Nigeria: Foreign buyers want Nigerian cashew as drought hits Vietnam
13 November 2016
By Josephine Okojie
Foreign buyers are requesting to buy cashew nuts from Nigerian farmers as Vietnam, the world’s largest exporter of the produce, suffers its worst drought in a century.
The drought in Vietnam has caused a reduction in their cashew exports by 11 percent, creating a market for cashew nuts from other countries. “The demand for cashew has gone up. A lot of foreigners are calling and asking for our cashew currently, and this is why the price has gone up,” said Zacheaus Egbewusi, chief executive officer, Agri Commodity Inspection Limited. “Cashew is being sold for N450, 000 per metric ton. It was sold for between N370, 000 and N390, 000 per metric ton a month ago, an increase of 15.4 percent. A total of 150,000 metric tons of cashew, valued at $ 253 million was exported by Nigeria in 2015, according to data obtained from the National Cashew Association of Nigeria (NCAN).
Nigeria’s cashew is usually harvested between January-June, though farmers stock the crop and export it all year round. “When there is a decline in Vietnam’s production and export of cashew nuts, there is going to be a surge in the demand for Nigerian cashew and this will make the country experience the highest price regime of the crop, most especially in 2017,” said Anga Sotonye, chief executive officer, Universal Quest Limited. “We are monitoring what is happening in Vietnam and expecting prices to go up by 100 percent. Cashew farmers are well positioned for this boom,” said Sotonye, who is also a cashew farmer with 200,000 cashew trees under cultivation.
Sotonye projects that the country’s cashew export for 2017 is going to increase significantly, as newer plantations are expected to start harvesting. He also stated that Nigeria exports more than 80 percent of the cashew produced in the country.
Cashew can be grown in the entire South-West, South-South and South-East region, with Enugu, Oyo, Anambra, Osun and Kogi having the largest production areas. Cashew trees usually are grown commercially in places where they can get a lot of rain and warm weather all year round. But over the past year, an unusual dry spell has left two million people in Vietnam with acute water shortages and 18 of 63 provinces were in a state of emergency as of May 2016, according to the Food and Agriculture Organisation (FAO).
Vietnam, the world’s largest cashew exporter, accounts for 58 percent of global export and 15 percent of production in 2014. Vietnam ranks third in global production of cashew behind India and Ivory Coast, stakeholders say.
According to Tola Faseru, president,National Cashew Association of Nigeria (NCAN), Nigeria’s cashew production is expected to yield 500,000 metric tonnes by 2020, up from a yield of 160,000 metric tonnes in 2015. Faseru said the country is expected to record an increase in cashew production in the coming years due to renewed focus by government. He further observed that the government is planning to put up about two million new cashew trees.
Nigeria is rated as the fourth largest producer of cashew nuts in Africa and sixth in the world, with the bulk of its raw cashew nuts and cashew kernels exported to Vietnam and India, respectively. “Prices are already increasing due to high demand and we are expecting bumper harvest next year when we start harvesting between January and February,” said Ademola Michael, a cashew farmer in Ogun State. “Cashew farmers are really happy with the current price and we believe it is going to further increase in coming months,” Michael added.
Despite Nigeria’s economic numbers showing recession, the agricultural sector grew by 13.2 percent in the second half of 2016. Global cashew consumption in 2014, the most-recent data available, reached a record 716,682 metric tons, up from 469,241 tons in 2010.