Growth in Cambodian cashew production: what it means to global market, Africa

By Isaac Piyuori  

For many years, India and Brazil were the major cashew producing countries in the world. Over the past two decades, however, Africa has become the spine of the global cashew nuts production as the continent has become the largest global raw cashew nuts (RCNs) producer. Per African Cashew Alliance (ACA) data, Africa produced 60% of the 3.8 million tons global production, with Cote d’ Ivoire producing more than 1 million tons in 2021.

Most of Africa’s production is  exported into Asia for processing before they are consumed in Europe and America. Though India remains a major producer, most of its production is processed and consumed locally. Vietnam, the world’s largest cashew nuts processor, therefore, depends hugely on Africa for RCNs, importing about 90% of the continent’s production. Vietnam’s dependence on Africa means a readily available market for African farmers and a profitable business opportunity for large scale buyers and exporters.

In recent years, however, Cambodia is increasingly becoming a major producer and supplier of RCNs to Vietnam. ACA production data shows the Asian country is the fastest growing cashew nuts producing country in the world. What accounts for this growth, and how is it impacting the global industry and Africa in particular?

Cambodian production       

Cambodia’s cashew nuts production has seen significant year-on-year growth over the past decade, becoming a major producer of the commodity. In 2012, Cambodia’s RCN production stood at an estimated 70,000 tons. By 2015, this had increased to an estimated 100,000 tons but dropped slightly in 2016 to around 85,000 tons. After recovering to 100,000 in 2017, production increased to an estimated 170,000 tons by 2019. The trend continued in 2020 with an estimated production of between 200,000 and 250,000 tons. This saw an incredible increase in 2021 with production estimated to be around 350,000 tons. Per ACA projections, Cambodian production is expected to be between 450,000 and 500,000 tons in 2022.

Within  10 years, Cambodia has increased its production of RCN by five folds. Cote d’Ivoire is the only African country that currently produces more RCNs than Cambodia. Three key factors, according to a Cashew expert and ACA consultant, Jim Fitzpatrick, account for the significant growth in Cambodian production: the use of high yield varieties, availability of large areas suitable for cashew with efficient farming methods, and a readily available and closer buyer.

Cambodia has over the years invested heavily in research on quality and high yielding cashew varieties that are disease resistant and good for the country’s weather. The Cambodian cashew variety N20 is, for instance, considered to be one of the very high yielding varieties in the world.  

Also, unlike many African countries where land acquisition for cashew production is a major challenge, Cambodia has preserved a large suitable area for cashew production purposes. This makes it easier for people to go into large and commercial cashew production. It is also worth mentioning that the country’s approach to cashew production is more mechanized and efficient, giving them an advantage over other African countries.

Unlike African cashew producing countries, Cambodia is much closer to Vietnam, the world’s largest importer and processor of RCNs. This means a closer and readily available market to Cambodian cashew farmers. This, according to the Responsible for Sector Organisation and Partnership at the ACA, Fadel Karimou, is preventing high post-harvest losses seen in Africa due to delays in buying from farm gates and poor storage.

What does Cambodian production mean to the global industry, Africa

The growth in Cambodian cashew production, Jim Fitzpatrick believes, means there are at least 400,000 tons more RCNs in the cashew market since 2019. This is contributing significantly to meeting the increasing global demand for cashew. For the Vietnamese processing subsector, this means a closer inventory to keep processing throughout the year. This is also good for traceability and food safety.

It is pertinent to ask: does this affect Africa in any way, and what can Africa learn from Cambodia?

Cambodia’s growth in cashew production is not affecting the African industry or export to Vietnam in any way, at least for now. Debunking claims that Vietnam will soon get all its inventory from Cambodia instead of Africa, Fadel explained that Vietnam will always need African production to process to full capacity, so long as global cashew consumption keeps increasing.

"Vietnam today has a processing capacity of around 3 million tons of RCNs. Cambodian production is around 400,000 to 500,000t. Africa produces 60% of global production, over 2.1 million tons. Cambodia cannot overnight produce to meet Vietnam’s processing capacity. They will continue to buy from Africa,” he said.

Beyond this, Cambodia is looking to increase its local cashew processing. The country is looking to process its production locally to optimise the industry’s contribution to the economy, which will mean fewer RCN for export to Vietnam.

Moving forward, however, African countries need to work on increasing their production. Ghana and a few other countries are doing well in researching improved cashew varieties. But a lot more resources need to be committed into this. African governments need to preserve lands for production and prevent cashew farms from being destroyed for other purposes, while also improving the efficiency of farmers through training and mechanisation. This will increase productivity.

Most importantly, Africa needs to increase its local cashew processing. Cote d’ Ivoire is a rising star in this regard. Governments need to create the right conditions and put in place the appropriate policies to encourage local cashew processing. This includes providing direct subsidies to local processors, granting tax exemptions or reduction on the importation of processing equipment and machines, while also encouraging the various development banks to support the local processing subsector with loans at favourable terms and conditions and reasonable interest rates.