion Council has found the 35 per cent hike in minimum wages that came into effect in March 2015 has adversely affected the industry. The import duty of raw cashew at 5 per cent and import of sub-standard processed cashew from Vietnam has also affected the domestic market in the country. The State has also not yet received the GST refund after the advent of new taxation system. The inadequate supply of loans has also contributed to the lesser production quantity.


According to a person who has undertaken an extensive study of the sector cashew industry, Kollam is an ideal place for implementing the cluster approach by which procurement of the raw material could be done collectively and the processed kernels could be sold as a common brand. “A detailed proposal in this regard has been prepared and submitted to banks and other authorities concerned. We are waiting for the response,” he said, seeking anonymity. The banks have, however, showed no interest in the cluster model.

Can Africa change its fate with cashew processing?

Bearish market for cashew nuts, but processing could double in Africa

The cashew market is buzzing at the moment, especially at the world's largest producer and exporter, Côte d'Ivoire. Several press articles report low prices, lower quality, queues of trucks in ports, etc. Explanations of Pierre Ricau, Agro Markets Analyst of N'Kalô Service, collected by CommodAfrica.

The demand is calm and the abundant supply of raw cashew nuts

The quality is a little worse in Côte d'Ivoire and Ghana, partly because of the heavy rains that fell in these two countries in March-April, but especially if the demand is correct, it is calm.

Why ? Essentially because India and Vietnam had good harvests locally and they started the 2018 campaign with high residual stocks from the previous season. Pierre Ricau estimates them at least 200,000 tons. Importers are therefore quiet and gradually the balance leans against the producers. After three bullish seasons, producers started the 2018 campaign with a very speculative attitude. " Many producers have stored most of their crop and now for two to three weeks they are all starting to be scared and looking to sell. This lowers local prices because there are more sellers than buyers ".

A difficult situation specific to Côte d'Ivoire

In Côte d'Ivoire, the situation has become more complex with the implementation of an incentive policy to develop processing. "This year, Côte d'Ivoire has increased the export tax on raw nuts and at the same time has put in place a procedure whereby an exporter is obliged to make an offer to sell to processors before exporting. Normally, exporters must reserve 15% of volumes exported to processors. So when they want to export for example 1000 tons, they have to auction 150 tons for the processors. There is some delay for the answer. All this hinders the exports of Côte d'Ivoire enormously because the procedure is longer than the tax. In a bearish campaign, the decline has doubled in Côte d'Ivoire"Pierre Ricau points out. Two weeks ago, buyers were still paying the minimum price, FCFA 500 per kilo, today the price is between FCFA 350 - FCFA 400 per kilo. " These are good prices for cashew but they are much lower than what producers used to receive in the last three years ."

The situation is not the same in the other countries of the sub-region even if in all countries prices have fallen compared to the previous season. In Burkina Faso and Nigeria, prices are falling but the fall is not sudden and producers have managed to sell the majority of their production before the decline. In addition, in Nigeria, the price today is around CFAF 600 per kilo.

In Guinea Bissau, there are big problems, the government has set a very high minimum price - FCFA 1000 - and some policies, including the Minister of Agriculture, encourage producers not to sell below the minimum price. At the moment, the purchases are made to FCFA 700 for the good quality but that will not remain because the supply is abundant.

In the Gambia and Senegal, prices are starting to fall but remain high, around FCFA 600, FCFA 700 or FCFA 800 per kilo. However, says Pierre Ricau, it is possible that in two to three weeks, prices fall below FCFA 500 everywhere due to the abundance of cashews. What is certain is that the campaign will be very spread with exports until September.

The transformation could be winning

The situation is favorable for processing with lower prices and abundant supply. Pierre Ricau estimates that cashew processing in Africa could double this year. But not all processors are in the same boat. For those who can afford the nut, they are already covered 60 to 70% of their needs. There are about ten companies in Côte d'Ivoire, two in Benin, four in Burkina Faso and two in Ghana. " The factories that in each country had shown that they were successful but could not refuel will do it this year, " says the analyst.

Demand for cashew kernel remains vibrant

In the first quarter of 2018, demand for cashew kernels remains very dynamic in the main consumer markets in Europe and the United States, with a 13.6% increase in imports to 57,802 tonnes. The increase is particularly noticeable in Europe with 29,023 tonnes imported, or nearly 25% more than the first quarter of 2017, according to statistics provided by N'Kalô.

Ghana plans to put export levy

Cashew export levy awaits cabinet approval



The proposed Cashew Export Levy bill is expected to discourage excessive exports of RCN and promote value addition, aimed at reviving defunct cashew processing factories.


Only two out of about 13 cashew processing plants in the country are in business; the rest have shut down, largely because of unhealthy competition from exporters of the RCN.


The bill will also give birth to the much-awaited Cashew Marketing Board. The Board is expected to regulate all activities in the cashew industry. Many industry watchers and players are of the firm belief that establishment of a Cashew Marketing Board will be the catalyst to sanitising the industry and making the commodity a leading agricultural foreign income earner.


“I’m sure the bill will be passed into law before end of the year. But until it comes into force for the Board to be constituted, GEPA will do everything within its power to sustain the cashew industry,” Ms. Klenam told the B&FT during a field visit to some cashew grafted seedlings nursery sites in the Brong Ahafo Region.


