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The
Clipper magazine, the most widely read fruit and nut industry magazine
with a worldwide distribution in over 90 countries, wrote a report on
the African Cashew Alliance's third annual conference...
 clipper_4_2008 344.44 Kb
The „African Dream“ arouses confidence and scepticism
By Jens-Axel Breuer, The Clipper, Munich
Welcome to the African Dream! Kees Blokland from Global Trading in the Netherlands had included this
sentence in his presentation in bold type. It was clear to all those taking part in the annual conference of
the African Cashew Alliance (ACA) in Dar es Salaam, Tanzania, that there would still be a long way to
go until the dream comes true. The first signs of
progress in this direction are already discernible. The third annual conference of the African Cashew Alliance
took place in Dar es Salaam from 17 to 19 September, with 140 participants from Africa and a few international
visitors. Three years ago, there were only about forty taking part. From Costco as the discount buyer to Kraft Foods as
the processor and the Bill & Melinda Gates Foundation as the large-scale investor, skeptical voices as well as confident
ones were to be heard. On the second day, solutions in the field of cultivation, processing, politics and financing were
elaborated and presented.
Kees Blokland from Global Trading knows only too well that
cashew nuts are still being produced in Africa and exported
to Brazil, India and Vietnam as comparatively cheap raw materials.
The result is that the African market loses a large part of the profit margin as well as its control
over the market. What can change and
what will have to change in Africa?
Production is increasing in Africa
First the good news: production is on the rise in Africa. The sector is recovering
again after the slump in the seventies. Vietnam and West Africa together ensure
an increase in the worldwide production of cashew nuts of 7% per year. In India
and Brazil, production is growing much more slowly, and production in East
Africa is suffering from excessive age of the trees. 40% of the worldwide production
of cashew nuts is currently accounted for by Africa. In terms of quantities, it
amounted to 140,000 t in 1998, and a total of 240,000 t are forecast for 2010.
The next piece of good news: the chances for a considerable increase in the consumption
of cashew nuts are very good indeed: Francisco
Pileggi presented a study made by Kraft Foods. Here are the results:
Cashew nuts are the most popular variety of nuts with consumers, even before almonds and other varieties.
The most cashews are consumed by people over 40, so the demographic development of the human race speaks clearly
in favour of cashew nuts. Up to now, cashew nuts have sold with virtually no research
into the health benefits. Better research and marketing with the focus on the health aspects of these
nuts would allow consumption to be increased considerably.
Money in sight?
And here‘s yet another piece of good news: the Bill & Melinda Gates Foundation
is planning a gigantic programme for the development of the African sector.
The representative of the foundation declared that a decision on this matter is
expected to be made by the end of October. On the one hand this proves that the
Foundation, which acts with great foresight, has realized that it is worthwhile to
invest in the sector. The commitment of the richest foundation in the world also
gives reason to hope that this planned investment will have good results in the
years to come. It is thus still the case that cashew nuts are produced in Africa
and that the great majority of them are exported in the raw state to India, Brazil or Southeast Asia. In 2006, 587,000 t
of cashew nuts were produced in Africa, but only 43,000 t were processed there – whereas in India, 270,000 t cashews
were produced and 825,000 t of them were processed. The producers realize that this means that they will lose a large
part of the potential income. Up to now, for every kg of cashew kernels, a sum of US$ 1.57 has remained in Africa.
If Africa completes its production chain, an average of up to US$ 4.51 could be earned in Africa – 255% more at the
same yields as before.
Instead of a few rich cashew planters, there are
a lot of poor ones
You can earn a lot of money with cashew nuts – but not necessarily in the production of the raw produce. More money
is made in India because the yields are higher - six times as high as in Benin in fact. In addition, more whole nuts are
harvested, and more ‚white‘ kernels are left over. According to the calculations made by the Bill
& Melinda Gates Foundation, African producers could earn up to 103% more on their harvests,
but only by increasing productivity, direct sales and the use of seals of approval.
Whereas farmers in Benin are still on average harvesting more than one tonne per year, farmers in
Mozambique don‘t produce more than 74 kg per year. The fragmentation is a logistical challenge
– and instead of a few rich cashew farmers there are a lot of poor ones whose options for pre-financing
pesticides and equipment are negligible.
A head start for African dealers and
processors
A.M. Beno Mhagama from the Cashewnut Board of Tanzania put it in a nutshell: „Cashew nuts are
produced by very poor people – and consumed by very rich ones,“ he explained. For him, the
production of cashew nuts in Africa is its greatest
potential but also its greatest challenge, with expensive pesticides, underpaid producers, expensive
credits and the present production chain, which is not continuous yet. Up to 100,000 t of cashew
nuts could be processed instead of the current total of no more than 30,000 t. At interest rates of 15% and more for
the producers, many are working under pressure from the
banks Mhagama believes that the principal challenge is the
professionalization of the industry: there is a lack of reliable
data on harvest quantities as well as producer and world market prices, and there is a lack of coordination on the
part of the processors. It was suggested that a time corridor should be created which only allows bids to be made
by African processors and dealers in the first month after harvesting.
Francisco Pileggi from Kraft Foods presented important data
from trend research – and an extremely hopeful outlook for the sector. He very impressively proved that only firstclass
produce can profit from these positive effects. Why has
the consumption of cashew nuts only increased so little over the last few years whereas the growth rates for almonds and
pistachios exceed 10%? According to Pileggi, this is mainly a result of the intensive work carried out by the Almond
Board of California. The Board has done a lot of research into the health aspects of almonds and communicated its
findings accordingly. Pileggi believes that health as a marketing factor is the best instrument for future success – and
that includes cashews.
Is India worried about Africa‘s industry coming
of age?
Hari Nair from the Western India Cashew Co., Quilon, is not worried. In fact, he is confident that African producers
and Indian companies will continue to cooperate in future. India assumes that African cashew nuts will be
processed in India in the future too.
Also, India is glad about the massive
growth of domestic production
and the increase in the domestic
consumption: the
development of cashew production
in India is impressive, going from
50,000 t in the year 1980 to more
than 600,000 t in
2007. Nevertheless, this increase is
having difficulties keeping up with
the development of the demand on
the domestic market, for the spending
power of the Indian population is increasing – and so is its ability to buy cashew nuts, which can be found everywhere
in India and are used as gifts, cooking ingredients and sweets.
More manual work or less of it?
Until a few years ago, there was no alternative to the manual shelling of the cashews. In Africa, the shelling of
cashew nuts is considered as a job creator and therefore welcomed. Things are different in India: 400 man-days
of hard work are necessary in order to shell a tonne of cashew nuts. This makes the cashew nut one of the most
labour-intensive agricultural products in the world. This was not a problem as long as workers were available for
no more than two dollars a day. However, the positive
economic development in India is causing wages to rise. Hari Nair explained that an objective of 40-80 man-days
of work per tonne of cashew nuts is being aimed at for the future.
„The Ultimate Source“ – that‘s what it said in big letters on
the banner of the annual conference of the African Cashew Alliance. All those taking part in the annual conference realized
that the development in Africa is moving forward constantly. In other words, we can still expect a lot of encouraging
news from Africa.
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