Cashew Production…Fascinating Market Trends

CASHEW (Anacardium occidentale)

Cashew Production deals with the growing and cultivation of cashew for its numerous uses. Cashew is a tree crop, a small to medium tree, generally single-trunked and spreading in habit, up to 10-12m in height. In older trees, the spread may be greater than height, with lower limbs bending to touch the ground. Leaves are thick, prominently veined, oval to spatulate in shape, with blunt tips and entire margins.

Most cashew trees start bearing fruit in the third or fourth year and are likely to reach their mature yield by the seventh year if conditions are favorable. The average yield of nuts of a mature tree is in the range of 7-11 kg per annum. Although the cashew tree is capable of living for 50-60 years, most trees produce nuts for about 15-20 years[1].

The cashew tree has been cultivated for food and medicine for 400 years. The various parts of the cashew fruits are of economic value. This includes Apple, nut, and kernel.

Cashew Apple or false fruit:  is an edible food rich in vitamin C. It can be dried, canned as a preserve, or eaten fresh from the tree. It can also be squeezed for fresh juice, which can then be fermented into cashew wine which is a very popular drink in West Africa. In Brazil, the apple is used to manufacture jams and soft and alcoholic drinks.

Cashew wine: Cashew wine is made in many countries throughout Asia and Latin America. It is a light yellow alcoholic drink, with an alcohol content of 6-12 percent.

Cashew nut kernel:  The primary product of cashew nuts is the kernel, which is the edible portion of the nut and is consumed in three ways:

• Directly by the consumer;
• As roasted and salted nuts;
• In confectionery and bakery products, for example, finely chopped kernels are used in the production of sweets, ice creams, cakes, and chocolates, both at home and industrially, and as a paste to spread on bread.

Cashew nut shell liquid (CNSL): This is a vicious and dark liquid, which is extremely caustic. It is an important and versatile industrial raw material. There are more than 200 patents for its industrial application, in particular, its use as raw material for phenolic resins and friction powder for the automotive industry (brake linings and clutch disks).

CNSL is also used in moldings, acid-resistant paints, foundry resins, varnishes, enamels, and black lacquers for decorating vases, and as insecticides and fungicides.

In tropical medicine, CNSL has been used in treating leprosy, elephantiasis, psoriasis, ringworm, warts, and corns.

Like cashew nuts, CNSL also has an excellent international market and its imports have reached almost US$10 million annually, corresponding to the sale of the raw liquid.  However, the exporting country would earn much more foreign currency if manufactured products were exported.

Cultivation

It requires a warm humid climate, with a minimum of 600mm rainfall, but well-distributed rainfall is more important. Cashew thrives under a wide range of temperatures from 15º to 40º degrees Celsius. The cashew is a strong plant that is renowned for growing in soils, especially sandy soils that are generally unsuitable for other fruit trees. For the best production, deep well-drained sandy or sandy-loam soil is recommended[3].

Cashew can be propagated using either seeds or vegetative methods such as grafting, budding, and layering. It takes about 5-6 years for first bearing when propagated through seeds. However, vegetatively propagated planting material is necessary to obtain higher and early yield.

Planting of cashew at a spacing of 10m x 5m which will give a tree density of 200 trees per ha and at the same time providing sufficient space for growers to plant Inter-crops during the initial years of establishment.

The trees grow vigorously in the first 3 years; branches hanging on the ground should be removed because they interfere with harvesting.

Pest and Diseases

Pests and diseases also affect the production level of the established plantation.

The following insects have been identified to affect cashew:

• Stem girdler (Analeptes trifasciata),
• Red-banded thrips (Selenothrips rubrocinctus)
• Fruit scrapper  (Pachnoda cordata )
• Root borer (Plocaecderus ferrugineus L.)[4]

These insect species have been implicated with economic losses estimate between 52 and 75% of the production level.[5]

Similarly, cashew production is seriously affected by three major diseases. These include

1. Floral shoot die-back (caused by Lasiodiplodia theobromae (Pat) Giffon and Maubl.)
2. Twig die-back (caused by L. theobromae) and
3. Root rot of cashew seedlings (caused by Pythium ultimum, Trow.).

• Floral shoot die-back reduces total nut yield by an average of 38-70%[6].
• wig die-back cause’s more than 50% death of vegetative shoot of cashew.[7]
• The loss due to root rot of cashew seedlings was estimated at 10-15% in the nursery.

Harvesting[8]

The harvesting and processing of cashew are very labor-intensive. After producing clusters of flowers, cashews produce the edible apple, and also a nut encased in a heavy shell, which is the true cashew fruit. The cashew tree flowers for two or three months and fruit mature about two months after they bloom.