The GEPA has funded the Cashew Industry Association of Ghana (CIAG) to produce 400,000 grafted seedlings in support of farm expansion and cultivating new cashew plantations. From a budget of GH¢600,000 released by GEPA, CIAG has contracted 15 private nursery operators in cashew-growing areas to produce the grafted seedlings.


The move is aimed at increasing annual production from 80,000 metric tonnes to 300,000mt in the next ten years. This is projected to increase export earnings from US$197million in 2016 to about US$3billion by 2027. It is a component of the ten-year cashew development plan that was launched in February this year.


The familiarisation visit took the GEPA boss and her entourage to Techiman, Jema, Kintampo and Wenchi, where she interacted with the grafters. She was impressed with the progress of work and urged the CIAG to train more grafters, especially women and the youth, to serve as a vehicle for job creation.


Executive Secretary of CIAG, Aaron Akyea who conducted the GEPA team around, revealed that the demand for cashew grafted seedlings has soared exponentially since launch of the Cashew Development Plan. This, he indicated, underpins the need to scale-up production of seedlings to match the demand from farmers and other investors.


He however observed that in order to produce the required grafted seedlings, the GEPA must fast-track establishment of scion-banks to aid the process.


Under implementation of the Development Plan, 20 scion-banks have been slated to be developed. Access to scions for grafting has been identified as a challenge for the nursery operators. Currently, there is only one such scion-bank at the Wenchi Agricultural Station, but managers at the station have been rationing harvesting of scions there. This practice, according to them, is to help equitably supply its overwhelming dependents.


The Nursery Operators also mentioned their inability to erect proper structures, and consequently appealed for the GEPA to assist with inputs like shed-nets and iron poles for erecting appropriate nursery infrastructure. Due to the poor state of their infrastructure, most of the nurseries are at the mercy of adverse weather conditions.

Cashew stuck at port due to no buyers in the market

More than 300 cashew trucks stuck in Ivorian ports following fall in cashew prices

More than 300 cashew trucks are stuck in Ivorian ports and other places of unloading following the fall of the price of the cashew kg, yielded between 250 and 400 FCFA, said Monday to APA Abdoulaye Sanogo, the secretary general of the National Federation of Buyers and Cooperatives Cashew Ivory Coast (Fenacaci). "Because of the slump, the price range is today between 250 and 400 Fcfa maximum (...). And it is more than 300 trucks that are loaded at the port of Abidjan, San Pedro (southwest), in factories for a month and can not unload, "said Abdoulaye Sanogo.Asked also about the prices practiced in the production areas in Côte d'Ivoire, the Secretary General of the National Federation of Cashew Producers of the Ivory Coast (Fenacajou-Coop-Ca), Metan Koné, affirmed that "the prices are trading between 200 and 300 FCFA on the ground.

This situation is due to the total stopping of the exporters who complain in particular of the poor quality of products and especially the official minimum prices they consider "high", asking for a readjustment of prices. The official prices of the cashew nut campaign were fixed on February 15, 2018 at 500 FCFA / Kg at the edge of the field, 525 F / Kg at the domestic store price and 584 F / Kg at the port price. For Mr. Metan Koné, the Ivorian state should, in the light of the prevailing situation, organize a round table with all the actors in order to find a solution.

Despite the blockage that manifests itself by several hundred trucks loaded in the various ports and unloading place, the Cotton-Cashew Council, regulator of the sector decided this weekend to maintain the official prices announced at the beginning of the season. and instead raises the awareness of producers to maintain the good quality of their production.This situation leads operators to return their cargoes to the base, said the Secretary General of Fenacaci, confident that "the problem is that exporters have informally decided to stop buying (cashew) since the mandatory price which they have to buy is too much.

"We need the government to lower the price because quality has dropped" since mid-April, the beginning of the rainy season and global production is also taking off among the biggest buyers of our Coastal Walnuts like Ivory Coast, added Sanogo.Vietnam and India are the first buyers of cashew nuts in Côte d'Ivoire. The difference between their production and processing is offset by imports from Côte d'Ivoire and other countries. In recent years, Vietnam has become the largest buyer of cashews in Côte d'Ivoire with 450,000 tons registered in 2017.

These countries, which are also cashew producers, have put in place a policy to be self-sufficient in increasing the yield of their fields, by financing producers in neighboring countries such as Cambodia, reducing their import requirements to Côte d'Ivoire, Sanogo said.In the previous season, Cashew Kg in Côte d'Ivoire, the world's largest producer with 711,236 tonnes in 2017 (representing half of West Africa's production and 22% of global production) was well sold up to 800-900 Fcfa "against 600 Fcfa at the beginning of the 2018 campaign.

" Producers have made the retention hoping that this will reach 900 or even 1,000 Fcfa, "continued the Secretary General of Fenacaci, noting that some nuts are neglected under the trees because of the discouragement of farmers, which could lead to a decline in production for the 2018 campaign.On 21 April 2018, Côte d'Ivoire and the World Bank signed three loan agreements of approximately CFA 157,530 billion to support the processing of cashew nuts, the fight against coastal erosion and implementation of the rural land policy.

Poor quality no buyers!

