Cashew is seasonal fruit that is highly sought after in the Nigerian Market as well as the global market. The species is originally native to the North Eastern Brazil. Major production of cashews occurs in Vietnam, Nigeria, India and Ivory Coast. The Cashew nut is eaten on its own, used in recipes or processed into Cashew cheese or butter. The cashew apple can be processed into a sweet fruit drink or distilled into liquor.
Driven by the rise in demand from china, India and other fast-growing economies, the global cashew boom has generated profits, the business has been of instant success for investors in the cashew business, as investors now worth millions of dollars in annual revenue, and with the world price rising and expected to remain steady, life is changing for those ready to invest in the business.
The cashew Industry has been a growing business over the years in Nigeria in particular. Cashew Production for 2015 was 160,000 tonnes, and fetched 57.6 billion naira revenue. In 2016, we exported 185,000 tonnes and earned 259 million dollars (93.2 billion naira). Last year 2017, 220,000 tonnes was exported and earned 123 billion naira, which means that the value continues to row over the years. But with this still, the demands is yet still more than the supply, this just implies a lot of room and opportunities for investments in this cashew business.
Investing in Cashew Nut business is one of the most lucrative investments you can make. The reason is not far- fetched. Nigeria is one of the largest producers of cashew in the world. It implies that you already have access to the essential commodity. In addition to this, the cashew industry has a high potential for growth, with cashew tree having the ability to last at least 50 years. There is a lot of money to be made if you invest in the cashew nut business.
The National Cashew Association of Nigeria (NCAN) has stated that Nigeria will generate a turnover of about ?N1 trillion in the next 10 years, noting however that necessary support and encouragement from regulators would make the target achievable.
The association also said Nigeria must promote cashew business and unlock financing for the sector for it to thrive. National Publicity Secretary and Chief Executive Officer (CEO), Universal Quest Nigeria, Mr. Sotonye Anga, who spoke on behalf of the group stated that the cashew industry requires a financing to the tune of N50 billion to boost production, processing and marketing. He said there was a need for value addition in the nation’s cashew industry to create more jobs for unemployed young people, diversify the economy and earn foreign exchange.
Anga who spoke at the export platform business luncheon tagged: “Multibillion N?aira Cashew industry”, stressed that exporting raw cashew, also exports job opportunities, stressing the need for the nation to reverse this trend.
“Let us not forget that Africa is the center of the cashew world, producing over 40 per cent of 2.6 million tons of the world’s cashew nuts with Nigeria standing as one of the largest cashew producers in the continent alongside Ivory Coast, Guinea Bissau, Tanzania, Ghana, Kenya, Mozambique and recently Mali,” he said. “The time to add value to our cashew and thereby create more jobs for our unemployed young people, reduce unemployment, diversify our economy, reduce the pressure on our Naira, stimulate economic growth? and get a bigger share of the cashew dollar is now,” he added.
According to him, $1.8 billion per annum in Naira is an equivalent of N351 billion from just cashew alone, noting that it is as a matter of urgency for Nigeria to have a paradigm shift to look away from petrol dollar to cashew dollar. He also stated that developing and investing in Nigeria’s cashew industry offers a straight route from poverty to financial freedom and prosperity for thousands of families. “Today, cashew is a major foreign exchange earner for Nigeria and thus listed as a transformational crop in the Agricultural Transformation Agenda (ATA) of the federal government of Nigeria,” he said. He pointed out that the nation’s annual production of raw cashew nuts now stands at 144,000 tones, stressing that in the last 9 years, cashew prices in Nigeria had increased by 266.7 per cent. Furthermore, he advised that Nigeria needs to consolidate its place in the cashew world by increasing its cashew production and processing, considering the growth in demand for cashew globally and the rising ?consumer appetite for the crop. “As we allocate more land for cashew cultivation, our major focus should be to increase our national average in terms of yield per hectare which is around 400kg to 600 kg per hectare to at least 1,000 to 1500 kg per hectare. He said as a result of this, there was the need to establish a national cashew seed program, improve farm level productivity by planting improved disease-resistant high-yielding cashew seedlings, rejuvenate old cashew farms and organize capacity building programs for cashew farmers.
Nearly 42% of the global cashew crop is produced by about 2.5 million small farmers in Africa. The vast majorities of these farmers live in rural areas and struggle to make as little as € 90 to € 330 per year through the production of cashews. Such low incomes result from a number of factors, including low yields, poor quality nuts and a lack of business skills. Cashew farmers in Africa rarely organize themselves into associations, which lead to a weak bargaining position with dealers.
They are also insufficiently linked to international markets, primarily because of the poor quality of their product. Adding to the problem is the fact that less than 5% of African raw cashew production undergoes further processing in Africa, leaving a tremendous opportunity for poverty reduction and job creation largely untapped.
