Nigeria can make $5bn from cashew with value addition
01 May 2017 Stories by Steve Agbota | firstname.lastname@example.org | 08033302331
Cashew nut tree, one of the economic trees that have the potential to create enormous wealth for farmers across the country and generate huge foreign exchange for government, has not been given deserving attention despite having capacity to generate about $5 billion annually in the next 10 years.
Due to lack of value addition and Nigeria’s inability to process cashew nuts in significant quantities for export, the country lost $1.4 billion in 2016. The amount, which could have gone into government coffers and turned the life of farmers around, was wasted.
According to data from the National Cashew Association of Nigeria (NCAN), Nigeria exported a total of 160,000 metric tonnes of cashew valued at $300 million in 2016. This was far behind what farmers and exporters could have earned assuming there were processing factories that could process cashew nuts for export standard.
The cash crop (cashew), which is an important industrial and export crop whose potential is yet to be fully exploited in Nigeria, is said to provide livelihood for over 300,000 families and has created 600, 0000 jobs.
Historically, in the 1980s, Vietnam’s cashew production was in the same level with Nigeria’s production. In the early 1990s, Vietnam began processing its cashew and 16 years later, the country had become the largest processor and exporter of cashew kernels in the world and by 2013, Vietnam already earned $1.8 billion from cashew kernel export to over 80 countries. Currently, India’s cashew exports amount to over $2.5 billion and Vietnam generates as much as $3 billion each year, mainly from processed kernel.
However, the Nigerian cashew industry is suffering from declining productivity and dwindling export earnings, thus making the commodity less competitive in the international market, compared with other African countries like Gabon, Cote d’Ivoire, Benin Republic and Ghana.
Recently, Minister of Agriculture and Rural Development, Audu Ogbeh, said Nigeria would start exporting processed cashew nuts by 2019, adding that currently a tonne of processed cashew nuts, when exported, is sold for $10,000 while the raw cashew nuts are sold at $1,200.
He explained: “It would be beneficial to process the nuts and export rather than exporting the nuts raw. So in the next two years, we will no longer export raw cashew nuts, but roast the cashew nuts for export.”
But industry watchers countered the claims made by the Minister, saying that government talks too much but does little in terms of action. They said the Minister should put in place a master plan that will ensure that exporting processed cashew nuts by 2019 is feasible.
Daily Sun investigation shows that in Nigeria, cashew grows successfully in virtually all agro-ecological zones including the semi-arid areas but with high concentration in the middle belt areas in smallholder farms and plantations. Cashew production comes from over 28 states including Kogi, Kwara, Oyo, Edo, Ondo, Benue, Cross River, among others.
Speaking with Daily Sun, a cashew exports expert/Managing Director of Universal Quest Limited, Sotonye Anga, said for the industry to be galvanised, strengthened, restructured and better positioned, it requires at least a N100 billion intervention fund to put the industry in top shape. He said a minimum of N20 billion will help.
Anga said the industry needs to be intensified to drive growth of industry, which will attract investors, saying priority must be given to cashew processing to ensure that Nigeria’s cashew processing capacity becomes competitive.
He added: “When you are processing cashew, you know that you are processing a global product that will be consumed globally. So issues of quality become very critical, which means that there is need to deploy the right kind of technology to deliver high quality value added cashew. The equipment for processing will cost money because they are not produced locally; they have to be imported. We need to ensure we have right machinery to process cashew and build the right infrastructure.
“In capacity building, we need to be able to put in place the training school for cashew processors. You need semiskilled workers that will handle the operations of cashew processing and currently, because there is no training school, individual cashew processors would have to train their workers. You know, when you invest so much money to train these workers and for any reason, they go to work somewhere else, you lose them and you have to retrain again and keep retraining,” he added.
Anga, who is also the National Publicity Secretary of NCAN, said one way forward would be for government to establish and maybe fund the training school so that Nigeria can be able to consistently produce semiskilled manpower that would be able to handle cashew processing.
So with this, he said, there would be a pool of workers that can be directed into any cashew processing factory that will be established anywhere in the country to handle different aspects of cashew processing.
Said he: “More so, it is one thing to have cashew processing factory, it is another thing to have adequate materials to service the factory and for a processor to stockpile 2,000 metric tonnes of cashew, which is an average. It requires a lot of money that runs into over millions of naira. How will the average cashew processor be able to finance the whole stock, which is a very big issue because you are more or less tying down capital for a long term? Because you will have the cashew during the season, you have to keep it in your warehouse and process it gradually all through the year, which is another very high cost center.”
He said cashew processors would need finance to get raw materials so as to process consistently. According to him, this is where the bank comes in to be able to provide the kind of financing that will enable processors to hold stock to be able to process all year round.
The NCAN National Publicity Secretary said if the cashew industry is taken seriously, Nigeria would be able to generate a lot more money from cashew processing and more people would have access to high value cashew to be consumed both locally and internationally.
He explained that any form of incentive government gives to cashew processors would help to reduce total cost of production and processing and help the cashew processor to be more competitive globally.
Coupled with all the challenges facing cashew processors such as electricity, transportation/bad roads, high cost of labour, lack of finance, among others, he said there was need for stakeholders to sit down and determine the workable and working incentive that will be available for players to be able to grow the industry, which is for the good of the nation.
Speaking on earning capacity for cashew, he said looking at utilising the whole cashew and making foreign exchange earning from them across board and the different byproducts of cashew such as cashew kernel, cashew apple juice, and process the different parts of cashew, by turning the industry to a money making machine, which will be able the country to achieve the $5 billion. Source: https://www.nigeriatoday.ng/2017/05/nigeria-can-make-5bn-from-cashew-with-value-addition/