African Cashew Alliance

The November 2008 issue of CommodityIndia's magazine on commodity intelligence features an interview with ACA President Carlos Costa.  He answers questions on the main conclusions of the September ACA Annual Conference, explains benefits of the cashew industry to Africa and describes his vision for the African cashew sector.

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Value addition through processing and kernel marketing
is the way to go

Cashew nut, the prime nut among all tree nuts, is a major crop in Africanfarm sector. Mr. Carlos Costa, President, African Cashew Alliance (ACA), shares his views with Ms. Meena on the essence of the third annualconference of the ACA, which was held in Dar es Salaam, Tanzania during 17and 18, September, ‘08. Here are the excerpts…

What were the major conclusions arrived at the cashew conference recently held at Dar Es Salaam, Tanzania?

The main theme of the conference was “Cashew - the ultimate source for African economic development and poverty reduction”. Kindly brief how many Africans get benefited through cashew industry?

About 39% of worldwide production of raw cashew nuts come from Africa. Africa can achieve approximately 750,000 tons of raw cashew nut production. It is estimated that there are around 1.5 million cashew farmers (90% are smallholders
with 0.5-4 ha) in Africa and Africa’s biggest producer is Cote d’Ivoire (200,000-250,000 tons). These figures could easily translate into around 7.5 million people getting benefited taking in account that the average household has 5 members. Processing of around 60,000 tons of raw nuts is said to create about 18,000-20,000 jobs. By exporting 690,000 tons of raw nuts will create at least near half a million of seasonal jobs related to logistics and trading.

Though Africa is the leading producer of cashew, they are lagging behind in processing front, so what measures are you suggesting to reap the benefit of value addition?

Indeed African processing is lagging behind, 87% of African cashew is exported in raw form. A concerted effort in investing into processing, improving farmer productivity and marketing cashew can double farmer income. Processing about 650,000 tons of raw cashews (which was exported in 2007) would create 1,000 new businesses, 250,000 new jobs and more than 150 million dollars additional revenue for Africa. This is a huge task and implies the existence of a solid institutional framework in each country. Each country has to work on its own strategy benefiting from the experiences of others.
A number of activities have to take place in a coordinated way such as, just to name a few, to focus on farm production– R&D, better farm practices, good post harvest practices. Promote local processing- link farmers and farmers associations to local processing facilities. Create the required investment climate to make the African cashew processing viable. Further, there is a need to promote local and regional consumption.

Give your views on the prospects before the major cashew-processing countries such as India, Vietnam and Brazil? To which country do you have easy market access and why?

India has a long tradition of trading cashew raw nuts with Africa and furthermore seems to have a more flexible position in what relates to protection measures for the sub-sector. While Brazil and Vietnam are a bit more closed, applying some measures to protect their cashew business. But naturally the African countries want to add value to their primary products so trading raw nuts with other countries will suffer a gradual decrease. However, other kind of business relations can and will be explored such as creating joint ventures with firms controlling markets and other international stakeholders to take advantages of the specific experience from each country within the value chain. It is believed that India will increasingly become a market for cashews as well. While productivity in production and processing is still higher in India and Vietnam when compared with Africa, some argue that their processing industries have no long-term prospects. The industry in Kerala, India for example, is facing some problems, because operations are getting too expensive (salaries and other costs). The services and electronics industry are attractive alternatives in these countries.

Will Africa join hands with the aforesaid countries in the Global Cashew Alliance for the betterment of cashew stakeholders in your countries?

Yes, in many ways cashew alliance is a win-win proposition. Cashew processors need partners overseas and at home to become a considerable economic and political force, processors have an interest in down streaming value to the farmers.
The cashew production and processing process is so complex and the learning potential from cooperation and experimentation is huge. In doing this, we will exchange experiences with India, Brazil and Vietnam.

Do you (ACA) have any vision or target for 2010 or 2020 for African cashew sector?

Yes, we are planning to foster the processing in our countries gradually to process more than 60% of raw cashew nuts within this period and like to increase dramatically our share in the international kernel market. The quantified targets will need some homework, but the intention is also to explore sub-products like CNSL, and from the false fruit. We will establish in some of our countries strong Research Institutes on Cashew to further develop the whole potential of cashew business or if it fits better creating an African Institute of Research and Development for African nuts.