Value chain analysis cashew nut processing in West Africa

ES1.    The cashew sector in West Africa has been growing consistently over the last decade. World demand for cashew has grown at a rate of 6% per year in the same period. Local cashew nut processing is a relevant source of largely low-skilled but specialised jobs in West Africa, generating 80–200 jobs per 1,000 tons of raw cashew nuts (RCN) depending on the degree of mechanisation. Local processing growth will contribute directly to job creation, especially for young women.

ES2.    The success of local cashew nut processing in West Africa depends on governmental policies, market forces and the industry’s comparative and competitive position. Governmental policies differ significantly between the two countries analysed in this study. Côte d’Ivoire intervenes very actively in the cashew sector whereas Benin largely leaves the sector to market forces. This study found a high degree of dynamism and new investment in cashew nut processing in both countries.

ES3.    Data on competitiveness of the West African cashew nut processing industry is difficult to obtain. The competitiveness gap between West Africa and Vietnam is estimated by resource persons at between USD 150 and USD 350 per ton of RCN in favour of Vietnam. Finding ways of bridging this gap requires urgent in-depth analysis.

ES4.    Competitive advantages of the West African cashew processing industry over key its competitor Vietnam include:

A) availability of good-quality raw material (RCN);
B) geographical access to markets;
C) traceability thanks to source proximity;
D) low negative environmental impacts.

ES5.    Diversification of cashew kernel sourcing by buyers presents a big opportunity for West Africa in view of the current dominance of Vietnam in the international cashew kernel market. Direct sourcing is also expected to become more important for customers in Europe and the USA. This could provide more traceability, shorter supply times and possibly lower transport costs for cashew kernels from West Africa.

ES6.    The Centre for the Promotion of Imports from developing countries (CBI) is recommended to develop a new cashew processing support programme in the West Africa region or in Côte d’Ivoire more specifically. This programme would provide support for the general competitiveness of the cashew processing industry, contribute to increasing real processed volumes, prepare small- and medium-sized enterprises (SMEs) for exporting cashew kernels and for expanding exports to European and other markets.

ES7.    The programme should consider all the relevant factors to the competitiveness of the West African processing industry. It may be structured in six theme clusters:
A) Markets (access and information);
B) Quality (improve practices);
C) Efficiency (improve practices);
D) Finance (support linkage and preparation);
E) Exchange (support coordination and exchange between stakeholders); and
F) Sustainability (improve practices). Potential activities per cluster have been listed in the report.

ES8.    CBI is advised to support companies having an existing processing capacity of 5–10,000 tons of RCN, as well as companies aiming to expand their current capacity to that same level by the end of the project. The programme shall support them in the process of business expansion.

ES9.    CBI is advised to ensure institutional coordination and collaboration with authorities and with key cashew sector support actors identified in the report. A CBI project formulation mission is recommended to take place at the start of the project, to coordinate and negotiate Memoranda of Understanding (MoU) and terms and conditions for the collaboration and involvement of agencies in the implementation of the future CBI cashew sector support programme.

ES10.  During development and implementation of the programme, the continuity of government interventions in the sector, as well as their various positive and negative effects should be fully analysed, as they may largely define the competitive and comparative position of the cashew processing industry.