“If the value chain for cashew nuts in Africa were well-organized, according to our calculations the industry would have accounted for US$ 1.9 billion in 2013.” Roger Brou is Managing Director at the African Cashew Alliance, an industrial platform whose goal is to promote the African cashew industry.
Such is the potential of the African cashew market. Africa produces 42% of the estimated 2.6 million tons of raw cashews every year. Of this, it exports 90% to the rest of the world, retaining the rest for domestic produce. In the recent past, while most of the efforts were aimed at improving farm level productivity through seed programs, replantation and rejuvenation, training and capacity building on farm management practices etc., a lot has also been done on reforming markets and revitalizing institutional infrastructure too. Tanzania, through the Cashew Board of Tanzania, has put in place a robust warehouse receipt based auction system to ensure quality nuts get fair price and small-holder farmers are not discriminated against. This has been working very well. Further, the Cashew Board of Tanzania is going ahead with establishment of three processing plants under public-private partnership model with the involvement of producer cooperative and government. Like-wise, Cote d’Ivoire, through its regulatory body, the Cotton and Cashew Council (CCC), sealed raw cashew movement through the land route and restricted raw cashew exports only through Abidjan and San Padro ports to bring in accountability. Besides, it fixed a minimum price for raw cashew for 2014 season and ensured farmers do not sell below it. Cote d’Ivoire with its significant production volume thus brought in necessary discipline in the raw cashew trade and exports. Simultaneously, CCC have started engaging with Vietnam at government to government to level to get access to Vietnam cashew processing technology into Cote d’Ivoire in exchange for assured supply of raw cashews to Vietnam. Cote d’Ivoire is largely replicating its successful model of cocoa in cashew. These are just two examples. The gist is every major raw cashew producer is evolving its own model to add value to raw cashew and in the process generate employment and wealth for the nation. Organizations such as ACA and ACi along with its partners are enabling and hastening this transition. Africa undoubtedly is the most happening place for cashew and rightfully, this decade belongs to African mammoth cashew industry.
In recent times, the focus of the African development Bank has been how it will invest billions of dollars to improve the field of agriculture in Africa. How it will empower more farmers, create economic opportunities and wealth creation. The wave is roaring across Africa.
Also, here in Nigeria, President Buhari just recently made public his agenda to make the agriculture sector, which Nigeria was once known as the powerhouse, become highly relevant and once again a major economy driver.
In ten years’ time, big-time farmers will ride Lamborghinis and drink coffee with the richest men on this planet. That is not difficult to know? Is it? Because by 2030 the world population is expected to increase by 40%, that’s about 2-3 billion more people that will need to eat. Here comes the biggest opportunity for the “Smart” farmers to tap into that opportunity.
Agriculture is the last frontier, and Big-time farming is the key. Africa has the best land and climatic factors which are basic to excellent agriculture.
Cashew nuts investment is like no other considering the potential in it and the economic opportunities tied to it. There are more than enough reasons why you need to invest in cashew precisely.
High Demand/Low Supply
During cashew seasons foreigners, especially from India, bombards the streets of Ogbomosho with millions of dollars seeking local cashew nut dealers to trade with and also plotting for ways to maintain a direct link with local farmers. The supply has never been enough in respect to how high the demand for cashew has been in the last few years. Now, most of them, individual and in groups are tired of low supply, now acquiring lands to start their own plantations too. According to research, in respect to the demand-supply scenario presently, there is no amount of cashew that will be produced in the next five years that will be enough for the market. What an opportunity!
Read what was said concerning cashew at a national meeting in Abuja:
“The time to add value to our cashew and thereby create more jobs for our unemployed young people, diversify our economy, reduce the pressure on our Naira, stimulate economic growth,? and get a bigger share of the cashew dollar is now.”
“$1.8 billion per annum in Naira is an equivalent of N351 billion from just cashew alone, noting that it is as a matter of urgency for Nigeria to have a paradigm shift to look away from petrol dollar to cashew dollar.”
“Today, cashew is a major foreign exchange earner for Nigeria and thus listed as a transformational crop in the Agricultural Transformation Agenda (ATA) of the Federal Government of Nigeria.”
You’ll never know that Cashew is this important to NIGERIA!
Nigeria’s Vantage Point of the Best Farmlands
In terms of land mass, Nigeria’s total land area is 92.4million hectares. Of this area 91 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up areas. The UN’s Food and Agriculture Organization (FOA) said by year 2050, world’s population will rise to 9 billion, and to satisfy global food demands, food production for developing countries like Nigeria, will need to increase by 70 percent.