The failure of cashews causes the closure of several stores in Odienné and Kaniasso

Odienné - Several buyers of Odienné and Kaniasso said Friday, during an interview with the AIP, to have closed their stores because of the slump of cashews at the port of Abidjan. "I stopped shopping for a few weeks. The reason is that the price at the port is not interesting (575 - 580 / kg). When you take into account the commission of the trackers (10f to 15f), we can not buy the cashew nuts at 500 f edge field as stopped by the government, "said Soro Fougnigué, cashew buyer in Kaniasso.Like him, some buyers in Odienné, lack of funding because of the low prices of the port, have chosen to close their stores and stop any purchase to observe a little bit.

They accuse the government of "complicating purchases with too much tax", which has driven many exporters out of the country, resulting in a lack of funding on the ground. Since the reform of the cashew sector in 2013, the price went from 225 in 2014 to 500f in 2018, but in the field, the actual price practiced was well over twice the official price. But in 2018, producers and buyers recognize that purchases are difficult because of lack of funding.As a result, a good amount of the Ivorian product is sold in neighboring countries. More than 25 tonnes leaving for Mali were seized by the police and the agents of the council of the cotton and the cashew, in the department of Kanaisso.

India's hunger of RCN

Cashew processing export units face supply crunch amid low domestic output-INDIA

India’s cashew industry might have to increase domestic production to over 2 million tonnes by the year 2025, as the African countries from where India imports raw cashew nuts are aiming at more localised processing. While India has a capacity to process 2.5 MT raw cashew, at present it produces only a third of that – 700,000-800,000 tonnes – and imports a similar amount from other countries. Now, with imports increasingly coming down, cashew processors are facing a supply shortage.

"Indian processing is heavily dependent on the import of raw cashew nuts from African countries. As African nations now encourage domestic processing of cashew nuts and envisage that 50 per cent of their raw cashew production will be processed domestically by 2025, India’s domestic production will need to be augmented to 2 million MT by 2025 for sustainability," says the Cashew Export Promotion Council of India (CEPCI).

CEPCI has submitted a road map to the central government to achieve the target in three phases. This involves the immediate solution of adopting proper pre-harvest management of the crop through the application of proper manure and irrigation for increasing the domestic production by 15 per cent. An area expansion of 25 per cent over and above the existing plantation of 1 million hectares over the next three years has also been proposed. Replantation of old trees with high-yielding varieties, to be replaced at 20 per cent a year, is another way of increasing production in the country, according to CEPCI.

Based on the estimated yield under the plan, it is expected to achieve a target of 2.14 MT of raw cashew nut production in India, against the estimated demand of 2.19 MT by the year 2025, according to a Mission Plan submitted by CEPCI. This would require cultivation in traditional and non-traditional states, with the approval of Directorate of Cocoa and Cashew Development, support of the State Horticulture Department, and involvement of the Cashew Export Promotion Council of India.

Nizamuddin, secretary of the Federation of Cashew Processors and Exporters, Kerala, said India's capacity was much higher at around 2.5 MT, while the cultivation had been at around 600,000-700,000 tonnes per annum, leaving the rest of the market to be supplied through imports.

CEPCI data show that India accounts for about 25 per cent of the total world production of raw cashew nuts. During 2016-17, its production of raw cashew nut was estimated at 780,000 tonnes. Cashew cultivation is undertaken in 17 states of India covering an area of 1.04 million hectares. India is the largest cashew processor in the world, processing about 1.6 MT raw cashew nut per annum.

The country’s raw cashew processing capacity utilisation at present stands at only about 60 per cent, as the supply of raw cashew is only about 1.5 MT after accounting for both domestic production and imports, according to CEPCI in its Mission Plan in March 2018.

Due to their low processing costs, India's competitors can beat India in the international market by 15 per cent more on raw nut prices. To run the industry in India, the country’s exporters are forced to buy raw nuts at the same prices offered by competitors, incurring heavy losses on exports, CEPCI added.

The domestic production of raw cashew nuts during 2016-17 increased by 16 per cent to 779,335 tonnes, compared with 670,300 MT the previous year. The import of raw cashew decreased 20 per cent during the year to 770,446 tonnes from 958,339 tonnes.

The increase in the domestic production is mainly due to factors like good climatic condition and support from the government, while major reasons for a decrease in imports are the imposition of duty on imported raw cashew nuts and increase in prices, according to CEPCI. By 2020, the projection is to have an area expansion of 250,000 hectares for cashew growing.

Senegal playing rough with Gambia

Gambia: Is Senegal deliberately stifling the Gambian economy- Cashew trade?



The Senegalese Government has decided that it will no longer allow cashew sourced in the Casamance region of Senegal to be transported to The Gambia for shipment through the Banjul Port. This decision was confirmed on the 7th May 2018 by the Senegalese Commerce Minister Mr. Alioune Sarr at a stakeholder’s meeting held in Ziguinchorr attended by the region’s governor, Customs officials, Port operators, security services and private cashew operators.


This decision is a slap in the face of President Barrow’s desire to cultivate a close relationship with our bigger neighbor. It is hardly the best way to help a country emerging from 22 years of challenges by blocking its main economic activities. Firstly, it was the stoppage of the timber trade and now the cashew trade. Heads are spinning at the Gambia Port Authority and Gambia Revenue Authority at the prospect of losing its biggest revenue stream.


