Ghanaian farmers face challenges in the cashew nut market as they struggle to secure better prices due to high export rates of raw nuts and limited local processing capabilities. Efforts to increase domestic processing face hurdles, including high interest rates on loans and a lack of local demand, leaving the country reliant on exporting raw nuts for minimal profits.
Ghana's Cashew Industry: Hurdles in Processing and Exporting for Higher Profits
Ghana's Cashew Industry: Hurdles in Processing and Exporting for Higher Profits
Ghana aims to boost its cashew nut processing industry to capture more profits, but challenges like high interest rates and weak local demand hinder progress.
In Accra, Ghana, the high cost of a small bag of roasted cashew nuts has left a visitor astonished. The cashew nut, an export staple for the country, grows from beneath fruits developed by approximately 300,000 Ghanaians engaged in its cultivation. Ghana is currently the world’s third-largest exporter of unprocessed cashew nuts, yet farmers struggle to survive on low income from their yields. Nashiru Seydou, a farmer, pointed out the high prices consumers pay for cashews compared to the low prices they receive for raw, unshelled nuts.
Economist Bright Simons highlighted the stark profit margins for retailers and roasters, revealing that raw nuts are traded at roughly $500 per tonne but are sold for $20,000 to $40,000 per tonne once roasted. Despite producing about 180,000 tonnes of cashews annually, with more than 80% exported unprocessed, Ghana misses out on significantly higher revenue through local processing. Mildred Akotia, CEO of Akwaaba Fine Foods, expresses the difficulties small processors face, as credit with exorbitant interest rates hampers their growth potential.
Historically, attempts at banning raw cashew exports to enhance local processing led to backlash, causing prices to crash. Current discussions on tariffs and policy changes appear ineffective unless businesses can scale and stimulate demand domestically. Acclaimed economist Prof. Daron Acemoglu emphasizes the need for Ghana to improve its international market access for processed cashews alongside resolving infrastructural issues.
Simons noted the absence of a strong entrepreneurial class to push for demand-enhancing efforts, urging firms to take responsibility for branding local products. The risk of a continuing brain drain arises as skilled entrepreneurs seek more favorable opportunities elsewhere. Akotia remains optimistic, envisioning growth for her business and a larger processed cashew market, fueled by international interest and her ambition to enhance Ghanaian food branding.
