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Global cashew market and Opportunities for Nigeria Cashew Seminar Lokoja, Nigeria 10 & 11 July 2007 Cilia de Cock African Cashew Alliance Secretariat West Africa Trade Hub – USAID funded


World production of cashews 2005 Origin

Production IMP/EXP Production (MT ‘000) (MT ‘000) (‘000 ctn)

Domestic (‘000 ctn)

Export (‘000 ctn)

South (Sept-Jan) of Prev. Yr

Brazil E. Africa

245 165

0 (140)

2,450 250

(200) 0

2,250 250

Indonesia+Comb

115

(110)

50

0

50

India Vietnam

360 300

580 85

9,400 3,850

(4,000) (40)

5,400 3,810

W. Africa

425

(415)

100

0

100

1,610

0

16,100

odia, odia, Thailand

North Feb-June

TOTAL

(4,240) 11,860


….and in 2006 Origin

Production IMP/EXP Production Domestic Export (MT ‘000) (MT ‘000) (‘000 ctn) (‘000 ctn) (‘000 ctn)

South (Sept-Jan) of Prev. Yr

Brazil E. Africa

250 150

0 (140)

2,500 100

(400) 0

2,100 100

95

(90)

50

0

50

India Vietnam

410 325

580 90

9,900 4,250

(4,900) (50)

5,000 4,200

W. Africa

445

(440)

50

0

50

1,675

0

Indonesia + North (Feb-Jun)

TOTAL

16,850 (5,350) 11,500


2007 Production Outlook 

No major weather issues



Brazil • Larger and earlier than last season • Excellent quality and kernel size



Vietnam • Larger and earlier than last season • Quality improved



Balance of producing areas report “normal” crops with some increases


Expectations for 2007 Origin

Production IMP/EXP Production (MT ‘000) (MT ‘000) (‘000 ctn)

Domestic (‘000 ctn)

Export (‘000 ctn

South (Sept-Jan) of Prev. Yr

Brazil E. Africa

300 155

0 (140)

3,000 150

(420) 0

2,580 150

Indonesia +

115

(110)

50

0

50

India Vietnam

475 350

610 100

10,850 3,850

(4,900) (50)

5,950 3,800

W. Africa

465

(460)

50

0

50

1,720

0

16,150

North Feb-June

TOTAL

(5370) 12,580


Plantings suggest 50% increase over 5 years PRODUCTION FORECAST (Trade EstimatesEstimates-Round Figures)

India Brazil Vietnam Other Asia Africa TOTAL Equiv Kernels

2005 400,000

Share 24

2010 700,000

Share 28

250,000 350,000

15 21

350,000 600,000

14 24

75,000 600,000

04 36

150,000 700,000

06 28

1,675,000 16.75

STC KAJU INDIA 2006 – Sept ‘06

2,500,000 25.00 mil ctns


Consumer markets Indian Cashew Exports 70 60

1,000 MT

50 40 30 20 10 0 2002

2003

2004 Others

Europe

2005 N.A.

2006


N.A. continues to be the major user..... World Cashew Usage Asia / Other 21% North America 50%

Europe 29% Source: Trade


African cashew industry 

Production in two seasons: • East Africa (with Brazil): Sept-Jan • West Africa (with India & Vietnam): Jan – June





>2.6 mln cashew producers with average plantation of 1-3 ha Yield of 2-4kg per tree vs 10-20 kg per tree in India/Vietnam plantations


Production per country Country

MT production

Cote d’Ivoire

200,000

Guinea Bissau

100,000

Tanzania

100,000

Nigeria

75,000

Mozambique

65,000

Benin

45,000

Senegal

15,000

Togo

5,000

Ghana

15,000

Kenya

5,000

Burkina

5,000

Mali

3,000

Guinea - C

3,000


Factors at the national level that influence raw nut prices at farm level    

Taxes Port charges Freights Transport costs • from country to warehouse • from warehouse to the port



Nr of actors in the value chain • In Guinea Bissau farmers receives 40% of FOB price, in Cote d’Ivoire and Benin 50% and in Tanzania 60%.


Comparison of costs freight

avg

fobbing

per 20' - $/ton

freight

cost

Guinea Bissau

95 to 120

107.5

57

82.5

247

Nigeria

45 to 50

47.5

40

0

87.5

Ivory Coast

55 to 70

62.5

40

31

134

Benin

55 to 60

57.5

33

0

90.5

Ghana

45 to 50

47.5

25

0

72.5

Senegal (Zig)

95 to 100

97.5

36

0

134

Senegal (Gambia)

95 to 100

97.5

68

0

166

Gambia

95 to 100

97.5

21

10.5

129

Assumed with 1USD = 500 f cfa

tax

total


International factors that influence pricing 

Quality • • • •



  

KOR, nut count Packaging Humidity (drying, packaging, storing) Peelability

International kernel price – consumption levels (reputation of cashew & health) Exchange level USD – cfa Freight & port Increasing level of production world wide