Apples to be used for processing into products such as jam or juices should be picked from the tree before they fall naturally. On falling to the ground, apples may become damaged. Once damaged, the apples may ferment and deteriorate quite rapidly. The more the apple ripens, the sweeter the taste. It is therefore recommended that the apple is picked as it is about to fall. At this stage, the nut is fully-grown for about two weeks and is ripe and ready for harvest.

Cashew nuts should keep for 12 months or more, provided that they are dried, moisture content to eight percent or below, packed in sealed polythene bags and stored under dry conditions.

Constraints

Local buying agents play a vital role in the cashew supply chain in Nigeria, and there is a tendency for production to increase whenever there are many agents trying to secure supplies.

The agents penetrate in villages in producing areas, in order to source supplies. Competition, especially when export prices are attractive, tends to develop between established buyers and local firms.

Poor handling of cashew production and defective export packaging processes for the international market may be costing Nigeria about N177bn annually[9].

Problems associated with the acquisition of a large expanse of land and initial capital outlay also affect the investment in the cultivation of cashew in Nigeria.

Economic potential

The total land under cashew tree cultivation in Nigeria by 1995 was estimated at about 40,000 hectares, of which about 60% of the holdings were owned by peasant farmers (Ayodele et al., 2001)[10]. Currently, the total land area under cashew cultivation has increased to 320,000 hectares (FAO, 2007).

The cashew nut production has been on a steady increase from 30,000 metric tonnes in 1990 to 636,000 metric tonnes in the year 2006 (FAO, 2007). This significant increase has been due mainly to the involvement of private entrepreneurs, Federal and State Governments, Cooperative societies, and affluent farmers in cashew cultivation (Aliyu and Hammed, 2008)[11].

Nigeria is the world’s sixth-largest producer of cashew, with an annual production of about 120,000 tones[12]. Currently, 75 to 80% of cashew nuts produced in Nigeria are exported, as only very few companies are involved in local processing of the produce (Aliyu and Hammed, 2008). The government liberalization policy on commodity crops has impacted significantly the prices and demand for raw cashew nuts in the recent past (Ezeagu, 2002; Topper et al., 2001)[13]. However, Nigeria offers one of the cheapest sources of raw cashew nuts. Nigerian nuts have consistently served the Indian and Vietnamese cashew factories and in recent years have added the Brazilian market. The kernels are well accepted in the United States of America and Western Europe because, of the high quality of the produce (Aliyu and Hammed, 2008)

General information

Production

Cashew has produced in around 32 countries of the world. The world production figure of cashew crop is around 2.7 million tons per annum. The major raw cashew producing countries with their production figures in 2005 (as per the UN’s Food and Agriculture Organization) are Vietnam (960,800 tons), Nigeria (594,000), India (460,000 tons), Brazil (147,629 tons), and Indonesia (122,000 tons)[14].

The world’s total area under the cultivation of cashew is around 35,100 km². India ranks first in the area utilized for cashew production, though its yields are relatively low. The world’s average yield is 700 pounds per acre (780 kg/hectare) of land.

Currently, Nigeria has about 600,000 surviving cashew trees spread across the East-West, South, and Northern Nigeria, with an average yield of about 200kg to 400kg per hectare[15].

Since 2008, Nigeria has become the largest producer. Nigeria was the last the largest producer of cashew nuts in 2010[16]. Cashew nut production trends have varied over the decades.

Nigeria is the world’s 6th largest producer of cashew, with an annual production volume of about 120,000 tonnes.

The Cashew Industry also provides about 600,000 jobs and a total annual trade worth

N24billion, thus making the sector a major contributor to Nigeria’s non-oil GDP[17]. It is widely grown in the southern states of Nigeria.

      Map of Cashew growing areas in Nigeria

Source:  National Cashew Association of Nigeria

Global And Local Demand For Cashew Market Overview

Image source:Healthline

Cashew business has for many years been a major source of food and income generation for many homes and corporate ventures. The trees are usually grown for their kernels which when roasted have a very pleasant taste. 

The demand for cashew nuts is on a daily increase. The global cashew market is projected to register a compound annual growth rate of 4.6% during the forecast period of 2021-2026 further proving that the cashew business is good. Over time it has become an economically important commodity for countries such as India, Nigeria, Vietnam (among others) who have a large market for it. Vietnam tops the list in terms of exports and processing whereas India is leading for Cashew nut production, processing, consumption, and exportation. Processing industries in India have the highest production rate worldwide.

