Courtesy of RawCashewNuts.com
When Cashew was first planted in Nigeria, the main objective was ecological. The cash crop was a very viable resort for curtailing the twin devils of erosion and disforestation, particularly in Nigeria’s middle belt.
Today, the story is different. Nigeria is now in the exclusive club of the world’s top producers of cashew. And cashew is now one of the country’s foreign exchange earners.
Annual production has now topped 144,000 tonnes with a remarkable 266.7% jump in prices over the last nine year.
However due to the largely unstructured nature of the sector, most of cashew business done in Nigeria have been the export of raw nuts—in its unprocessed form.
Typically, Nigerian raw cashew nuts have been largely purchased and converted into finished goods by the Indians and Vietnamese with lesser quantities finding their way to Europe and America.
As the season begins this year, Cashew will offer a very viable means of earning foreign exchange following the all-time slump in the price of oil which is Nigeria’s mainstay.
The cashew nut season which typically lasts till June, is most rewarding in its first three months when the kernel out-turn ratio (KOR) is highest. Kernel Out –turn ratio which simply implies the percentage of the good cashew kernels recoverable from a lot of raw cashew nuts is higher in the months before the rains come. And so, better KOR means better money. Typical KOR at the start of the season is 51 percent but this dips to as low as 44 percent by June so new entrants are advised not to make ambitious commitments far into the season.
Typically, season flag-off prices start at about N180,000.00 per metric tonne and sell between $900 to $1,500 per metric tonne CNF (Cost and Freight) but could fluctuate upwards or downwards very quickly based on the workings of the market.
Traditional buyers of Nigerian RCN are Indians, Vietnamese and Chinese. However, Indians often pose certain challenges that are unusual for other buyers, often reneging on contracts so caution is needed. Always insist as part of contract terms that an irrevocable Letter of Credit is opened by the buying party. This will guarantee you of their capacity to pay once shipping documents are presented to the buyer’s bank.
Many Nigerian raw cashew nut traders have lost hundreds of millions in naira to other international trade payment options like Bills for Collection and Open Account. Please avoid them.
Cashew nuts serve dietary, medicinal and industrial purposes and are in large demand for the production of anti-bacterial preparations, varnishes, insecticides and car brake pads.
The commodity can be sourced in all parts of Nigeria with the most viable quantities available at Dekena in Kogi State; Okigwe in Abia State and Ogbomoso in Oyo.