CASHEW NUT MARKETING MAJOR ISSUES
CASHEW AS A SOURCE OF INCOME
GENERATION
CHALLENGES FACING CASHEW NUT MARKETING IN GHANA
SUPPLY CONSTRAINT
PRICING
QUALITY
COST OF OPERATION
CASHEW AS A SOURCE OF INCOME GENERATION Cashew
nut marketing has brought about additional income to the farmers as well as to the nation since 1990 when the first export was made. The country has exported 158,470MT valued at US$89.34million from 2003 to 2006 with India as the major trading partner. Table 1 provides the breakdown of the export figures.
Table 1: Export Figures
Year
Quantity (MT)
Value (US$Milli ons)
FOB Tema Price (US$/MT)
2003
31,335
15.67
500
2004
38,181
21.00
550
2005
40,992
28.69
700
2006
47,962
23.98
500
Source: Ghana Shippers Council
CHALLENGES FACING CASHEW NUT MARKETING IN GHANA Supply
Constraint: Varying quality of the raw cashew nuts in various districts Difficulty for agents to access finance to operate. This make them totally dependant on exporters. Pricing High operational cost
Supply Constraint Too
many companies scrambling for the few metric tonnes produced. About 70% of export comes from neighbouring countries because of the low level of production. Find below production levels from 2003 compared with exports.
Table 2: Production levels and Export Quantity Produc ed Year (MT)
Export (MT)
2003
7,000
31,335
2004
9,000
38,181
2005
12,000
40,992
2006
16,000
47,962
Pricing The
price of the raw cashew nuts at the farm gate level is fixed by the exporter based on the international market price. It also depends on the following: volume of nuts produced in the area Quality Cost of operation in the area
Price Cont. Price fluctuation has been difficult to speculate. Previously, prices have always appreciated at the end of the season, however, in recent years prices fall at the end of the season. Falling of raw cashew nuts prices on the international market as a result of falling kernel prices Price fluctuations: In a season, price of raw cashew nuts changes rapidly to the extent that farmers store up their produce in anticipation of higher prices. This distorts export scheduling.
Pricing Cont. Difficulty
of farmers to accept prevailing market prices. Exporters have strived to pay about 70% of FOB price at farm-gate; but with this, farmers are still not satisfied. Below is the FOB prices and the percentage paid to farmers:
Table 3: % of FOB Prices paid to YEAR
LOCATION
FarmFarmgate pric e/kg
FOB Price/M T/$
Exchange rate
FOB Price/MT/¢ Price/MT/¢
% of FO B
2004
CENTRAL REGION
4000
600
8,894.90
5,336,593.00
74.95
2004
VOLTA REGION
4000
600
8,894.90
5,336,593.00
74.95
2004
BEREKUM
3500
600
8,894.90
5,336,593.00
65.58
2004
SAMPA
4200
600
8,894.90
5,336,593.00
78.70
2004
NORTHERN REGION
3000
600
8,894.90
5,336,593.00
56.22
2004
UPPER WEST
3000
600
8,894.90
5,336,593.00
56.22
SAMPA
5,500
750
9,000.00 6,750,000.00
81.48
6,750,000.00
74.07
6,750,000.00
74.07
6,750,000.00
66.67
6,750,000.00
66.67
2005 WENCHI
5,000
750
9,000.00
2005 KINTAMPO
5,000
750
9,000.00
2005 GREATER ACCRA
4,500
750
9,000.00
2005 CENTRAL REGION
4,500
750
9,000.00
Table 3 Cont. YEAR
LOCATION
NORTHERN REGION
FarmFarmgate pric e/kg 4,000
FOB Price/M T/$ 750
Exchange rate
3,500
750
3,500
500
3,500
500
3,500
500
3,000
500
3,000
500
3,000
500
3,000
500
4,580,500.00
76.41
4,580,500.00
76.41
4,580,500.00
65.50
4,580,500.00
65.50
4,580,500.00
65.50
9,161.00
2006 NORTHERN REGION
76.41
9,161.00
2006 VOLTA REGION
4,580,500.00
9,161.00
2006 CENTRAL REGION
51.85
9,161.00
2006 GREATER ACCRA
6,750,000.00
9,161.00
2006 KINTAMPO
59.26
9,161.00
2006 WENCHI
6,750,000.00 9,000.00
2005 SAMPA
% of FO B
9,000.00
2005 UPPER WEST
FOB Price/MT/¢ Price/MT/¢
9,161.00
Quality Quality
is an important parameter in all the contracts signed by the exporter The farmer is expected to produce very high quality raw cashew nuts with an outturn of about 49 Ibs. The quality of the raw nuts is seriously affected by the following: spots, rotten, mould and in the North oil stained and shrivelled.
Cost of Operation Cost
of operation is heavily affected by cost of petroleum products and spare parts. It is also affected by the nature of the road in the area of production. The average cost of operation is high in areas where the level of production is low.
Conclusion
There should be a concerted effort to increase production. Farmers should take serious all the cultural and maintenance regime to enhance their production. In order to improve upon the quality, farmers should undertake, proper farm maintenance, harvesting methods & post harvest handling seriously. Efforts at the formation of cashew producer associations at the national and district level should be encouraged so that they can dialogue with exporters on all matters affecting the raw nut trade.
Conclusion Cont. I
want to make this fact known that exporters depend on farmers for their stock and farmers also depend on exporters to sell their produce. We should see ourselves as one family and what this family needs is transparency (mutual trust).