Global cashew market and Opportunities for Nigeria Cashew Seminar Lokoja, Nigeria 10 & 11 July 2007 Cilia de Cock African Cashew Alliance Secretariat West Africa Trade Hub – USAID funded
World production of cashews 2005 Origin
Production IMP/EXP Production (MT ‘000) (MT ‘000) (‘000 ctn)
Domestic (‘000 ctn)
Export (‘000 ctn)
South (Sept-Jan) of Prev. Yr
Brazil E. Africa
245 165
0 (140)
2,450 250
(200) 0
2,250 250
Indonesia+Comb
115
(110)
50
0
50
India Vietnam
360 300
580 85
9,400 3,850
(4,000) (40)
5,400 3,810
W. Africa
425
(415)
100
0
100
1,610
0
16,100
odia, odia, Thailand
North Feb-June
TOTAL
(4,240) 11,860
….and in 2006 Origin
Production IMP/EXP Production Domestic Export (MT ‘000) (MT ‘000) (‘000 ctn) (‘000 ctn) (‘000 ctn)
South (Sept-Jan) of Prev. Yr
Brazil E. Africa
250 150
0 (140)
2,500 100
(400) 0
2,100 100
95
(90)
50
0
50
India Vietnam
410 325
580 90
9,900 4,250
(4,900) (50)
5,000 4,200
W. Africa
445
(440)
50
0
50
1,675
0
Indonesia + North (Feb-Jun)
TOTAL
16,850 (5,350) 11,500
2007 Production Outlook
No major weather issues
Brazil • Larger and earlier than last season • Excellent quality and kernel size
Vietnam • Larger and earlier than last season • Quality improved
Balance of producing areas report “normal” crops with some increases
Expectations for 2007 Origin
Production IMP/EXP Production (MT ‘000) (MT ‘000) (‘000 ctn)
Domestic (‘000 ctn)
Export (‘000 ctn
South (Sept-Jan) of Prev. Yr
Brazil E. Africa
300 155
0 (140)
3,000 150
(420) 0
2,580 150
Indonesia +
115
(110)
50
0
50
India Vietnam
475 350
610 100
10,850 3,850
(4,900) (50)
5,950 3,800
W. Africa
465
(460)
50
0
50
1,720
0
16,150
North Feb-June
TOTAL
(5370) 12,580
Plantings suggest 50% increase over 5 years PRODUCTION FORECAST (Trade EstimatesEstimates-Round Figures)
India Brazil Vietnam Other Asia Africa TOTAL Equiv Kernels
2005 400,000
Share 24
2010 700,000
Share 28
250,000 350,000
15 21
350,000 600,000
14 24
75,000 600,000
04 36
150,000 700,000
06 28
1,675,000 16.75
STC KAJU INDIA 2006 – Sept ‘06
2,500,000 25.00 mil ctns
Consumer markets Indian Cashew Exports 70 60
1,000 MT
50 40 30 20 10 0 2002
2003
2004 Others
Europe
2005 N.A.
2006
N.A. continues to be the major user..... World Cashew Usage Asia / Other 21% North America 50%
Europe 29% Source: Trade
African cashew industry
Production in two seasons: • East Africa (with Brazil): Sept-Jan • West Africa (with India & Vietnam): Jan – June
>2.6 mln cashew producers with average plantation of 1-3 ha Yield of 2-4kg per tree vs 10-20 kg per tree in India/Vietnam plantations
Production per country Country
MT production
Cote d’Ivoire
200,000
Guinea Bissau
100,000
Tanzania
100,000
Nigeria
75,000
Mozambique
65,000
Benin
45,000
Senegal
15,000
Togo
5,000
Ghana
15,000
Kenya
5,000
Burkina
5,000
Mali
3,000
Guinea - C
3,000
Factors at the national level that influence raw nut prices at farm level
Taxes Port charges Freights Transport costs • from country to warehouse • from warehouse to the port
Nr of actors in the value chain • In Guinea Bissau farmers receives 40% of FOB price, in Cote d’Ivoire and Benin 50% and in Tanzania 60%.
