Forty years ago, Henri Kouakou
was struggling to support his family farming a small plot outside Bondoukou, a
dusty town in northeastern Côte d’Ivoire, when he first learned that money did,
in fact, grow on trees – cashew trees.
“I was raising yams back then and
wasn’t earning enough. I heard people talking about a new tree you could make
money growing,” he said, strolling through his plantation beneath a canopy of
cashew tree branches.
By his own reckoning, Kouakou,
among the earliest pioneers of the Ivorian cashew sector, is nearly 100 years
old. He has seen the nuts, initially planted in the 1970s to combat
desertification, emerge as an important cash crop for the West African nation’s
And with output growing by over
10 percent annually – attracting the attention of a government desperate to
jump-start its economy after a decade of war and political chaos – he will
likely live to see his country dominate the world market.
Even a decade ago, Côte d’Ivoire
was a middling producer, growing around 80 000 tons of raw cashews per year. By
last season, however, as demand for the nuts has grown, output had jumped to
around a half million tons, making it the world’s top exporter and second to
India in overall production.
In the north of the country,
cotton and cashews are the only cash crops, so as some cashew growers have
started to do well, others have piled in. Output has increased because new
plantations planted in recent years are coming into production.
“The growth is more than
impressive. It’s astounding,” said Jim Fitzpatrick, a cashew expert. “We’ve
never seen a country grow its production in the way Côte d’Ivoire has over the
This season, for the first time,
the government set a guaranteed minimum price for cashew farmers, fixing it at
250 CFA francs ($0.48) per kilo of raw nuts. According to Malamine Sanogo,
managing director of the sector’s marketing board, the Cotton and Cashew Council
(CCA), Côte d’Ivoire has hardly scratched the surface of the enormous
Ninety-five percent of Ivorian
output is exported raw to India and Vietnam for processing. Sanogo says that
work should be done in Côte d’Ivoire by Ivorian workers.
“We think that with processing we
will create many jobs and we will create lots of added value for the country,”
Within the next five years, the
CCA wants 35 percent of Côte d’Ivoire’s raw cashew output processed locally.
Sanogo said bringing processors closer to producers will allow Côte d’Ivoire to
cut out some of the intermediaries in the supply chain, boost prices for
farmers, and above all create jobs.
Having doubled production over
the past decade, Africa’s two million cashew farmers produce nearly half of the
world’s supply of raw nuts, according to the African Cashew Alliance. Many,
including growers in top African producers Guinea-Bissau, Nigeria and
Mozambique, are watching closely Côte d’Ivoire’s efforts to become a major
player in a global market valued at up to $7.8 billion.
In 2002, a failed coup attempt
plunged Côte d’Ivoire into a civil war that split the world’s top cocoa
producer in two. Once a model of stability and prosperity in a troubled
region,Côte d’Ivoire would remain divided between rebels in the north and southern
government loyalists for almost a decade.
Having emerged as the country’s
new president following a civil war in 2011, Alassane Ouattara, a former senior
International Monetary Fund official, has ushered in economic growth of over 9
percent in past two years.
But little of that growth –
fuelled largely by billion-dollar investments in large infrastructure projects
– has trickled down to the nearly half of Ivorians living on less than $2 per
day. That’s where the government hopes cashews can help.
Some 600 000 farmers already grow
the nuts, according to the CCA. But the creation of a domestic processing
industry would mean more jobs in the sector.
dvocates of the plan point to the
giant cottage industry in India where a typical unit processes around 10 tons
of cashews a day with a workforce of 1000.
According to a study carried out
by the CCA, every 100 000 tons of processing capacity Côte d’Ivoire develops
will create 12 300 factory jobs and another 10 000 elsewhere in the sector.
On the spotless campus of the
large processing factory run by Singapore-based soft commodities trader Olam
International in the central city of Bouake, uniformed employees queue up every
morning for work.
The plant and a second, smaller
facility, employ around 3 500 workers with capacity to process 40 000 tons.
“You can imagine if we can
process 10 times this number how much employment can be created. And that is
only direct employment,” Issa Konate, Olam’s head of procurement for the
facilities, told Reuters.
Panacea for unemployment
If it can pull it off, Côte
d’Ivoire would be the first African nation to build a large-scale cashew nut
processing sector as a panacea for unemployment, a problem plaguing countries
across the continent.
The African Cashew Alliance estimates
that a 25 percent increase in raw cashew nut processing in Africa would
generate more than $100 million in household income.
But Ouattara’s government has an
additional, even more pressing, concern: creating gainful employment for the
74,000 ex-combatants it is seeking to demobilise in the coming year.
“That’s what happened in
Vietnam,” Yao Appia Koffi, vice-president of Côte d’Ivoire’s Cashew Exporters
Association. “When they were emerging from their war in the 1980s they
developed that industry and it allowed a lot of ex-fighters to find work.”
Not everyone is so starry-eyed,
however. “Processing? I’m not sure what the government can do … It’s
foolishness,” one Côte d’Ivoire-based cashew exporter said, asking not to be named.
Côte d’Ivoire indeed faces some daunting obstacles.
In addition to competing with
processing sectors in India and Vietnam, it must convince private sector
partners that political stability will last. It also needs major investments in
machinery and must train tens of thousands of new workers.
But its biggest challenge will be
what to do about nuts damaged in processing – what the industry calls brokens –
which typically constitute 30 to 40 percent of output.
In India, the world’s largest
cashew producer and also the biggest consumer, brokens are absorbed by the
domestic market. The same is true in Brazil, the number three processor.
Vietnam has traditionally sold much of its brokens in India and has another big
market for damaged nuts, China, next door.
Côte d’Ivoire, with only
infinitesimal domestic consumption, has none of these options, and its less
skilled workforce means that the portion of brokens is even higher there.
Promoting cashew consumption in
Côte d’Ivoire and neighbouring countries is one possibility. But even
supporters of this strategy admit it will take time with no guarantee of
Côte d’Ivoire’s cashew sector may
just have come of age at the perfect time. Experts say investors, worried by
the dominance of India and Vietnam, are showing interest in diversifying supply
and Africa is a logical choice for new processing facilities.
From just 35 000 tons in 2006,
Africa processed a total of 114 600 tons of raw cashew nuts in 2012.
At the same time, manufacturers
say technological advances in processing equipment will reduce the number of
brokens to between 10 and 20 percent. Even the definition of what constitutes
an exportable nut appears to be changing.
Only last year, the difference in
the price of a pound of export quality, whole kernel cashews and large brokens
was around $2. That difference is now less than a dollar.
“If that trend persists it will
create a big change in the economics of processing,” said Fitzpatrick, who
works with the African Cashew Initiative, United Nations, European governments
and private investors to develop cashew processing in Africa.
Demand for edible nuts is
growing, but the supply of pristine nuts is not. So it appears that buyers are
willing to buy more, and pay more for, brokens.
Back in Bondoukou, Henri Kouakou
is cautiously optimistic. He’s long been at the mercy of volatile, unregulated
prices. Not far from his plantation stands a sprawling compound he started
building for his family but has never been able to finish.
“If the government could raise
the price to 400 or 450 CFA francs I would retire right now. I would be at home
with enough money to eat and feed my entire family.” (1 US dollar = 517.9300