The Cashew Opportunity

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It is often said that ‘health is wealth’, i.e. to stay alive and productive, we need healthy food. Due to the global rise in health consciousness, cashew nuts have gained popularity in Nigeria, North America and Europe not only for their flavour but also for health benefits. Thus, the demand for cashew has increased.

Cashew was introduced to Nigeria by the Portuguese in the 16th century. Its value was initially limited to the cashew apple as no commercial value was attached to the nuts. However, cashew’s commercial attractiveness commenced with the first commercial planting in mid-1950s by the defunct Eastern Nigerian Development Corporation (ENDC) and the Western Nigerian Development Corporation (WNDC).

Cashew grows in almost all states of Nigeria; however, most production is concentrated in the Eastern, Western, and Middle Belt areas with Anambra, Oyo, Enugu, Osun, and Kogi having the largest production.

The agricultural sector has been recognized as key to driving Nigeria’s economic diversification plan. Though there are no stand-alone regulations on cashew production and processing in Nigeria, relevant regulatory bodies such as the Federal Ministry of Agriculture and the Nigerian Export Promotion Council (NEPC) have initiated approaches to reposition the cashew value chain for success.

In 2016, the NEPC launched thirteen National Strategic Export Products (NSEP) to expand non-oil sector growth. Cashew was recognized as one of the five priority agro-industrial products (others being palm oil, cocoa, sugar, and rice), among the thirteen NSEP. Given its priority status, Nigeria offers up to a five-year tax holiday including a zero-export and import duty on agricultural inputs and equipment for cashew investors. Investors can also tap into the NEPC’s export development fund.

Demand profile

Global consumption of cashew has increased dramatically over the years, reaching over 700,000 mtons in 2018. According to the FAO, Nigeria is the 8th largest producer of cashew in Africa with about 5% of the continent’s production and 15th worldwide, with a global market share of about 2% in 2018.

Cashew is one of the most profitable long-term agricultural investments, but inadequate processing capacity has remained a stumbling block to the vibrancy of the industry. Nigeria processes only an estimated 10% of the total cashew nuts produced. The remaining 90% are sold at low prices in the global market, with China, Vietnam and India topping the sales chart. These countries process 85% of the global raw cashew nuts.

Cashew is Nigeria’s third-largest agricultural export accounting for about 16% of total exports in the last three years.

Our total export of N61.8 billion in 2018 was more than 2.8 times its value in 2017. By 2019, Nigeria’s cashew export had declined by c.39% to N39 billion. Cumulatively, Nigeria’s total cashew export from 2017 to 2019 stands at over N122 billion.

The outbreak of COVID-19 may cause cashew nut exporters in Nigeria to suffer huge losses. According to a report by NEPC, cashew export may fall by US$60 million because of the Vietnam Cashew Association’s caution to its local enterprises to carefully consider before importing raw cashew especially from West Africa as a result of the pandemic. NBS trade data as of Q1 2020 shows that cashew export declined by 18% y-o-y from N5.4 billion in Q1 2019 to N4.5 billion in Q1 2020.

Opportunities for cashew farmers and investors

The diverse uses of cashew across industries and households have spurred global demand, unlocking opportunities for Nigerian farmers and investors. The NEPC has identified ten countries that offer the largest untapped potential for cashew exports, with opportunities that could unlock about US$3.4 million in revenue.

Opportunities also exist for investors to set up processing plants. The need to tap into the processing and marketing of cashew is driven by the growing appetite for cashew as a key industrial input as well as for household consumption purposes.

Cashew beyond snacks

Cashew is produced for various purposes including medicinal, industrial and household uses. An estimated 60% of cashew kernels are consumed in form of snacks while 40% are used in the confectionery industry.

The cashew kernel used as a snack can either be roasted, salted, or flavored. It contains a rich source of oil, Vitamin K, protein, thiamin, minerals, and dietary fibers. One of the health benefits of cashew nut is that its calorie content is 16% lower than what is stated in other food labels.

The cashew apple or drupes is an edible fruit eaten across Nigeria. It can be used to make juice or distilled to make an alcoholic drink and is rich in vitamin C, antioxidants, minerals, and sugars. However, Nigerian cashew producers are less interested in cashew fruits, with only 6% of cashew apples produced in the country exported.

Beyond snacks, Cashew nuts shell when crushed release a liquid known as Cashew Nut Shell Liquid (CNSL) which is highly sought in industrial processes to develop antioxidants, fungicides, lubricants, and drugs, etc. The cashew nutshell also contains Cashew Nut Kernel Oil (CNKO) while the pressed kernel cake from CNKO extraction can be used as humans and animal feeds.

Challenges of cashew production

Shipping delays are a key challenge to the Nigerian cashew industry. Other challenges include:

  • The presence of smallholder farming in the cashew farming segment impedes productivity. There are over 25,000 smallholder farmers (SHFs) engaged in cashew farming in Nigeria.
  • Inadequate capital for farmers to upgrade and set up processing plants.
  • High post-harvest losses have caused huge income losses to cashew farmers and investors. Post-harvest losses are attributable to several factors including poor storage and distribution facilities and unnecessary delays at the ports.

In conclusion, Nigeria can become the king of cashew in Sub-Saharan Africa through concerted efforts by cashew stakeholders including the government, relevant associations of farmers, financiers, etc. This can be done by formulating programs and policies that will enhance the entire value chain of the crop while collaborating with farmers to ameliorate the challenges they face before, during, and after farming.

– Tunji Adegbite
Thought Leader in Strategy and Supply Chain
Founder of Naspire, a research and business strategy platform using contextual knowledge to help entrepreneurs and professionals in Africa succeed. He can be reached via

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