Commodity Spotlight: Cashew
Commodity spotlight is designed to provide background information about commodities like Rice, Maize, Cashew and Sorghum produced and consumed in West Africa.
Overview
Cashew is a high value cash-crop known for its vast variation of uses and byproducts such as a kidney-shaped seed known as Cashew nut. Its tree is a fast thriving multiple-use tree extending across all parts of the tropics, native to north-east Brazil but today it is grown in many areas in the world.
India and Vietnam are the two largest single producers of cashew nuts, and the main suppliers of the world and European market however Africa is the epicenter of the tree as three of the biggest exporters including Côte d’Ivoire, Tanzania and Nigeria come from the West and East African coasts.
Economics
About 2.5 million small farmers in Africa produces over 60% of the estimated 4.9 million metric tons of raw cashew globally. The major cashew nut producing countries in Africa are Nigeria, Ghana, Gambia, Mali, Côte d’Ivoire, Tanzania, Mozambique, Madagascar and Benin although less than 10% of the raw cashew produced in the region is processed locally which explains why countries like India, Vietnam depend on the region for cashew supply given their huge processing capacity.
Vietnam’s heavy dependence on RCN from Africa is primarily because she is the second largest processor of raw cashew and the largest exporter of cashew kernel worldwide with a current processing capacity that exceeds 1.2 million MT. However, India is the biggest cashews consumers in the world with a consumption rate of 0.503 pounds per capita.
In West Africa, according to a recent report by National Cashew Association, Nigeria earned $402 million from 220,000 metric tonnes of raw export to Vietnam, India and China between February and December 2017 and the production rose by 100,000 metric tonnes in 2011 to 175,000 metric tonnes in 2017, a 43% increase with a market value of $1,800 per metric tonne, as against the previous $300 per metric tonne making Nigeria the fourth largest producer of cashew in the world. This is a huge pointer to the humongous potentials in Nigeria for Cashew traders.
In 2016, cashew nut demand increased by 6.1% and in 2021, it is expected that cashews take over 29% of the global nut market. Whether the production volume growth can meet the increasing demand is quite uncertain.
Farming and Production
Cashew is produced in around 32 countries of the world and in Nigeria, cashew is produced in Abia, Abuja FCT, Enugu, Imo, Kaduna, Kwara, Kogi, Niger, and Oyo States.
After planting, most cashew trees start bearing fruit in the third or fourth year, and are likely to reach their mature yield by the seventh year if conditions are favorable. The average yield of nuts of a mature tree is in the range of 7–11 kg per annum. The cashew nut yields for the traditional tree are about 450 kg/ha, in contrast to over 1 MT/ha for the dwarf variety. Grafting and other modern tree management technologies are used to further improve and sustain cashew nut yields in commercial orchards.
Consumption
Cashew can either be eaten as a fruit or processed into cashew butter and cheese. The cashew pulp can also be distilled into liquor or even processed into fruit drink just as the cashew shell can be used in a wide range of applications such as in paints and lubricants.
The raw cashew nut is the main commercial product of the cashew tree. Unlike the cashew fruit which can be eaten when plucked, the nut can’t be eaten unless after being roasted, it contains a toxin which can only be destroyed by smoke or fire. Raw nuts are either exported or processed prior to export. Processing of raw nut yields kernel, shell and husk.
Three main cashew products are traded in international market — raw nuts, cashew kernels and cashew nut shell liquid (CNSL). The fourth product — the cashew apple is generally processed and consumed locally.
Cashew kernels are consumed in the form of snacks and used in confectionery. Shell is used for manufacture of particle boards for packaging industry. Presence of CNSL in the shell makes these boards’ moth and heat resistant.
Processing of the raw nuts releases by-product called Cashew Nut Shell Liquid (CNSL) that has industrial and medicinal applications. This liquid is used in friction dusts, varnishes, laminating resins, cashew cements, polymers, surfactants, foundry chemicals and intermediates of chemical industry.
Commodity Update
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