Apart from the Government revenue to be lost, this is the time when road transport is at its best, but you only have to visit the Abuko truck garage to see the many parked trucks having no economic activity to be involved in as a result of the decision.


It is bad signs in our relationship that a Gambian company can buy cashew in Cassamance but is not allowed to transport it to Gambia for shipment. What happened to the many signed protocols on free movement of goods and services including the ECOWAS protocols and the recently signed Karang declaration.


The Senegal Government need not put any border closures to force companies to use the Port in Ziguinchor. All it needs to do is to make the port efficient and competitive as business people will always go for efficiency.

3 Lakh people lost jobs in Kerala

Here's Why Nearly 3 Lakh People, Mostly Women, Have Lost Jobs In Kerala

Within a minute of talking to Bindu S, she chokes and holds back her tears, as she speaks. She has been without a job for nearly two years, and has an elderly mother and a son to feed at home. She used to earn at least Rs. 1,500 every week at the nearby cashew processing unit, a skill she mastered in nearly 15 years. But since that unit was shut in 2016, she does odd jobs at people's houses occasionally, to feed her family members. Bindu S is barely 39.

Cashew processing units in Kerala once employed around three lakh people - mostly women - who now have been left without jobs, claim industry insiders. Almost 700 out of 834 cashew processing units - around 84 per cent in Kerala - have shut down in the last two years. Most of these processing units are located in Kollam district - earlier world famous for export of cashew kernels.


Usha Kumari, in her 50s, with her husband bed ridden, speaks to us as her tears trickle down, unstoppable. "It's even difficult to think about rice soup on some nights. I have no support, except this job here. Have tried in other places, but there are no jobs nearby," Usha Kumari says.


Many women have to work odd jobs since the cashew processing unit shut down 2 years ago But it's not just the workers. Owners like Rajesh K, with a 12-year-old daughter, shows us his house which now been possessed by a bank after he defaulted on the loan payment and his processing unit in Kollam was declared a non-performing asset. His wife stands by his side, wiping her tears.


He is not an exception.


"The price of kernels has increased two fold. But the raw nut price has increased five times and are hardly available for procurement. This industry is destroyed," explains Susheelan Pillai, who has a liability of crores pending.


The reasons for the downfall are stark. The cost of raw cashew has steeped globally and in Kerala, lack of mechanisation has added to the woes - a victory for Vietnam which has emerged as a cheaper global alternative.


"From Zero import duty, the central government imposed a 9.36 per cent import duty in 2015. This made the survival of small scale entrepreneurs like us, extremely tough. Currently the import duty is reduced to 2.5 per cent, but even that is very high for us. We have nothing left to pay," says Shashidharan Achary, an entrepreneur who invested his hard earned savings to start a cashew processing unit about 18 years ago.


After Kerala Chief Minister Pinarayi Vijayan's interventions, a temporary moratorium exists on any bank action till May 31. But, with each passing day, fear seems to be rising.


"We have seen the Chief Minister of Kerala, we have met the cashew minister, all the concerned officials in the secretariat. We have given petitions to central commerce minister and Minister of State. But so far nothing has been done," Mr Sashidharan says, demanding a recovery package.


Most of these processing units are located in Kollam district


The state government insists that while it is looking at various options to deal with this crisis, a lot also depends upon banks.


"We can help the existing players to revive their businesses only if banks cooperate with us. For fresh loans, government is in a position to facilitate loans at a lesser interest. A cashew board has been put into place," J Mercykutty Amma, Minister for Fisheries, Harbour Engineering and Cashew Industry, told NDTV.

700 out of 824 factories closed in Kollam

Cashew export council seeks revival package

Kerala’s cashew industry, the sole livelihood of around three lakh rural women, is pinning its hopes on a revival package supported by Central and State governments and banks, to weather the crisis it faces.

Out of the 824 factories, almost 700 are closed down and around 60 businesses already became NPAs. The sector was on a sound footing till 2010-11 but subsequently profitability eroded due to various reasons.

RK Bhoodes, Chairman, Cashew Export Promotion Council of India, cited competition from Vietnam on import of raw cashew nuts, increase in wages by the Kerala government, cut in export incentives, import duty, and surge in import prices of cashew kernels contributed to the slide.

Soaring input costs

According to him, working capital erosion was sparked by an abnormal increase in raw nut price. After 2014-15, processing in Kerala has become unviable and few processors have done partial mechanisation without term loans.


Raw cashewnut price during 2012-13 was 59.75/kg and in 2017-18, it stood at 134.39. In the case of kernels, in 2012-13 the price was at 404.20/kg and in 2017-18, it went up to 696.97.


Considering the increase in processing charges, the production cost has gone up steeply. against the price hike in cashew kernels. The processing charge in Kerala is hovering at 3,200-3,500 for an 80-kg bag, while in other States it is ranging from 2,200-2,400. In Vietnam, it is less than 700-750.


Available bank facilities have not increased inspite of the increased working capital requirements. The situation was more severe during 2017-18, when the raw nut price shot up by 27 per cent against just 8.45 per cent hike in kernel prices during the first three quarters. This has resulted in a sudden financial crunch that led the already ailing industry to an almost full closure, he said.


Since the raw nut procuring capacity is directly proportional to the cash availability, he said the price increase and limited bank facility posed a constraint to small processors for procuring and storing the raw nuts for off season.

