Global Demand and Agro-Processing of Cashew Nuts in Africa
Africa leads the way in cashew production, producing 45% or 1.2 million tons of cashew nuts every year. Despite Africa’s control on the raw cashew market, the small-scale farmers who produce the product experience limited benefits. Fortunately, the growing demand for cashew nuts presents an opportunity to increase farmer incomes and create more jobs in Africa.
Raw cashew product largely originates from Africa, yet 90% of the jobs in the processing industry are located elsewhere. By not processing cashews at a significant scale, African producers are missing out on capitalizing off of a booming cashew demand. Increasing capacity for Africans to process cashews will bring greater overall wealth to their local communities rather than increasing profits for outside actors.
When cashews are deshelled, value is added. Less than 15% of African cashews are deshelled in Africa. In fact, 85% of the world’s cashews are deshelled in Asia; India and Vietnam also account for 98% of global raw cashew imports. Value can also be added when the shelled nut is roasted, salted, and packaged. These additional processes largely occur in North America and Europe. The World Bank estimates that the resulting loss of added value for Africans is around $200 million.
Raw production occurs in mostly rural, poor African areas. By placing processing facilities besides initial production sites, there would likely be a reduction in poverty for the estimated 3 million smallholder farmers in Africa. Governments, trade, groups, and larger buyers are focusing on increasing farmer productivity through promoting sustainable agriculture, distributing higher yield seedlings, and improving market access and traceability, in addition to mechanization.
Lack of processing capacity may present issues for other African commodities as well. KDHI’s next couple posts will dive into the state of agro-processing in Africa’s coconut and sesame seed markets while drawing attention to similarities between the markets.