The difficulties of Ivorian cashew processors

Audio 01:42

A worker checks bags of cashews at a warehouse in Abidjan, Côte d'Ivoire, May 13, 2020 (Illustrative image) © REUTERS / Luc Gnago

By: Pierre Pinto Follow

2 min

Cashew nut production had a good year in 2021 in Côte d'Ivoire.

The country is the world's largest producer with 950,000 tonnes produced.

It aims to increase local cashew processing to 50% of its production in 2025 against 10% today.

However, Ivorian processors are sticking their tongue out and two of them, FMA industry and CASA, have gone out of business in recent weeks.

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Côte d'Ivoire has ambitious targets for its cashew nut.

Locally transforming half of its production within a few years.

Conquer the American market.

Free yourself from the very tough competition from Indians and Vietnamese.

But for now, these goals are far from being achieved in the opinion of the experts. Indians and Vietnamese - who buy, process and re-export in large volumes - are by far the leaders in processing. They have a skilled workforce and an industrial tradition in this field of several decades. They have the machines and simple and direct access to maintenance. On this last point already, Côte d'Ivoire is dependent on these two countries. Two countries which also source raw nuts from the Ivorian market. With their local partners, Vietnam and India buy 80% of Ivorian production. Hence the difficulty for Ivorian factories to obtain supplies. This also forces them to stockpile, generating additional costs.

Another problem for small Ivorian processors: the lack of funding.

If the big multinationals come to an agreement with the banks, it is directly between parent companies.

At the national or local level, the banks do not follow the small industrialists, too exposed to the risk and too slow to begin to be profitable.

And then the cost of energy is too expensive, adds an industrialist.

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However, in Côte d'Ivoire, the political will to accelerate the transformation is real.

It relies on a young workforce that this industry needs, on quality infrastructure, and on technical training centers, such as the factory-school created a year ago in Yamoussoukro.

But Ivorian manufacturers are calling on their government to do more to be able to fight against Asian competition.

More in incentives like subsidies or tax incentives.

That the subsidies are not the same for multinationals and for small processors.

Finally, to prevent the bulk of production from leaving for Asia leaving local factories hungry, Ivorian processors propose that a part of the production be reserved for them or that an exclusive purchasing window be guaranteed for them during a few weeks.

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