African imports

CEPCI suggested that the crisis has to be addressed by framing short-, medium- and long-term solutions. The Indian processing is heavily dependent on imports of raw cashew nuts from African countries. As the African nations encourage domestic processing of cashew nuts and envisage 50 per cent of raw cashew they produce to be processed domestically by 2025, our domestic production has to be augmented to reach 20 lakh tonnes by then. For this, CEPCI has already submitted a roadmap to the government which aims to attain the target in three phases through pre-harvest management, area expansion, re-plantation.

Merely 40% of cashew stock sold in IVC

Less than 40% of cashew stocks sold in Côte d'Ivoire, according to producers

© Other press by DR
Korhogo Inauguration of the headquarters of FENAPACI 
korhogo Inauguration of the headquarters of FENAPACI.Photo: PCA BAMBA ADAMA

Barely 40% of cashew stocks are sold in the 2018 season compared to previous seasons, when 80% to 90% of stocks were already sold, Yamoussoukro said on Saturday. a General Assembly of actors of the sector, the president of the federation of cashew farmers of Ivory Coast, Bamba Adama.

"In terms of loss, it is a lot of money lost," said the chairman of the Administrative Council of the Union of Agricultural Cooperatives of Côte d'Ivoire, Bamba Adama, hoping that the stocks available to producers will be sold.

He explained that Côte d'Ivoire is facing the slump in cashew nuts due to a drop in the price of 500 francs CFA. In Burkina Faso, the price is fixed at 900 CFA francs per kilogram and 1000 CFA francs in Guinea-Bissau, it was learned.

This situation, according to Bamba Adama, encourages product leakage outside the country's borders to Ghana, and represents a shortfall for the State of Côte d'Ivoire, but also for the Ivorian economy. According to statistics, more than 200,000 tons have already left for Ghana.

"It worries us, that's why we actors in the sector, we decided to put together and set up the interprofessional to find the solution," said the farmer.

The General Assembly of cashew industry associations brings together the four families of the cashew sector, namely the producers of the 19 producing regions, the buyers, the exporters and the processors.

"We met and we agreed that only an interprofessional organization is able to be the interlocutor with the authorities so that we can make ourselves heard and explain our problems," said Bamba Adama.

The interprofessional, according to Bamba Adama, will be a tool to help train our producers to the quality of the products, to monitor everything that is done in the field, to prevent products from leaving the country and to reach the country. objective of cashew processing as desired by the State of Côte d'Ivoire.

Côte d'Ivoire is the largest cashew producer with 700 000 tonnes and has about 450 000 producers.

Revival package for Indian cashew industry

Center, state-level revival package proposed for cashew sector-India

In a bid to revive the ailing cashew sector, the Cashew Export Promotion Council of India (CEPCI) has come out with a revival package which proposes short, medium and long-term strategies. The revival package which is based on the two broad plans of reducing the cost of production and increasing the domestic production of raw cashew nuts (RCN) also proposes the package will have to be implemented by both the state and Central governments.

“The abnormal raw nut price increase and limited bank facility have become a constraint for small-scale cashew processors to procure RCN,” said R K Bhoodes, chairman, CEPCI, at a press meet here on Tuesday. “With limited finance decreasing the production, the interest burden of small and medium-level processors has increased substantially and they might finally end up in bankruptcy. If the crisis is unaddressed, it will lead to the total collapse of the industry.”

One of the important demands, pitched by CEPCI in its revival package, was to declare the cashew industry as sick by the state government. While forwarding the suggestion to the state government to conceptualise a new credit guarantee organisation in line with the CGTSME at the Center, CEPCI also demanded the need to send a representation by the state to the Centre asking it to fully withdraw import duty. According to Bhoodes, considering the crisis in the cashew sector, the Central government might have to consider the possibility of announcing a special economic package for the cashew sector. He added the Centre should also weigh the possibility of banning or restricting the import of low-quality cashew kernels. “We will consider the aspect of the handover of the revival package to the Prime Minister, Union Finance and Commerce Ministers and to the Chief Minister in a time-bound manner,” said Bhoodes.

At the same time, in data presented along with the revival package, CEPCI claimed out of the 824 registered factories, 700 had to down its shutters, which further left 2.50 lakh workers jobless. While saying almost 60 entrepreneurs were notified as non-performing assets and the loans of around 100 processors are marked as stressed loans by banks, CEPCI added the workers were also being denied ESI facilities due to lack of working days due to non-operation of factories. The cashew industry is looking towards a meeting on April 27 in which the representatives of various banking institutions, trade union representatives and industrialists will attend.

Vietnam: Season is less fun

Vietnam: Season is less fun

Bu Gia Map Agricultural Cooperative (Bu Gia Map Commune, Bu Gia Map District, Binh Phuoc) was established in 2016. Currently, 132 cooperatives are involved with a total area of 400 hectares. Over the past two years, the performance of Bu Gia Map Agricultural Cooperative has been rather low due to the loss of cashew nut. In particular, the 2017/2018 is even more disappointing, because not only crop loss in productivity, but also quality losses.