Comparison of costs freight
avg
fobbing
per 20' - $/ton
freight
cost
Guinea Bissau
95 to 120
107.5
57
82.5
247
Nigeria
45 to 50
47.5
40
0
87.5
Ivory Coast
55 to 70
62.5
40
31
134
Benin
55 to 60
57.5
33
0
90.5
Ghana
45 to 50
47.5
25
0
72.5
Senegal (Zig)
95 to 100
97.5
36
0
134
Senegal (Gambia)
95 to 100
97.5
68
0
166
Gambia
95 to 100
97.5
21
10.5
129
Assumed with 1USD = 500 f cfa
tax
total
International factors that influence pricing
Quality • • • •
KOR, nut count Packaging Humidity (drying, packaging, storing) Peelability
International kernel price – consumption levels (reputation of cashew & health) Exchange level USD – cfa Freight & port Increasing level of production world wide
KOR and Nut count
Kernel Outturn Ratio: • Number of pounds of nutmeat/kernels per 80 kg of raw nuts (range from 43 (low) to 54 (high)
Nut count • Number of whole cashews per kg of kernels (high number: small nuts, low number: large nuts)
Kernel prices WW320 – high/low 3.5 3 2.5 high
2
low
1.5 1 0.5 2005
2004
2003
2002
2001
2000
1999
1997
1996
0 1993
FOB India USD/pound
Cashew Prices 1993-2005
USD/CFA exchange rate 2001- 2007 CFA/USD Exchange rate 2001-2007
20 07
20 06
20 05
20 04
20 03
USD/CFA
20 02
20 01
800 700 600 500 400 300 200 100 0
The USD has lost +/- 30% of its value in the last 5 years 350 cfa per kg of raw nuts in 2002 with same conditions is 245 cfa per kg today because of exchange rate
Raw Cashew Prices USD/MT FOB 1999/00 Benin
965
Burkina Faso
2000/01
2001/02
2002/03
848
523
599
827
643
625
Gambia
1071
887
539
688
Ghana
934
800
476
619
Guinea
1007
1999-2000: good kernel prices and exchange rate.
620
Guinea Bissau
1155
1040
572
757
2001-2003:
Indonesia
1063
888
673
671
944
817
505
579
Kenya
1068
715
621
599
kernel prices drop and in 2003 USD loses value
Mozambique
1041
651
554
547
Nigeria
809
642
412
470
Senegal
1143
737
518
701
Tanzania
1216
758
603
665
Ivory Coast
Being competitive: best practices
Organization of supply Quality • drying of all nuts (humidity < 8.50%) • no mix with old stocks • Packing in jute bags
Competitive shipping lines (freight) and port services/charges
Processing Processing (domestic)
Country
Processing (export)
Mozambique
25,000
Nigeria
16,000
Tanzania
15,000
Kenya
5,000
Cote dâ&#x20AC;&#x2122;Ivoire
5,000
500
Guinea Bissau
2,500
500
Benin
1,500
80
Burkina
900
Ghana
500
2,500
80
Senegal
150
Togo
80
Mali Guinea Conakry Total
71,400
3,860
Critical success factors
Sufficient size of factory (> 1,000 MT facilities) or link to domestic market or large processor for sales Meet quality requirements (grading, infestation, certification HACCP/ISO) Financing of raw material (minimum 1,000 MT at 250 USD = or USD 250,000) Infrastructure, power supply Productivity of staff at minimum wages Quality of raw nuts Shipping costs
Government intervention (examples) India
Ban on the export of the raw nuts (high tax rate) Grants in favor of the improvement of the quality of the cashew kernels • Subsidy for equipment required for export of cashew in consumer packs • Subsidy for equipment for improvement in processing cashew • Subsidy for getting certification (ISO, HACCP…) • Subsidy for adopting flexi-pouch vacuum packing systems
The rate of subsidy would be 25% of the investment with a maximum of Indian Roupies 800,000 (USD 17,500) “Duty entitlement pass book scheme”: 1% incentive for export Incentives for the export of all agricultural products is of 5%
Government intervention Tanzania
Memorandum of understanding between the Government of the United Republic of Tanzania and cashew nut processors on promoting cashew nut processing in Tanzania. • Date of effect October 1, 2005 • Implementing an 8.5 % Industry Development levy on the export of raw cashew nut, based on FOB value • Cashew nut processors agree to process up to 80,000 tons of cashew nut by 2009/10
Reduced prices for infrastructures Active administrative support Tax exemption on the imports of processing equipment Work legislation consider the cashew processing as an seasonal and agricultural activity Some tax exemption at the village level
Nigeria â&#x20AC;&#x201C; 75,000 MT processing capacity
Creating at least 22,500 direct jobs Generating a minimum additional value of US$ 30,000,000 (3.7 billion naira) Arresting migration of rural population into big cities by geographically spreading out the units Increasing purchasing power and tax revenues
Need for the industry
Access to capital (working capital, investments) Good quality raw nuts Technical assistance centers for training to staff Duty free imports of processing equipment Access to markets Improvement of reputation of Nigerian cashews
Role of ACA
Production: • Facilitate initiatives on raw nut quality – link with international experts and partners
Processing: • Regional cashew consumption study • Link to cashew kernel buyers • Exchange with other cashew processors (technical expertise, etc)
Access to information • Website, newsletters, linking to expertise
Thank you Contact: Cilia de Cock African Cashew Alliance Secretariat West Africa Trade Hub www.africancashewalliance.org www.watradehub.com/accra info@africancashewalliance.org info@watradehub.com Telnr +233 (0) 21 781608