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July 06, 2008

African cashew industry continues to grow

The African cashew industry is poised to expand as interest and investment fuel growth in the international cashew market.

A recent meeting and a planned meeting are just two indications of the industry’s expansion: In June, the Bill and Melinda Gates Foundation brought industry stakeholders together in Frankfurt, Germany, to discuss a recent study of the industry and identify ways to address challenges. And in September, the African Cashew Alliance will hold its third annual conference in Tanzania.

“From that workshop we refined a project outline and we got a stronger commitment from all the partners to work together,” said Rita Weidinger of GTZ, the German Development Corporation, which may implement projects financed by the Gates Foundation to improve the industry. At the Gates foundation meeting, stakeholders based their discussions on a study produced by Dalberg Global Development Advisors.

Expanding cashew production is attractive in many respects: Cashew cultivation is environmentally friendly, and the cash crop provides critical supplemental income to farmers and their families. There is also an exceptional opportunity to process cashews in Africa, as opposed to shipping the raw product away for processing.

In Burkina Faso, for example, foreign buyers from other West African countries and around the world bought practically all of the unprocessed cashews this year, said Minata Kone, general director of Sotria-B, a cashew processing company.

“I don’t know what happened on the international market, but people came to buy everything we produced here,” Kone said. “We don’t have anything to process. That is the crucial problem we are facing today.”

The same issue affected Nigeria’s Abod Success Investment, but its general manager said financing would allow his company to resolve that problem.

“Financing the deals is the key issue for us,” said Tunde Odunuga. “We need to be able to buy and stock cashew for later processing. If we had financing, we could do this.”

Local processing is recognized by many as a particular opportunity for the African cashew industry. Very little of the cashew grown in Africa is actually processed on the continent; most of is shipped to India where it is prepared for consumption.

“We need to train producers to have a high quality product,” Kone said. “And then we can process well.”

Cashews also have not been as aggressively marketed as other snacks, which could add significant value.

Designing and implementing interventions to resolve industry challenges like these would be the primary goal of the project financed by the Gates Foundation.

In the workshop in Germany, stakeholders reviewed the Dalberg study of the cashew industry and began to discuss what interventions could be undertaken to address priority issues. GTZ proposes a value chain approach to improving the sector.

“All partners were very pleased with the workshop," said Rita Weidinger of GTZ, which organized the meeting. “Most of all, the private partners are more committed to partner any intervention in the sector.”

Each challenge is an opportunity – and an indication of a growing industry, said Vanessa Adams, director of Enterprise Development at the Trade Hub.

“There are lots of difficulties, but there are solutions and there are always successes,” said Adams after a recent visit to cashew producers and buyers in Burkina Faso. “That’s why you need somebody as tenacious as Mrs. Kone and buyers as committed as Global Trading and institutions supporting it all.”

All together, targeted interventions could increase farmers' incomes by over 100 percent, the Dalberg study estimated.

The Trade Hub has helped make the cashew industry’s challenges manageable by bringing together a wide variety of industry stakeholders. In 2005, stakeholders created the African Cashew Alliance to move the industry forward. Its third annual conference will bring together industry insiders from across the continent and from around the world.

“We are very excited about this international cashew gathering in Dar es Salaam,” Adams said. “Last year in Mozambique, we could see partnerships and deals being made before our very eyes. Many people have already expressed interest in participating.”

The African Cashew Alliance is a dynamic group that shares information and ideas about producing, processing and marketing cashews, which ultimately will create jobs and economic development.

WATH

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