According to Tran Thi Yen, director of Bu Gia Map Agriculture Cooperative, the crop of 2017, due to unseasonal rain, pests and diseases, productivity of cooperatives is quite low, reaching only 7-8 quintals per hectare. In the season 2018, the situation is more uncertain as many pests such as stem borer, leaf blight ... raging across the whole area of the cooperative. Despite the attention and support from pest and disease prevention from provinces, districts and communes, but the situation on cashew is still heavy. On the whole of Bu Gia Map commune, about 80-90% of cashew area is pestilent.

Not only that, 2017/2018 termination is quite early. Every year, at the end of April lunar year, new cashew growers prune, fertilize ... for cashew when the cashew on the tree has run out. At the end of February, beginning of March lunar month, many households have to embark on the care of cashew to prepare for the next. Therefore, it is likely that in 2017/2018, the average productivity of Bu Gia Map Agricultural Cooperative can only be about 6 quintals per hectare, only half of normal cases.

Equally worrying is the decline in quality of raw materials. In case of 2016/2017, although the yield is reduced sharply but raw quality is good, when the rate of floating seeds (when in water) is low. This year, the floating rate is too high, up to 40-50%. Therefore, despite the fresh price of 38,000-39,000 VND / kg (the high price), the cashew growers in Bu Gia Map commune sell only for about 28,000-29,000 VND / kg. The price of 38,000-39,000 VND / kg is equal to the recovery rate of 30% or more (when dried), and Bu Gia Map has a much lower recovery rate, so only sell at that price.

Not only in Bu Gia Map Commune, crop failure and sharp decrease in cashew nut quality are common in many localities. Pham Van Nguyen, a cashew expert, said that the rainy season 2017 extends to the beginning of 2018, affecting many areas of cashew growing during the first flowering.

For experienced farmers who have good cashew conditions, they can still maintain their productivity. But many of the current cashew growers are poor households, lack of conditions, and caregiving experience, resulting in heavy productivity. On the other hand, many cashew orchards have been exhausted due to serious pests in 2017, to 2017/2018, flowers, late fruits, but still ends early, also greatly affect productivity thing.

In Binh Phuoc, many cashew orchards produce only one third of their production in 2017. In Binh Phuoc, Lam Dong and Binh Thuan provinces, there are districts that have lost cash crops in the district such as Tanh Linh , Da Te, Da Huoai, Cat Tien, Bu Gia Map ...

Information from processing enterprises also showed a clear decline in both quantity and quality of cashew. According to Mr. Le Nhat Khoa, Deputy Director of Phuc An Production Trading Company Limited (Phuoc Long town, Binh Phuoc province), every year, the recovery rate of Binh Phuoc is an average of 30-32% (drying). In 2017, despite the crop failure in production, the recovery rate is still over 30%. This year, the recovery rate is only 27-28%.

A comforting thing for processing enterprises is the case in Cambodia has signs of season. In the past time, there was a small amount of crude imported from Cambodia to Vietnam. This will help businesses less pressure on raw materials when the import from Africa is still being sold at high levels.

SAMSON'S CASHEW MARKET REPORT - 17 APR 2018

Cashew kernel prices came down significantly during March with some processors selling W320 as low as 4.25 FOB for prompt and nearby shipments. Prices have moved up a few cents during April but still lower than the levels traded during Jan/Feb. Differential between the lowest and highest offer at any given time has widened considerably.

Current range of prices is W240 from US$ 4.75 to 5.00, W320 from US$ 4.40 to 4.85, W450 from US$ 4.35 to 4.60, SW from US$ 4.30 to 4.50, Splits from US$ 4.15 to 4.40 and LP from US$ 3.50 to 3.75 FOB

RCN prices also declined during March - lowest levels were 200-300 dollars lower than the highs of Jan / Feb. Now, prices seem to have bottomed out and there is a slight pick up in the last 2 weeks. Current prices are in the range of US$ 1900 to 1950 for IVC, around US$ 2000 for Ghana, around US$ 2050 for Benin and US$ 1900-2000 for other origins (Burkina, Togo, Conakry etc)

The current RCN prices are lower than the peaks of Nov 2017 - Feb 2018 but higher than the range in which majority of the 2017 crop was traded.

The current kernel prices are lower than the peaks of mid 2017 and near the bottom of the range traded during 2017.

As noted before, RCN prices have moved up about 60-70% in the last 3 years where kernel prices have moved up only 30-35%

Overall, supply of kernels in 2018 is likely to be the same as 2017. Vietnam & Cambodia will have bigger crops than they have had in last 2-3 years but the earlier expectation of huge crops in these 2 origins has been tempered down from 600-650K to about 450 or max 500K. There is some concern about crop in some areas of India. No adverse news from West Africa but kernel yields are certainly lower than normal at this stage of the crop. This is a trend we have been seen for the last few years - African crops are bigger but kernel yields are lower.

Vietnam has been slow in buying in West Africa. One reason is the higher purchases from Tanzania in the last quarter of 2017 coupled with bigger crops in Vietnam & Cambodia. Other is reluctance of processors to pay the very high prices quoted in Feb / early March in the face of slow kernel market. Large processors have been buying in the declining market. In the last couple of weeks, there are signs of more processors starting to buy.

Indian processors have bought reasonable quantities in West Africa mainly because low purchases in East Africa meant stocks were low. They will probably continue to buy if prices remain around current levels.