Nigeria currently is the 6th largest producer of cashew globally and has proven to those in the value chain to be a profitable enterprise. We have one of the choicest breeds and best kernel yields but the potential of the Nigerian cashew nut business value chain is still very underutilized and begging for more activities. However, here you will be discovering an easy and fail-proof way to earn legally from the cashew value chain without touching a farm tool.

The pandemic just like with other facets of agriculture has had a huge negative impact on the cashew business market, globally. The logistics and global distribution channels are usually the most affected. The general delays in collection and shipment resulted in lower yields than normal, further reducing the overall kernel supplies.

On the positive side, there has been an upshot in plant-based diets as better sources for protein. People who are taking up a more plant-based vegan diet prioritize alternative sources of protein hence resulting in the soaring demand for nuts and nut-infused foods.

The pandemic significantly affected supply chains for nuts especially cashew nuts, however, their demand and cravings as snack options pulled through the roof even on global search trends.

Increasing demand for flavoured cashews and favourable government initiatives are further fueling the consumption of cashew nuts in the African region. In 2018, among all the cashew-producing nations, African countries contributed 56.5% to global production, while Asian countries contributed 44%. In the last eight years, Vietnam has been the largest supplier of cashew to the United States, China, Australia, Canada, and New Zealand. Furthermore, cashew production is growing tremendously in Vietnam. The Vietnamese government got involved in developing its cashew industry and we are hoping the Nigerian government makes the practice more favourable for industry players like us.

Growing Key Market Trends

Image source:https://www.toskglobal.com

Edible cashew nuts have been used as a snack for a long time and are now taking centre stage as premium-quality snack food. Cashews are also used as one of the main ingredients in preparing various sweet and savoury dishes, especially in Asian cuisine. The starch content of cashew nuts is about 23%, which is a lot higher than most other nuts and makes them suitable for thickening sauces.

Moreover, nowadays, cashews are used in mueslis, energy bars, cookies, chocolates, and ice creams. Cashews are known to be high in nutrients, such as copper, which improve bone health, as one ounce of cashew contains 622 micrograms of copper. Nevertheless, cashews have an inflation-driven consumption pattern, as reported by the International Nut and Dried Fruit Council.

Cashew nuts have been discovered to richly contain heart-friendly monounsaturated fatty acids like oleic, and palmitoleic acids. They are relatively high in fibre compared to peanuts, and they help gain a healthy weight by improving digestive function. Such high-value nutrition has prompted snack manufacturers to launch several cashew-based snacks to meet the demand, such as the ready-to-drink cashew milk, which acts as a lactose-free milk substitute. Due to increasing health consciousness among consumers in the European region, there has been a growing trend of cashew nut consumption. Recently, cashew nuts are also increasingly being used as an ingredient in spreads and snack bars (especially organic), boosting cashews consumption overall.

The shell of the cashew seed yields derivatives used in many applications including lubricants, waterproofing, paints, and arms production.

Business Opportunities In the Cashew Nut Business Around the World

Asides from farming and direct sales of the farm produce, there are many business opportunities for interested individuals within the cashew industry as listed below:

1. Source of Food:

The cashew fruit and the cashew nuts are both great sources of food. The fleshy fruit known as the cashew apple can be sold directly for food while the cashew nuts, the most important part of the cashew fruit, when roasted can be sold directly to consumers as a snack.

2. Alcohol Production:

The cashew fruit is actively used in the production of alcohol by many alcohol producers around the world, making the sale of the cashew fruit to their facilities, a great source of income for the cashew nuts farmers, traders, or exporters in Nigeria, Africa, or anywhere around the world.

3. Source of Skincare Products: Cashew skin cream

Cashews are known as acne-fighting nutrients. These nuts are high in selenium, which acts as an antioxidant with vitamin E, leaving hydrated skin and reduced inflammation. Moisturizing cream brings condition and protection to skin and hair

4. Power Generation as Biofuel:

Cashew nut shells can provide energy in different ways and can be in solid and liquid form. When raw – it can be produced into bio-crude, known as cashew nut shell liquid and a solid cake. Cashew nut shell liquid is an important and powerful bio-oil whose calorific value is comparable to that of petroleum oils. Furthermore, when extracted, the oil can be used to produce a cake that has less energy than the raw shells but can be used as a solid fuel for energy generation as well

5. For Medicine: 

People also use the nut to make medicine. Cashew is used for  stomach and intestinal (gastrointestinal) disorders. Some people apply cashew directly to the skin as a skin stimulant and to seal (cauterize) ulcers, warts, etc

We will be further looking at How To Start Cashew Nuts Business In Nigeria which will be an exposition into how individuals or groups can be gain easy entry and further access the cashew business value chain.

References

[1] Curtsey: www.fao.org