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10 Reasons Why You Must Invest In Cashew Nuts

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!

Revenue Capacity

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!

Investment platform

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.

Inter-cropping

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.

 

 

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