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Business News of Tuesday, 21 January 2020

Source: Business & Financial Times

B&FT Editorial: Price volatility is a disincentive in cashew value chain

Even though global demand for cashew has been increasing by 7-10 percent annually over the last ten years, Ghanaian cashew producers have not benefited in any substantial manner from the surge in demand

Additionally, production of cashew in the country has increased from 13,000 metric tonnes in 2008 to an estimated 110,000 metric tonnes in 2018. Ghana currently has the highest yield per hectare in the African region.

Cashew production is dear to the heart of government, and it is for that reason that it has been selected alongside other tree crops like coconut, coffee, oil palm and shea under the Planting for Export and Rural Development (PERD), to ensure that these tree crops are grown on large acreages to form a sustainable raw material base that can feed industries under the 1D1F industrialization programme.

The inclusion of cashew in the programme seeks to not only alleviate poverty but also address issues of climate change and livelihood adaptation strategies, as well as position Ghana as a world-leading producer of cashew.

Cashew is estimated to have contributed about 53% of Non-Traditional Exports total combination to the economy in 2018, which is an increase from 44% in 2017. In spite of all these, cashew farmers are challenged with low productivity due to poor agricultural practices and ow return on investments.

Most cashew farmers are also disconnected from markets, and lack access to on-form and business training.

As the 2020 buying season of the commodity gradually begins across cashew-growing communities in the country, price uncertainty remains the number-one bane of farmers. For example, at the beginning of the 2019 season the price was GH5 per/kg but later took a nose-dive to as low as GH2/kg at some point in time during the year. The asking price however later appreciated, and the season ended at GH3/kg.

The National Cashew Farmers Association’s checks reveals that the price of Raw Cashew Nuts (RCN) in India, which is the world’s leading importer, is currently around US$7.5/kg. Yet the asking price for RCN in the country is not even GH7/kg. The price differential is frightening, and something drastic has to be done about this about this if farmers are to continue producing the commodity.

Parliament in late 2019 passed the much-awaited Tree Crops Development Authority bill, which is awaiting Presidential assent and constitution of the Authority. When established, the Authority should be able to put rest the perennial cashew pricing issues and restore a modicum of price sanity in the volatile industry.

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