In the first few months of a normal year, over 55% of all cashews would be harvested by farmers in West Africa, dried and shipped in raw form to Asian processors before being sold to consumers worldwide.
But this year, the coronavirus pandemic is hitting the sector just as West Africa’s cashew marketing season was meant to kick off.
Prices for raw cashews, which were already under pressure from excess supply in the last few years, tumbled after processing slowed in Asia and border closures in March stopped major buyers flying to West Africa from Vietnam and India.
With the majority of consumers outside the continent, the longer-term outlook for West Africa’s cashew sector will hinge on how key markets recover from the pandemic.
Measures to contain the virus also hampered flows of harvested cashews in the region.
A dusk-to-dawn curfew in Senegal shortened the time available to dry nuts. A new cashew cargo facility at Gambia’s airport idled due to the halt in air traffic and a regional lockdown in Ghana made it harder to deploy workers, according to officials and traders.
Some West African rural communities, whose livelihoods depend on what they earn from cashews during the lean season, are feeling the pain.
In the tiny coastal country of Guinea-Bissau, where cashews account for around 90% of export revenue and are the only source of income for 650 000 households, the government has given emergency funds to banks to support the sector.
Some Bissau farmers are distilling extra rum from unsold nuts, according to the farmers’ association.
But the situation is less gloomy elsewhere. Buying has picked up slightly in Ghana and production is expected to reach the forecast 140 000 tons, agricultural ministry official Anim Jerry Jacob told Reuters.
In April, prices for farmers had fallen over 56% to 3.5 Ghanaian cedi ($0.6140) per kg, he said.
Wayne Tilton, Africa director for Red River Foods, one of the largest cashew importers for the United States, said the crisis’s impact on Ghana’s cashew sector had been less bad than he had feared. Ghanaian farmers are receiving higher prices at the tail end of this season than at the same time last year, he said.
The crisis has warped dynamics on the consumer end in unprecedented ways. The mass cancellation of weddings in India meant demand plummeted for the cashew-based sweets traditionally offered as gifts, said Dhruv Dalmia, whose family’s business exports nuts from West Africa.
Conversely, US cashew imports for consumption jumped 18% year-on-year in January-April, trade data shows. Panic-buying is credited for the welcome boost, but the trend is expected to reverse in the second half of 2020 given the surge in unemployment to 30 million people.
“Are they going to be running out and buying cashews? Probably not,” Tilton said.
Red River Foods’ forward US sales for the third quarter are lower than in the same period of 2019, he said, without giving exact figures.
