A fundamental problem of the
country’s cashew sector is the absence of a regulatory framework and body to
manage, control and sustainably grow the sector, the Cashew Industry
Association of Ghana has said.According to the association, it
is essential that a legally constituted body is established, whilst a
sustainable funding mechanism is put in place, alongside a well designed and
implemented long term cashew development plan.Mr. Aaron Akyea, Executive
Secretary of the association told the B&FT that demand for cashew nuts
continues to rise in all major markets across the world, a reason the country
needs to up its game.
Private sector actors in the
industry are hopeful a draft policy which is being fine-tuned, “when fully
implemented will be an opportunity and serve as a guideline for industry
players and members to use the document.”While raw nuts production in the
country continues to rise through a natural rate of increase, it is not
adequate to meet the 10% yearly increase in global demand for raw nuts.But cashew production in the
country is not adequate to meet the needs of processing factories across the
country and for export.
A 10-year cashew master plan
seeks to increase production from the estimated 70,000 metric tons obtained in
2015 to 150,000 metric tons over the next 10 years and increase access to raw
cashew nuts for local processing.The plan also seeks to intensify
investments in research and development and establish nursery infrastructure to
produce over five million improved planting materials for cultivation within
five years.It is further aimed at
facilitating the expansion of raw cashew nuts processing from 4,400 metric
tonnes to 56,000 metric tonnes by 2020 to yield about 11,000 metric tonnes of
kernels to earn about US$71 million.
The cashew business environment
in the country has improved considerably over the last decade. Production figures
have improved from 15,000 metric tonnes to about 50,000metric tonnes in 2013.Current yield per hectre has
increased to almost one metric tonnes with the demand for raw nuts continuing
to grow steadily all over the world, thereby creating ready markets and
improving in farm-gate prices.Good agricultural practices for
cashew, including improved planting materials, have been developed and are
available to support the growth of the industry.
Installed processing capacity in
the country has also increased to about 60,000mt over the last decade and
continues to attract huge investments.There are also a number of
functional farmer associations, processing companies and traders linked to the
industry. All these entities have triggered numerous job opportunities along
the entire value chain.Additionally, the impact of the
cashew on poverty reduction and the environment in the savanna regions has been
significant, with farm hands and pickers at the production levels.
Thousands of rural employment
opportunities are created at the processing factories sited in the rural areas,
with over 80 percent of them being woman.The cashew industry in the
country currently boasts of 13 processing companies with a total installed
capacity of 65,000 metric tonnes.There are two large ones, a
medium-sized one, whilst the rest are small-sized. These companies process
kernels for export, while the bulk of secondary processing takes place around
There are 21 kernel roasting
companies operating in different parts of the country. Out of the number, 17
are located in the Greater Accra Region, three in the Brong-Ahafo Region and
one in the Eastern Region.The producers do not use all of
the market channels available within the country effectively. As a result,
products do not reach all potential points of sale, and potential buyers or
sellers such as the hotels are underserved.
While cashew producers have
enjoyed exceptionally high prices for their produce, reaching 79 percent of the
Fright on Board value of cashew exports in 2015, the down-stream processing
portion of the cashew value-chain has recently suffered.
In 2015, only one of the
country’s 13 processors was operational. The critical challenge facing the
survival of this industry is that of access to raw cashew nuts supplies
necessary for production.
Following the closure of
land-border trade in raw cashew nut from Cote d’Ivoire, fierce competition
within Ghana for raw cashew nut, in particular from exporters on behalf of
foreign traders, has outcompeted most local processors from the market.
Challenges facing the sector
There are however numerous but
surmountable hurdles that need to be addressed for an expansion programme to be
The challenges range from
research to processing and marketing. These challenges constrict the expansion
and profitability of the sector.
Planting materials are inferior,
management of farms are generally poor, trading of raw nuts is disorganized and
Most exports are originating from
neighboring countries, processors are reeling from exorbitant raw cashew nut
prices that have killed many plants, local consumption is low and there is
limited value addition to cashew by-products such as the apples and cashew nut
shell liquid, which reduces the profitability of the industry as a whole.
The gestation period for cashew
is about three years and it takes five to six years to reach break-even point
where it becomes a profitable venture.
Farmers, both small and large
scale, are looking for suitable longer-term credit facilities. This is a
challenge to local banks that shy away from the extended risks, especially in
agriculture. Profitability improves with inter-cropping of food stables like
maize, yams, etc.
New and more productivity
planting materials and farming methods should be disseminated and made
available to all cashew farmers to improve productivity.
Value addition is still limited
and should be encouraged to a point where Ghana processes all its current and
future raw cashew nut production. Processing is capital intensive and
entrepreneurs in the sector seek suitable and adequate financing. Profitable
by-products such as cashew apple and are virtually going to waste.
Even though farming and
processing has a huge potential for employment creation, high processing cost
has pushed the industry to consider high levels of mechanization to substitute
This trajectory, however, has a
trade-off – mechanization produces less whole kernels (the premium products)
but the international market is adjusting to and accepting the new mechanized