Nigeria’s 2023 cashew export is being threatened by Cambodia’s surging production of the commodity as the season begins.
Cambodia is the world’s fastest-growing cashew nuts producer and it is increasingly becoming a threat to Africa, especially Nigeria where cashew production has only grown marginally over the years.
The Cambodia cashew association said the country’s supply to the global market will hit 900,000 metric tonnes this year as against the over 670,000 it supplied last year.
Farmers say the rising production in Cambodia will cut Nigeria’s supply of the commodity as Vietnam; a major buyer of Nigeria’s cashew has constantly increased its imports from Cambodia owing to proximity and quality.
“Cambodia is expecting a major increase in its 2023 cashew production and this will offset prices of the nuts in the global market this year,” said Tola Faseru, president of the African Cashew Alliance while speaking on the season.
“The country has consistently increased its cashew production and is becoming a threat to Africa and Nigeria’s cashew exports as it seeks for more market share,” Faseru said.
According to him, Vietnam – the world’s largest importer of the commodity is increasing its cashew imports from its neighbouring Cambodia, a situation he said would affect the demand for the nuts from Nigeria and Africa.
The price of cashew nuts like any other commodity depends on market factors such as global productivity, availability, general demand, and quality of the produce.
In 2022, Vietnam imported cashew nuts worth $1.07 billion from Cambodia, according to data from the Vietnam Trade Office, and it is expected to surpass the value this year.
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Within 10 years, Cambodia has increased its production of cashew five-fold; according to data from the African Cashew Alliance, Cote d’Ivoire is the only African country that currently produces more nuts than Cambodia.
Three key factors, according to experts, have helped Cambodia grow its cashew significantly: the use of high-yield varieties, the availability of large areas suitable for cashew with efficient farming methods, and a readily available and closer buyer – Vietnam.
“Cambodia has been consistent in increasing its yearly production and this is a threat to the demand of our cashew nuts by Vietnam,” said Debo Thomas, chief executive of Hastom Nigeria in response to questions.
“This might have a major influence on pricing and our export, especially this year, as their production is expected to hit over a million tonnes,” he said, noting that demand from farmers has been relatively low since the season started two weeks ago in Nigeria.
A metric tonne of dried cashew nuts sells for N620,000 in Lagos and the export price is about $1,200, according to the Nigerian Cashew Association. At the farm gate, a kilo of cashew nuts sells for N550.
Nigeria’s 2023 cashew output is expected to increase owing to favourable weather conditions, the cashew association has said.
“From what we have seen, the output will be good this year and it is expected to increase,” said Ojo Ajanaku, national president of the Cashew Association of Nigeria.
The quality of the nuts will also be good owing to favourable weather, he said. But lingering fuel and naira scarcity is already impacting the season negatively for farmers.
“The naira scarcity is making it difficult to buy cashew now as most farmers do not have a bank account and prefer cash transactions,” said Bode Ademola, a cashew trader in Ogbomosho.
“We can’t get cash and this is making aggregation of the nuts for export difficult. The fuel scarcity is also compounding the problem,” Ademola noted.
Nigeria is the fourth largest grower of cashew nuts in Africa and sixth globally, with production estimated at 240,000 metric tonnes per annum.
According to the National Bureau of Statistics, Nigeria earned N77.82 billion from cashew nuts export in the first nine months of 2022, and 70 percent of the total nuts for the period were exported to Vietnam.
It has become a top-notch cash crop in Nigeria and the Federal Government identifies cashew as an agro-industrial crop as well as one of the priority crops to boost revenue and revamp the economy.
Cashew in Nigeria is usually harvested between February and June, though farmers stock the crop and export it all-year round.
