• Friday, March 29, 2024
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Buyers shun Nigerian cashew on Apapa gridlock

Unlocking opportunities in cashew production

Buyers are now shunning Nigerian cashew nuts at the international market on the back of the worsening state of Apapa and Tin Can roads as well as a slow clearing process at the ports which has continued to delay contractual agreements.

The situation has resulted in a 150 percent drop in price from an average of N500, 000 per ton in the 2018 season to N200, 000 per metric ton in 2019 cashew season, its lowest since 2016.
As a result, a major source of non-oil exports for the country’s is under threat at a time Nigeria is focused on growing its foreign exchange earnings away from crude oil.

“The situation has been bad for cashew exporters as buyers are refusing to renew contract agreements because of the port congestion and delay in clearing for export,” Zacheaus Egbewusi, chief executive officer, Agri-Commodities Inspection Limited said in a telephone response to questions.

“It takes an average of 30 days for cashew to be cleared and shipped out of the ports currently. This has crashed the price of cashew to as low as N200, 000 per metric ton from N500, 000 per ton of 2018 prices. This is the lowest we have sold since 2016,” Egbewusi said.

Besides cocoa, cashew is another major cash crop in Nigeria that has huge export potentials.
It has become a top-notch cash crop in Nigeria and also serves as industrial raw materials in firms producing chemicals, paints, varnishes, insecticides and fungicides, electrical conductress, and several types of oil.

Nigeria is currently the sixth largest producer of the crop globally with production put at 160,000MT, data from the Nigeria Agricultural Ministry shows.

It is exported to the United States, India, Spain and many parts of Europe.
“We cannot meet up with our contractual agreements because of the situation at the ports and this is leading to cancelation,” said Tola Faseru, president of the National Cashew Association of Nigeria.

“The problem at the port is giving rise to huge corruption,” Faseru said.
He stressed that transaction cycles for export are taking longer than necessary and foreign buyers are beginning to question the integrity of contracts they enter into with Nigerians.

The national president stated that priority should be given to exportable commodities in line with the Federal Government economic diversification agenda.

Nigeria currently exports 95percent of its raw cashew nuts, leaving only 5 percent for domestic processing and consumption.

This is because there are very few factories that process the crop in the country.
Experts say the current situation of the ports would have been less impactful if the country is processing its cashew nuts.

“The problem emanated from last season but became serious this year and this is because we do not process our cashew nuts. This would have saved us from the situation we are in now,” Victor Iyama, national president, Federation of Agricultural Commodity Association of Nigeria (FACAN) said.

“With value addition we would have been able to preserve out cashew from a situation like this,” Iyama added.

Since the government renewed focus on agriculture, the crop has emerged one of the top five exported commodities.

Nigeria’s cashew is usually harvested between February-June, though farmers stock the crop and export it all year round.

 

Josephine Okojie