The price of cashew in Nigeria, the sixth-largest producer in the world, has fallen by 60 percent in the past 12 months to its lowest in 3 years, exporters said, blaming this on their inability to timely meet up with their contractual agreements.
Since the commencement of the 2019 cashew season, exporters have been unable to meet up with their contractual agreements entered into on the back of a worsening Apapa and Tin Can traffic situation as well as the slow clearing process at the port.
The situation has resulted in a drop in price from an average of N500,000 per ton in 2018 season to N 200,000 per metric ton in 2019 cashew season, its lowest since 2016.
“The price of cashew has crashed to as low as N200, 000 per metric ton from N500,000 per ton of 2018 prices. This is the lowest we have sold since 2016,” Zacheaus Egbewusi, chief executive officer, Agri-Commodities Inspection Limited, said in a telephone response to questions.
“The demand for Nigerian cashew is now very low because we hardly meet up with our supply agreement with buyers. This is because of the situation at the ports,” Egbewusi said.
“The fall in price is as a result of the situation at the port. It now takes 30 days for cashew to be cleared and shipped out of the ports currently,” he added.
This has also put the country’s non-oil export under serious threat as export of cashew – one of Nigeria’s top five non-oil exported commodities continues to thin out at a time Nigeria says it is focusing on growing its foreign exchange away from crude oil.
Besides cocoa, cashew is another major cash crop in Nigeria that has huge export potentials. It has become a top-notch cash crop in Nigeria and is eaten and also serves as industrial raw materials for firms producing chemicals, paints, varnishes, insecticides and fungicides, electrical conductress, and several types of oil.
Nigeria is currently the six-largest producer of the crop globally with production put at 160,000MT, data from the Nigeria Agricultural Ministry shows.
It is exported to the United States, India, Spain and many parts of Europe.
“We cannot meet up with our contractual agreements because of the situation at the port and this is leading to cancelations,” said Tola Faseru, president of the National Cashew Association of Nigeria.
“The problem at the port is giving rise to huge corruption,” Faseru said.
He stressed that transaction cycles for export are taking longer than necessary and foreign buyers are beginning to question the integrity of contracts they enter into with Nigerians.
The national president stated that priority should be given to exportable commodities in line with the Federal Government’s economic diversification agenda.
Nigeria currently exports 95 percent of its raw cashew nuts, leaving only an abysmal five percent for local processing and consumption.
This is because there are very few factories that process the crop in the country.
Experts say the current situation of the port would have been less impactful if the country is processing its cashew nuts.
“The problem emanated from last season but became serious this year and this is because we do not process our cashew nuts. This would have saved us from the situation we are in now,” Victor Iyama, national president, Federation of Agricultural Commodity Association of Nigeria (FACAN) said.
“With value addition we would have been able to preserve our cashew from a situation like this,” Iyama added.
Since the government renewed focus on agriculture, the crop has risen in its profile, emerging as one of the top-five exported non-oil commodities.
Nigeria’s cashew is usually harvested between February-June, though farmers stock the crop and export it all year round.
Josephine Okojie