Kernel buyers have been comfortable with their strategy to buy small quantities for nearby shipments as prices have been coming down. As there is no concern on supply, they have not felt the need to take any large forward covers - especially when the processors are asking significant premiums for deliveries beyond couple of months.

The fact that not much kernel business has been done for second half 2018 shipments is a double edged sword. It means that processors will need to sell at regular intervals to maintain inventory & cash flow levels. It also means that buyers will have to buy at regular intervals to have enough product to deliver to roasters and roasters to retailers. The problem could be if the RCN prices do not come down further (or go up) without an increase in kernel prices 0r kernel activity. Processors would reduce RCN buying and this could result in reduction of conversion & kernel availability for some periods although RCN availability may be okay.

We have seen more than once that cashew market can do what very few expect, BUT Our feeling is that in the coming weeks, RCN prices will stabilise around current levels or move up a bit. If that happens, processors will be forced to increase kernel prices as their margins are already under pressure with current prices. And that may lead to an increase in kernel activity if buyers see the market turning.

Although we do not expect prices to move up too much, we would not be surprised if W320 are trading around the high of the current range. Unless something big happens, downside is limited.

Pankaj N. Sampat

Source: SAMSONS TRADERS

Ghana to stop exporting raw materials – Osafo Marfo

Mr. Yaw Osafo Marfo, Senior Minister, has hinted at plans by government to halt the export of raw materials from Ghana to enrich other economies. “There will be no export of raw materials from this country. Government is determined that we are going to have value addition to our raw materials to create employment for our own people,” he said.

Mr. Marfo said this on Thursday at Batsona during the inauguration of the Tema West Municipal Assembly which was carved out of the Tema Metropolitan Assembly (TMA).

Observing the effects that the exported raw materials has had on Ghana, he said, “We cannot have a situation in which our raw materials are used to create employment for people elsewhere whilst our people live in poverty.”

He said, “We want jobs for our people. The number one problem we have in Ghana today is unemployment, but we always export our raw materials unprocessed for them to process which brings a lot of revenue and create jobs for their people.”

“So government has resolved that it won’t allow the export of these materials without adding value to them here in Ghana”.

He said some countries had such a law, and that the government was currently looking at a draft legislation which would demand that all raw materials in Ghana should be processed before exported.

What Happens to the Cashew Sector If Vietnam Strictly Enforces Import Quota?



At present, Vietnamese initiative to control the import price of global raw cashew has no takers in India.

According to some trade sources, the first goal of a cashew factory is to reach a safe stock level. India needs huge imports at this stage as the summer holiday season is fast approaching. Ramadan month will start from May 15, which is the second highest consumption period in India after Diwali.

But we think that the production cut of 50000-tonne in kernel terms; if strictly regulated will reduce 15-17% in raw cashew imports.

A better harvest also reduces the dependence on costly imports.

So the total reduction in Vietnam’s raw cashew import may be 250000-300000 Tonnes by the year-end. Another addition to this figure is the ‘global level year on year increase’!

Vietnam pause to import Raw cashew nuts due to high prices


According to Dang Hoang Giang, Vice President of Vinacas, the price of raw cashew nuts in Africa has been blown. Specifically, the price of raw cashew nuts increased 30-40% while the price of cashews on the world market increased only about 10-15%. In 2017, the average price of imported raw materials is $ 1,956 / ton, the highest ever.


End-of-season crude prices in Africa are also rising in the first two months of the year. Due to the high price of raw cashew nuts, Vietnamese companies have temporarily stopped importing raw cashew nuts. Indian businesses have also made similar moves. Facing this situation, many forecasts show that, from March 15 onwards, the price of raw African rice will have to drop.


However, Ta Quang Huyen, Chairman of the Board of Hoang Son 1 Co., Ltd. said that even if the price of raw materials has decreased, Vietnamese enterprises do not need to import too much raw as 2017 ( over 1.3 million tons) with just 900,000 tons to 1 million tons.


According to Mr. Huyen, this year, weather conditions are quite favorable for cashew and fruit trees, so it is likely that the cashew in Vietnam will reach a good yield, can reach 400,000 to 500,000 tons. Similarly, the Cambodian cashew has many advantages, which can help Vietnamese cashew producers reduce import pressure from Africa.


Due to the volatile material situation, Vinacas and its member businesses have agreed to increase the quantity, focus on processing and develop the domestic market. Accordingly, the cashew industry targets to export cashew nuts in 2018 to 300,000 tons, instead of 362,700 tons as in 2017. This corresponds to a turnover of $ 3 billion in 2018, lower than 3.62 billion dollars compared with the previous year.


Setting up "reverse" as above may cause the agency to be dissatisfied. However, "In addition to reducing the price of raw materials to buy a reasonable level of about $ 1,800 / ton, the industry is no longer reducing prices. Therefore, if trying to increase export turnover in 2018 to $ 4 billion by purchasing materials at high prices as of 2017, the business only left a loss. In fact, we can not affect the selling price of cashew kernel depends on the market demand, "said Nguyen Duc Thanh, chairman of Vinacas.


In order to shorten supply and demand for raw materials for processing, Vinacas is cooperating with the Cambodian Ministry of Agriculture, Forestry and Fisheries to develop raw material areas, aiming to increase output to 1 million tons in the next 10 years. /.

