Cashing in on the African cashew nut boom

“The main world cashew production regions in descending order of size are Africa, India, Vietnam and Brazil,” said Vinacas Chair Duc Thanh Nguyen.

Nguyen said the world demand for cashews has been growing strongly in terms of both volume and value over recent years and prospects are that demand will continue to increase for the foreseeable future.

The main consumers of cashews are from the US and European markets.

Currently 40% of the cashew world production of Raw Cashew Nuts (RCN) is produced in Africa, however only 10% gets processed (shelled and peeled) on the African continent.

He said India and Vietnam trailed by Brazil are the three biggest processors. 

Notably a lot of value in the value chain get lost for Africa, a market characterized by low yields of between 400-500 kg per ha, while the world average yield is 840 kg per ha.

Nguyen said the interest of the major players in the industry has been shifting to Africa as major actors from India, Vietnam, China, Brazil and Europe investigate opportunities to invest with a focus towards large scale mechanized processing. 

The cashew industry is clearly in transition and the competitive disadvantage of Africa as far as processing is concerned, will change at the moment more modern mechanization processes are implemented.

The changes in the industry create a new opportunity for the nation’s domestic businesses to become proactive and more involved in producing modern machinery and equipment utilized by the cashew industry.

Most recently Nguyen said domestic manufacturers introduced a cashew nut sheller that is second to none in terms of quality and highly competitive with the finest similar equipment that other manufacturers, such as those in Italy, have to offer.

Most notably, it is priced competitively at a much lower sales price.

Nguyen Xuan Khoi, director of Khuon May Viet (Viet Prototype), in turn noted that currently domestically manufactured machines are used in eight out of the nine cashew nut processing stages.

Khoi said this allows businesses in the industry to save tens of thousands of dollars and significantly reduce production costs, resulting in much higher profits.

 “Vietnam-made shellers, for example, allow a higher percentage of nuts peeled off than the top of the line Italian sheller,” he said

He said a director of a cashew export company, which is a member of the Vietnam Cashew Association (Vinacas), boasts domestically produced low-cost processing machines not only help businesses cut expenses on machines, but also allow them to reduce labour cost.

One business that he is aware of reduced the number of workers from 100 to 30 since the production line was automated with high quality Made-in Vietnam machinery and equipment.

Le Van Dat, director of the Gia Loi Company in Long An Province said durable domestically produced cashew processing machinery and equipment has an excellent shot at becoming favoured in the world.

Limited numbers of dryers, moisture meters, metal detectors, sterilizers, and the machines to classify nuts by size and pack products have been exported to overseas markets so far, but the potential for greatly enhanced exports is there.

According to Vinacas Chair Duc Thanh Nguyen, about 10 member manufacturers of the association are currently exporting machinery and equipment, mostly to Africa.

India, one of the countries with modern cashew nut processing technology, and formerly the major supplier of machines to Vietnam, has also recently placed orders for several domestically produced machines.