Middle East Remains Growing Market for Cashews Amidst Global Demand Slump

Published May 24, 2023
Cashew consumption in the Middle East continues to increase with imports doubling over the past five years, and the trend continued early in 2023. Importing 84,900 metric tons of cashew kernels in 2022, the Middle East makes up about 15% of global cashew kernel imports. This region’s rapid economic growth has boosted consumption as cashews are considered luxurious snacks and used as an ingredient in many traditional dishes. The short-term growth outlook depends on price levels and the region's economic performance.

Despite a global slump in nut demand, the Middle East stands out as an exception as it experiences continued growth in demand. The region has emerged as a significant market for cashews, accounting for approximately 15% of global cashew kernel imports in 2022. Over the past five years, cashew kernel imports have doubled, surpassing 85,000 metric tons. Based on export data from Vietnam and India, two countries that process up to 80% of the world's cashews, the Middle East imported 84,900 metric tons of cashew kernels in 2022, with a compound annual growth rate (CAGR) of 20% over the past five years.

Source: Vietnam Cashew Association (VINACAS), India Ministry of Commerce and Industry

This strong demand continued throughout the first four months of 2023, with imports from Vietnam reaching 17,190 metric tons, a 22% YoY increase. This more than offsets a slight decrease in imports from India, at 8,179 mt in Q1 of 2023, down 6% YoY.

Source: VINACAS, India Ministry of Commerce and Industry

The soaring consumption of cashews in the Middle East can be attributed to several factors, the most prominent one being the rapid economic growth over the last two decades. In Saudi Arabia, the largest consumer of cashews in the region, a clear correlation exists between the country's GDP per capita and per capita nut consumption. This correlation holds true for almost all countries in the region, including the UAE, a major nut distribution hub, as well as countries experiencing economic challenges like Syria.

Source: Tridge, Worldbank, INC, ITC Trademap

In addition to gaining popularity as a snack, cashews used as an ingredient have also increased significantly. Cashews are commonly used as dessert toppings and as a pastry ingredient. Additionally, the use of cashews in savory dishes has witnessed significant growth. They contribute a nutty flavor to rice dishes such as kabsa or mandi. Consumption has been boosted as cashew prices in 2023 are still approximately 20% lower than the 5-year average price. In the Middle East, at lower prices, cashews are used to partially substitute other food items, such as meat, in rice dishes.

Another factor contributing to the demand growth for cashews in the region is that consumers in the Middle East are also becoming more health-conscious and some are opting to include more plant-based proteins in their diets. The post-pandemic return of tourism brought another boost in consumption, as cashews are offered as snacks and ingredients in fine dining in tourist establishments.

Over the short term, these factors could continue to boost cashew demand in the region, especially if prices remain at current low levels. However, the main determinant of long-term, continued growth in consumption will be the economic performance in the region.

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