Browsing through an average cashew farm after a robust harvest season, the picture of a field wearing a colour mix of red and yellow cashew apples, withering away without care could provoke an enterprising mind. The sight which on one hand depicts the reality of post-harvest loss equally presents an opportunity for a discerning investor with gaze on the potential yet to be maximised in cashew juice market.
“How many cashew fruit can we eat? If we decide to sell, hardly do we get buyers in this community because most of us have it on our farms. We only get demand sometimes from Lagos but it’s not often due to its perishability,” said Bose Ojesola, a cashew nut picker.
Of prime importance to Nigeria’s cashew farming been the nut which is jealously protected with as much effort by the Nigerian Cashew Farmers Association which sees earning volume rising ohas n projections around 960,000 tonnes and rising global demand. But the same value is not attached to cashew apples. They are often left to rot away as they ferment within 24-hours of being detached from the nuts. The local cashew market is largely built around the export value that has been on a steady track of expansion in the last few years with export trade revenue indicating significant growth.
All through 2017, a total of N34.82 billion was generated from the export of cashew majorly to Vietnam and India. That figure significantly shot up by 52.9 percent in 2018 with total export so far for three quarters of the year clocking N53.25 billion.
Out of N73.25 billion total value of agricultural export garnered in the first quarter of 2018, cashew nuts exported to India brought in N2.9 billion while that of Vietnam brought N2.1 billion, bringing the total N5 billion. The figure progressed in the second quarter by huge margin as the period is usually the beginning of peak harvest. From a total agricultural export of N85.9 billion, cashew nut topped the list with N38.4 billion brought about by N26.6 billion from export to Vietnam, N10.01 billion to India and N665.1 million to United Arab Emirates (UAE). Sesamum seeds seconded cashew during the period with main exports to Turkey (N4.7 billion), Japan (N4.1 billion) and China (N3.3 billion). Consequently, cashew largely contributed to a strong export growth by 17.3 percent compared to N73.2 billion recorded in Q1 2018. But earning outside harvest season, one in which the third quarter falls, nosedived to N9.85 billion.
Compared to 2017, cashew earnings grew from N2.44 billion in the first quarter to N13.5 billion in Q2, N3.09 in in Q3 and N15.79 billion in Q4. Analysis of the market trend shows a pattern of growth that starts sluggishly in the beginning of the year but surges to a year-peak in the second quarter before shrinking and then moderately picking up towards the year end.
Last year, some digital agricultural platforms promised return on investment of 30 percent on a N5, 000, 000 investment from January to June, charging 10 percent of invested capital as a processing fee that covered warehousing, management, security, sourcing and logistics among other needs.
Joseph Ojo, the chief executive officer, Seacos Group a local and international player in cashew and cocoa beans marketing said the market has been booming on higher attraction of new entrants to the profitability in cashew trade. Prices touched its highest point at $1,900 and were lowest at $1,200 last year. Different from few years ago when the rampant method of preservation in polythene bags affected the quality of harvest, foreign partners have picked more interested in the Nigeria’s cashew now preserved with jute bags.
However, a tiny chunk of that concentration is received by cashew fruit processing itself, an area which portends additional income opportunities for farmers, traders and fruit processors. Until few years ago, the narrative was similar for farmers in India, the largest producer of cashew. They equally laid prominence on the nuts and saw little value in the apple until a juice company PepsiCo India discovered an opportunity to source alternative juices, apart from the popular coconut, pomegranate and lime juices, which were becoming increasingly unaffordable.
Cashew juice became integrated into mixed fruit juice and subtly became replacements for other expensive juices from apple, pineapple and banana. The initiative trickled down to raising farming families’ income by as much as 20 percent. Small farmers sold apples for about 3 rupees per kilo while every kilo of nuts yielded about six kilos of cashew apples. The company now buys nuts in addition to creating a market for what was essential garbage from the farm.
Seacos CEO agrees the current earnings is still a fraction of what can be generated from cashew farming compared to when Nigeria builds the capacity to process cashew nuts and apples. “The two major markets we have: India and Vietnam are not the consumers. They are just processing grounds. They have factories using cheap labour to process this cashew nuts. So we are virtually exporting our jobs to those countries,” he explained.
“If we chose to process here in Nigeria, we will as well be selling to where Indian and Vietnamese markets are selling, which are America and far Asia countries. It is more profitable to process but we are still looking for how we can get the attention of the government to assist because setting up a factory is not that easy.”
Health wise, the fruit is acclaimed to be rich vitamin C content, burns fat and enhances sexual performance. It is useful at promoting healthy heart and containing high triglyceride level which is associated with increased risk of heart diseases.
For smoothie brewers looking to derive new recipes from fruit mix, going after cashew fields might be worthwhile.