Kerala: Private cashew processors stare at huge losses


With around 400 cashew factories in Kollam district remaining closed due to a variety of reasons including high operational costs leading to accumulating losses, small scale private cashew processors are at the receiving end. Many cashew processors are now facing revenue recovery procedures from the banks due to default in mortgage payments. Recently, a cashew processor who incurred a huge loss from his factory was on the verge of suicide and was saved at the nick of time.


A cashew processing unit owner hailing from Chandanathoppe in Kollam attempted suicide as he face revenue recovery threats for his debt to the tune of Rs 7.5 crore from the Karnataka Bank. Five factories under his company Alfana cashews remain shut for more than a year now, which was a source of livelihood to some 800 employees. Another processor from Randam Kutty in Kollam having a default of Rs 4.5 crore has been served with revenue recovery notice asking to repay the money within a month’s time from the Corporation Bank.


“Several cashew factories are on the verge of revenue recovery proceedings owing to the financial crisis they are in. The industry is not at all profitable in Kerala when compared to neighbouring states. For processing a bag of 80 kg cashew here, it will cost nearly `2,000 more than other states like Tamil Nadu, Karnataka, and Andhra Pradesh. The government should immediately intervene by announcing financial packages modelled on other industries,” said I. Nisamudeen, secretary of federation of cashew processors and exporters.


The private owners are also denied sufficient time to repay dues as the debt is listed as a non-performing asset (NPA) soon after the completion of 90 days of non-payment. At present, the banks charge an interest rate of 9%-12% from the processors which could be included as a financial package with the intervention of the government. Proper repayment schedule in long term and availability of new working capital from banks could save the sinking industry.

Vietnam’s path to become world cashew king

A worker examines cashew nut after preliminary processing (Photo: SGGP)

Vietnam has overcome India, the world’s largest and long standing cashew nut processing and export nation for 12 years, and now continues leaving the country far behind to become the new capital of the world’s cashew processing industry.

Nearly a decade ago, the cashew processing industry took shape in India and its city Kollam became the world’s cashew capital. By the end of the 1990s, India including Kollam entered the most golden phase, exporting 97,000 tons of cashew a year accounting for 80 percent of the world’s total processing output.

After 1975, Vietnam started exporting raw cashew nut. The country’s cashew processing industry started to toddle in early 1980s when the Government encouraged businesses to export peeled instead of raw cashew nuts.

Since the Government encouragement the industry had begun to become one of the most earners and recruited most unskilled workers, contributing to create jobs for rural laborers.

However after industrial zones were set up in many provinces and cities especially in the southeast region, which was considered as the capital of Vietnam’s cashew industry, garment and textile field started developing and became the most attractive industry to laborers.

Workers gradually left cashew peeling plants for garment and textile companies. The situation put the cashew industry in front of a decisive turning point to invest in machines and equipment to replace the scarce laborers.

A group of engineers from HCMC Export Farm Produce Company led by Mr. Nguyen Van Lang, who is considered to be the father of the Vietnam’s cashew processing industry afterwards, started studying a technology to cut cashew nut shells and grained initial successes in 1984.

The technology’s price accounts for only 10 percent of import items. However, Mr. Lang and the group was just able to transfer the technology to businesses in Song Be province (Binh Duong and Binh Phuoc provinces now), and Long An province until the end of the 1980s under the huge pressure from laborer scarcity.

Ten years later, up to 60 plants used the technology which was continued being popularized later on. The technology has taken Vietnam from a raw cashew nuts exporter to become one of leading nations in exporting peeled product.

Spectacular change

Workers at a cashew nut processing plant (Photo: SGGP)

Statistics from Vietnam Cashew Association (Vinacas) show that Vietnam started exporting cashew nut to China in 1992 and the US in 1994. Two years later, the country began importing raw cashew nuts from Africa to process and terminated export of raw cashew nuts to India.

From 2002 to 2003, the Vietnam’s cashew industry posted development leaps to become the world’s second largest cashew production, processing and export nation. In 2006, the country outstripped India to become the world’s top exporter.

Year of 2007 witnessed a strong change in technical investment structure and cashew processing technology especially in the phase of automatic shelling which Vinacas continued improving in 2009 and 2010. Vietnam obtained the export turnover of $1 billion for the first time in 2010.

From only a group of Mr. Lang studying cashew processing technology initially, there were as many as 13 domestic mechanical engineering companies attended an equipment showcasing event organized by Vinacas in Binh Duong province in 2012. They comprise Khuong Viet, Anco Viet, Son Viet, My Anh An , Phuc Thang, Gia Loi, Tien Loc Phat, Viet Le Nguyen and Thanh Son.

Over 80 percent of equipment at cashew processing plants have been made by domestic firms. That is the result of national program KC07 implemented in 2006-2010 to study applications and develop technologies for industrialization and modernization.

The entire of 13 phases in cashew processing have been fully or partly mechanized, reducing nearly 80 percent workers.

Nearly 500 international businesses attended the cashew conferences in Vietnam to learn about business opportunities in the end of 2017,

Early December 2017, The Wall Street Journal published the article “How Cashews Explain Globalization,” saying that today Vietnam is the cashew king thanks to an ingenious push to automate the business. Kollam is reeling, a victim of misguided government protectionism and its own unwillingness to adapt to the realities of the freewheeling global economy.