Cashew, originally grown in much of West Africa for reforestation and to prevent soil erosion, continues cultivating export and earnings potential for the region.
ImageLast year, seven West African countries Benin, Burkina Faso, Cote d'Ivoire, Ghana, Guinea-Bissau, Nigeria and Senegal produced over 450,000 metric tons, almost a third of the world's cashew crop (1.65 million tons), and that percentage is rising. As the region assumes new status as a major supplier of raw cashews, investors and industry players are eyeing cashew processing in West Africa as an opportunity to create jobs, income and a value-added product.
West Africa ships the bulk of its raw cashews to India and Vietnam for cracking, peeling, grading and packaging. From there, it is exported to destination markets where it is roasted, salted and packed for retail around the world, particularly to the U.S., the largest consumer of cashews.
Last year, raw cashew exports brought nearly $300 million in export revenues to the region. But processing locally would add an average $350 to each MT, increasing the value to West Africa by 50 per cent, while creating tens of thousands of jobs. Challenges remain from unfavourable legislation in some countries to difficulty in getting competitive financing but the advantages of processing are becoming more widely apparent in the region.
Industry experts said the timing is right for West Africa to invest in processing. As the economies of India and Vietnam diversify and stabilise, other industries, like garments, shoes and toys, will lure workers away from cashew. Labour costs will also rise.
For processing to truly take hold in West Africa, industry sources said, governments must demonstrate support through incentives to help balance high start-up costs, as well as more flexible labour laws. Some West African countries are already on the right track: Nigeria, for example, gives tax credits for processed cashew exports. If the region can take advantage of the moment to process its surging supply, the market will be there, industry sources said.