Nigeria currently ranks sixth worldwide and first in Africa in farm output, and it’s one of the unique countries where cashew grows in almost all its states in sizeable quantities. Cashew is produced in commercial quantities in 15 of the 36 States in Nigeria, across its South Eastern, South Western and North Central regions. Not all other crops can thrive everywhere like that. It’s quite easy to say cashew loves the Nigerian soil. So, take advantage of that!
Nigeria, Africa’s largest economy, is projected to expand 4.9 percent this year, according to the Bloomberg survey and it’s one of the top-ranking, fasted developing nations in the world alongside Kenya in Africa. In a nation where population is expected to reach 250million in less than a decade, food insecurity has been a rampaging menace and more than half the population still lives below the poverty level.
To improve the menace, cashew nuts have taken root, even heralded by the federal government as a veritable investment opportunity that can generate enormous wealth for individuals, institutions, and the nation at large. In fact, the cashew nut has been listed as a transformational crop in the Agricultural Transformation Agenda (ATA) of the Federal Government of Nigeria. In lieu of that, the focus on cashew nuts as a potent economic booster cannot be underemphasized. It’s a great investment.
General global demand for Cashew Nuts
Cashew is a major product for millions of majorly small-scale farmers. The annual production worldwide is about 2.1 million tons of raw nuts (RCN) with an estimated value of US$ 1.5 -2 billion. The main cashew production regions are Africa, India, Vietnam and Brazil. Africa is the world second largest producer.
The world cashew demand is growing strongly in terms of volume and value. Prospects are that world demand for cashew will continue to increase rapidly. Main buyers from US and Europe, but also India, Vietnam and Brazil will have to source from Africa because Currently 40% of the cashew world production of Raw Cashew Nuts (RCN) is produced in Africa.
The interest in the sources for the African continent have intensified in the past 2-3 years, major actors from India, Vietnam, China, Brazil and Europe are investigating the opportunities to invest with a new focus towards large scale mechanized processing.
There is a growing interest in the major production area, Africa.
Ease of Management
Not so difficult to manage that even a dummy can be taught how to do it! Cashew has no serious disease that afflicts it, been one of the crops with an extremely high resistance to diseases. That considerably reduces or eliminates expenses that could have been used on herbicides and pesticides. In a nut shell, Cashew farm is not one of those farms that you have sleepless nights of worrying over. The only real threat is fire outbreak, and that can be taken care of through adequate security measures.
With cashew, you can intercrop other crops like cucumber, soya, water melon, etc. which can generate enough revenue as high as, or even more than the invested capital. Weeding cost can also be considerably reduced through inter-cropping.
Many would argue that revenue from cashew comes after a long time. The point is, is 3 years a long time? Such argument is not real for a smart farmer. With intercropping, a farmers start to make money as fast as four months after planting in the short term and that can always be repeated over and over again.
The Ogbomosho Advantage
Ogbomosho has the best land for cashew and produces the best quality cashew nuts in the country. Everybody knows that. If you have a cashew farm in a place like Ogbomosho, you can always be happy that you are in for very high quality produces that make your investment highly profitable. You will make more money than other investors in other places. The quality of Nigeria cashew nuts, measured in KOR, is between 42-54 KOR (KOR = Nut Counts) Ogbomosho cashew nuts have the highest. Recently, a kilo in Ogbomosho sold for 220,000 naira per ton (around $1,250), while it was much lesser in other states. The higher the Nut Counts (KOR), the higher the value and worth of the Raw Cashew nuts (RCN), the more the profits!
From production waste alone which is as a result of low quality nuts, the country loses a whopping $50m (N2.9bn) in export earnings yearly due to the rejection of poor quality nuts popularly referred to as “export rejects.”
Derivative Business Opportunities
There are further investment opportunities in cashew nuts which includes processing and exporting. Anybody can do it under the right conditions.
Africa is the second largest cashew producing continent in the world, but from all the cashew nuts, about 40% of the world total production, only 10% gets processed (shelling and peeling) in cashew kernels in Africa. The rest gets processed in mainly India and Vietnam followed by Brazil. Therefore a lot of value in the value chain gets lost for Africa.
According to a representative of African processor association, processing of cashew nuts in Africa has the potential to add U.S$2.8Billion every year and the employment of more than 275,000 people in factories.
The competitive disadvantage of Africa as far as processing is concerned, will change at the moment the mechanization is implemented.
The industry’s potential productive capacity is estimated at N200bn yearly. While the estimated worth of local consumption is not known, the country is only realizing N23bn from exports. This leaves a difference of N177bn in annual losses due to lack of value addition and poor processing. This shortcoming has opened up opportunities for investment in cashew nuts farm plantations and what to do with the nuts thereafter: processing, or exporting.