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Overview of the cashew industry in Benin African Cashew Alliance (ACA) Benin country meeting September 2006



• • • • • •

Volumes Farmers Farming practices Productivity / outturn Associations Pricing and trade of raw nuts • Quality


• • • • • •

Volumes Supply Main players Processing practices Productivity Pricing and trade of kernels

Logistics Financing Policy

Trade / Marketing

• • • • • • •

Volumes Geographies Main players Branding Pricing and trade Packaging Quality

Production /1 • Cashew production growth in the last 15 years: 40-50% a year (see chart)

Export of Raw Cashew from Benin (MT) 60 50

• Now the second largest agricultural export after cotton


• One of top 10 producers globally


chart, grayed areas)

• Over 30,000 farmers, or 90% of those in the producing areas


10 0

19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05

• Most of Benin apt for cultivation of cashew (see

Produced elsewhere Produced in Benin

• Small average farm size at 1-2ha • Low productivity per tree at 2-3 kilo/tree, vs. up to 10 in India, largely due to irregular spacing and young trees • Avg cashew-related income at approx. $180 yearly, sometimes up to half of the total net income for the farmer Source: ONS, Brook Adam (Peace Corps)



Borgou Collines


Production /2 • Largely unmonitored and unplanned production; little or no inputs • Existing farmers associations, primarily led by NGOs; however, lacking resources and common strategies • Large networks of agents, sub-traders and speculators substituting officially registered Beninese agricultural traders as intermediaries; hence risk to leave raw cashew unsold (2,500MT in 2006) and no reward quality at farmgate • Highly reputed quality of the Beninese raw cashew, hence higher than average prices • Producers not benefiting fully from better quality as inflow from neighboring countries (10-20% of total) drags quality and prices down • Farmgate prices tend to be set globally, however they vary very significantly, ranging from 320 to 650 USD/MT in the last 3 years • Due global to production increasing faster than demand, esp. in Vietnam, this year prices are lower at 320/480 USD/MT • Minimal transparency of prices at farmgate • By products such as cashew apple and shells are not exploited Source: ONS; Brook Adam (Peace Corps)

Processing • Cashew processing in Benin (SEPT and SONAFEL) not capturing its potential • Processing still a marginal activity in Benin, with some 97% of raw cashew being exported • Benin as one of the most promising country for cashew processing globally, thanks to its high quality and generally low costs • New realities have started in the last 3-4 years (details below): • The Pride of Benin group sells directly to the end-consumer, currently mostly in Benin, while Afokantan will sell to Global Trading, its business partner, a Dutch trading company • Small semi-industrial activities also exist, such as Boulamb, selling locally Processor

Year Est.

Capacity (MT)

Processed (MT) 05 06



Marketing Dest


Pride of Benin





Savalou, Glazoué, Bantè, Tcharou



100 % (Currently)

Afokantan Benin Cashews









Source: Brook Adam (Peace Corps), WATH cashew study

Trade / Marketing Raw nuts

Other 23%


• 95-97% exported to India • 4 players leading the market (see chart) • Registered intermediaries negotiating both at local markets and at farmgate • Growing role of unregistered speculators, adding liquidity, but jeopardizing balances • Pre-financing is common place at all stages Cashew kernels • Afokantan to Global Trading • Members of Pride of Benin sell on the local market; umbrella brand targeted to international markets but never operating • Boulamb packages and distributes in Benin • Artisan / Women’s groups also active Source: Brook Adam (Peace Corps)

AgroBe nin 11% Sakson 16%

OLAM 24%

Logistics: flow of goods Farm Local end market


Local market



Int’l trader

Foreign end market

• Complex, expensive, very mediated flows of goods, lacking transparency • Most of the volume as: farm > market > trader > international trader > distributor > foreign market • Producers and end users completely detached as a consequence

Financing Access to finance

Traditional banks



Only larger 510%

Farmer associations

Ad hoc / privileged funds

Need for credit

Need for new financial solutions

Mostly in urban No areas















Only larger, registered ones





• Few financial solutions for industry players • Pre-financing as a common solution to spread risk, increasing financial complexity • Development of the industry requiring innovative credit opportunities, especially, but not only, for producers and processors • New solutions to be financially sustainable for lenders, but institutional incentives are possible

Policy /1: many institutional players • Research – INRAB-PRF: Institut national des recherches agricoles du Bénin - Programme de Recherches Forestières – PTAA: Programme Technologie Agricole et Alimentaire – PAPA: Programme Analyse de la Politique Agricole – PPAB: Programme de Professionnalisation de l’Agriculture au Bénin • Regulatory – DPQC: Directeur de la Promotion de la Qualité et du Conditionnement des Produits Agricoles – CIFP: Commission Interministériel de Fixation des Pris des produits agricoles et intrants – SONAPRA: Societe Nationale pour la Promotion Agricole – CNEX: Counsel Nationale pour l’Exportation – CARDER: Centre d’Action Régional pour le Développement Rural – DEDRAS: Département du Développement Rural et d’Assistance Sociale • Civil Society – PADSE: Programme d’Amélioration et de Diversification des Systèmes d’Exploitation – PAMRAD: Projet d'Appui au Monde Rural dans l'Atacora et la Donga – Oxfam Quebec – UEEB: Union des Eglises Evangéliques du Bénin – CASPA: Composante d’Appui au Secteur Privé Agricole – SNV: Netherlands Development Organisation – GTZ: Deutsche Gesellscraft für Technische Zusammenarbeit (German Development Agency)

Policy /2



• No institutional incentives to create farmer associations

• No incentives • Industrial minimum wage

• Bottom price set by CIFP, in consultation with stakeholders

• Currently institutions intervene on the industry by: – Setting price – Limiting trading entities – Taxing exports and sales • No institutional incentives to operate or grow • SONAPRA to acquire significant role in the future

Trade / Marketing • Raw cashew traded only by registered Beninese traders (only country forbidding foreign traders buying directly from farmers) • Tax on export: 0.8% • Tax on sale: depending on volume

Conclusions • The cashew nut industry in Benin is growing fast and has many attractive features

• However, a number of problems remain, calling for a coordinated effort

• Some key themes: – Lack of transparency at farmgate / detachment of producers from end users – Role of informal trade / inflow of foreign nuts – Marginal role of farmers associations – Processing of raw nuts: marginal, but profitable and growing – Institutional incentives for production and processing – Lack of appropriate financial services – Need for an entity coordinating the industry (role of SONAPRA) – Little or no coordination with other African countries / the possible role of the African Cashew Alliance

Benin country overview cashews ENG  

Benin country overview cashews ENG

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