KOR and Nut count 

Kernel Outturn Ratio: • Number of pounds of nutmeat/kernels per 80 kg of raw nuts (range from 43 (low) to 54 (high)



Nut count • Number of whole cashews per kg of kernels (high number: small nuts, low number: large nuts)


Kernel prices WW320 – high/low 3.5 3 2.5 high

2

low

1.5 1 0.5 2005

2004

2003

2002

2001

2000

1999

1997

1996

0 1993

FOB India USD/pound

Cashew Prices 1993-2005


USD/CFA exchange rate 2001- 2007 CFA/USD Exchange rate 2001-2007

20 07

20 06

20 05

20 04

20 03

USD/CFA

20 02

20 01

800 700 600 500 400 300 200 100 0

The USD has lost +/- 30% of its value in the last 5 years 350 cfa per kg of raw nuts in 2002 with same conditions is 245 cfa per kg today because of exchange rate


Raw Cashew Prices USD/MT FOB 1999/00 Benin

965

Burkina Faso

2000/01

2001/02

2002/03

848

523

599

827

643

625

Gambia

1071

887

539

688

Ghana

934

800

476

619

Guinea

1007

1999-2000: good kernel prices and exchange rate.

620

Guinea Bissau

1155

1040

572

757

2001-2003:

Indonesia

1063

888

673

671

944

817

505

579

Kenya

1068

715

621

599

kernel prices drop and in 2003 USD loses value

Mozambique

1041

651

554

547

Nigeria

809

642

412

470

Senegal

1143

737

518

701

Tanzania

1216

758

603

665

Ivory Coast


Being competitive: best practices  

Organization of supply Quality • drying of all nuts (humidity < 8.50%) • no mix with old stocks • Packing in jute bags



Competitive shipping lines (freight) and port services/charges


Processing Processing (domestic)

Country

Processing (export)

Mozambique

25,000

Nigeria

16,000

Tanzania

15,000

Kenya

5,000

Cote dâ&#x20AC;&#x2122;Ivoire

5,000

500

Guinea Bissau

2,500

500

Benin

1,500

80

Burkina

900

Ghana

500

2,500

80

Senegal

150

Togo

80

Mali Guinea Conakry Total

71,400

3,860


Critical success factors 

     

Sufficient size of factory (> 1,000 MT facilities) or link to domestic market or large processor for sales Meet quality requirements (grading, infestation, certification HACCP/ISO) Financing of raw material (minimum 1,000 MT at 250 USD = or USD 250,000) Infrastructure, power supply Productivity of staff at minimum wages Quality of raw nuts Shipping costs


Government intervention (examples) India  

Ban on the export of the raw nuts (high tax rate) Grants in favor of the improvement of the quality of the cashew kernels • Subsidy for equipment required for export of cashew in consumer packs • Subsidy for equipment for improvement in processing cashew • Subsidy for getting certification (ISO, HACCP…) • Subsidy for adopting flexi-pouch vacuum packing systems

  

The rate of subsidy would be 25% of the investment with a maximum of Indian Roupies 800,000 (USD 17,500) “Duty entitlement pass book scheme”: 1% incentive for export Incentives for the export of all agricultural products is of 5%


Government intervention Tanzania 

Memorandum of understanding between the Government of the United Republic of Tanzania and cashew nut processors on promoting cashew nut processing in Tanzania. • Date of effect October 1, 2005 • Implementing an 8.5 % Industry Development levy on the export of raw cashew nut, based on FOB value • Cashew nut processors agree to process up to 80,000 tons of cashew nut by 2009/10

    

Reduced prices for infrastructures Active administrative support Tax exemption on the imports of processing equipment Work legislation consider the cashew processing as an seasonal and agricultural activity Some tax exemption at the village level


Nigeria â&#x20AC;&#x201C; 75,000 MT processing capacity  





Creating at least 22,500 direct jobs Generating a minimum additional value of US$ 30,000,000 (3.7 billion naira) Arresting migration of rural population into big cities by geographically spreading out the units Increasing purchasing power and tax revenues


Need for the industry 

 

  

Access to capital (working capital, investments) Good quality raw nuts Technical assistance centers for training to staff Duty free imports of processing equipment Access to markets Improvement of reputation of Nigerian cashews


Role of ACA 

Production: • Facilitate initiatives on raw nut quality – link with international experts and partners



Processing: • Regional cashew consumption study • Link to cashew kernel buyers • Exchange with other cashew processors (technical expertise, etc)



Access to information • Website, newsletters, linking to expertise


Thank you Contact: Cilia de Cock African Cashew Alliance Secretariat West Africa Trade Hub www.africancashewalliance.org www.watradehub.com/accra info@africancashewalliance.org info@watradehub.com Telnr +233 (0) 21 781608

Overview of Cashews Globally July 2007 ENG  

Overview of Cashews Globally July 2007 ENG

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