Opinion

Nigeria's Surging Cashew Production and the Potential for the Processing Industry

Raw Cashew Nut
Nigeria
Emerging Market Opportunities
Cashew Nut Kernel
Market & Price Trends
Published Dec 7, 2023
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Nigeria’s cashew production is set to surpass expectations in 2023 and continue soaring to reach more than 500,000 mt by 2028. Nigeria’s exports, mainly to Vietnam and India, amounted to more than 355,000 mt in the first 10 months of 2023. This would indicate a crop of more than 350,000 mt, as exports and production are highly correlated. As production expands, the country aims to also increase processing capacity. After opening two high-profile processing plants in 2023, five more processing plants are expected to start operating in the coming months. The success of these plants will be closely monitored as it provides a blueprint for future investments in Nigeria’s cashew processing.

Soaring Cashew Production in 2023

After crashing in the early 2010s, the Nigerian cashew industry has been on a slow path of revival. Estimates vary wildly for Nigeria’s production, but it is generally accepted to have well surpassed 350,000 metric tons (mt) in 2023, far more than initial pre-season estimates of 300,000 mt made at the start of the year.

Nigeria’s domestic consumption is fairly low and most cashews are produced for exports. Vietnam holds a monopoly on cashew processing, and Nigeria, like most African cashew producers, Nigeria sells most of its cashews as raw cashew nuts (RCN) to Vietnam, where it is processed further and then exported to end-consuming countries. India is another large importer of RCN. However, most of this is for domestic consumption.

According to data from the Vietnam Cashew Association (VINACAS), Nigeria exported 273,143 mt of RCN to Vietnam in the first 10 months of 2023, more than double the 124,044 mt exported during the same period in 2022. Meanwhile, exports to India totaled around 80,000 mt from Jan-23 to Oct-23, similar to the 80,923 mt exported during the same period in 2022.

Although the harvest has concluded, exports in Nov-23 and Dec-23 could increase cumulative exports to Vietnam and India to as much as 370,000 mt. This represents a significant increase compared to the cumulative exports of 222,992 mt to these destinations in 2022. While some of the 2023 exports may include leftover stock from the 2022 season, the overall exports indicate a substantial increase in production, potentially reaching 350,000 mt when final production figures are available.

Future Production Estimates

Cashew trees are fairly quick-bearing and can start bearing a crop in as little as three years if grafted rootstocks are used and cultivars suited to the climatic conditions are planted. The most popular cultivars being planted are Hastom’s hybrid HOC-038 and Brazilian jumbo-sized, which produce large nuts, in high demand for the snacking industry. Cashew trees are generally low maintenance, with lower water requirements, adding to their popularity as an extensively managed crop. According to the Nigerian Export Promotion Council (NEPC), more than 25,000 smallholder farms are involved in cashew production. Cashew farming on larger commercial plantations is also gaining traction, and production is expected to increase significantly over the next decade.

Despite persistent challenges, Nigeria is positioned to surpass 500,000 mt in cashew production by 2028, as the Cocoa Research Institute of Nigeria (CRIN) forecasted. However, the accuracy of these projections is contingent on having comprehensive records of both productive and yet-to-be-productive cashew areas, a data aspect that is currently deficient.

Source: NEPC, CRIN, VINACAS, India Ministry of Commerce and Industry, Nigeria National Bureau of Statistics, Tridge

“Nigeria Will Soon Become Another Vietnam”

Nigeria has ambitious targets to become a major processor of cashew nuts, similar to many of the world’s other leading cashew producers. However, like other major cashew-producing nations, attempts to challenge Vietnam's monopoly in cashew production have been unsuccessful thus far. Nigeria exports only around 6,000 mt of cashew kernels annually, which, until mid-2023, have not yet shown a significant increase.

However, several cashew processing plants are currently undergoing development in Nigeria. Speaking to the Nigerian newspaper, the Independent, Ojo Ajanaku, President of the National Cashew Association of Nigeria (NCAN), mentioned that Nigeria will soon become another Vietnam. Specifically, Ajanaku highlighted the imminent opening of five cashew processing plants in Nigeria. According to NCAN, even the smallest among these plants will boast a processing capacity of 15,000 mt per year.

Several high-profile cashew processing plants have already started operations in 2023. In Sep-22, the civil engineering firm Julius Berger Nigeria Plc inaugurated a modern cashew processing facility. This plant processes cashews and sells them under the retail brand Mighty Kashoo. With an estimated processing capacity of 18,000 mt per annum, it marks a significant development in Nigeria's cashew processing infrastructure. Additionally, earlier in 2023, the Annie Glidden Commodities (AG) Nig. Ltd cashew processing plant commenced operations in Kwara. This state-of-the-art facility boasts a capacity of 5,000 mt per annum, contributing further to the country's efforts in advancing cashew processing capabilities.

The success of newly established processing plants will be closely scrutinized, and their performance could potentially attract additional investments. Notably, government initiatives, such as offering tax cuts lasting three to five years for cashew processing plants, are poised to further support and incentivize the growth of this sector.

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