Stories

Small investments yield big rewards for cashew exports from Benin and the Gambia (en)

4 julio 2016
ITC Noticias
The challenge

Even when they are major producers of agricultural commodities, developing countries typically struggle to realize the full potential of farm exports to drive growth and job creation. Producers often lack the technical skills needed to undertake value addition at home; would-be exporters have an imperfect understanding of target market requirements.

West Africa is home to some of the world’s leading cashew producers. The nuts are the principal source of income for many rural families. Yet, because of insufficient market knowledge and weak value addition, the region’s cashew exporters often face difficulties in selling substantial volumes of their product at a relatively high price, both at home and internationally.

The response

ITC has been working to increase value addition and exports in the cashew sector in several West African countries, most recently Benin and the Gambia.

Benin is Africa’s third-largest cashew producer, but only 10% of its roughly 120,000 tons in annual production is processed into kernels locally. Moreover, exporters struggle season after season to secure purchasers for their raw cashew nuts. To remedy these challenges, in June 2015, ITC and Benin’s Ministry of Commerce launched a threeyear trade and productive capacity building project with a total budget of US$641,000. A central component of this work is forging collaboration between Benin and a world leader in cashew trade and processing, Viet Nam.

A major producer in its own right, the Southeast Asian country is a leading importer and processor of cashews. The project established a framework for cooperation between the Ho Chi Minh City University of Technology and Benin’s Agency for Investment and Export Promotion (APIEX) to facilitate the transfer of Vietnamese know-how and technology for cashew processing, to enable increased value addition of raw nuts within Benin. ITC also facilitated meetings between Beninese exporters and Vietnamese buyers.

Meanwhile, in the Gambia, a sector competitiveness and export diversification project has been supporting the longterm development of the country’s cashew, sesame and groundnut sectors. The goal is to improve production volumes, value addition and quality, to better position it to capitalize on new opportunities in existing and emerging markets. In addition, the country’s quality assurance infrastructure has been revamped, with updated technical regulations and standards for cashew products, training for the food safety authorities, and multi-stakeholder processes set up to develop regulations. ITC has worked directly with Gambian small and medium-sized enterprises (SMEs) to help them comply with international standards for product quality, safety and nutritional labelling.

The results

During a trade mission organized by ITC in November 2015, Vietnamese buyers expressed interest in importing 50,000 tons of Beninese cashew nuts, which would account for more than a third of the country’s total production. ITC facilitated the contractual frameworks to allow for an initial shipment of 25,000 tons, worth over US$30 million at the 2015 average international market rate (the actual price will only be established during the 2016 harvest, which runs from March to June). ITC is working with both partners to ensure that the full 50,000-ton amount can be delivered in subsequent years.

In the Gambia, implementation of sector-wide competitiveness and diversification strategies has been marked by a significant uptick in the health of the country’s cashew industry, with better production practices and rising yields complemented by growing trade opportunities. Eight companies have been trained in Hazard Analysis Critical Control Point (HACCP), a start-to-end food safety management system that can be essential for accessing certain markets. ITC has built the capacity of local food safety experts who will replicate training work with other SMEs and ensure that the initiative’s quality and food safety results are sustainable well into the future.

‘Farmers have learned about best practices in farming as well as farm management and as a result production has increased,’ said Alpha Ousman Jallow, Executive Secretary for the Cashew Alliance of the Gambia (CAG), pointing to quality improvements and yield growth estimates ranging from 100% to 400% across the country.

The sector’s trade performance has also improved. When the strategy formulation process started in 2012, annual cashew exports were typically around 15,000 tons. By 2014, this reached 75,000 tons, due to improved transportation and marketing infrastructure combined with new market opportunities as Chinese traders joined their Indian counterparts in sourcing from the Gambian market.

In an impact survey, enterprises that worked directly with ITC reported increased sales, exports and/or employment. For Yassin Jal Mbye, the owner and manager of Jal’s Health Foods, implementing better food safety practices have paved the way for greater sales. ‘After the eventual HACCP certification customers will also have more confidence in the products,’ she said.

Three of the participating SMEs received new equipment for vacuum packaging and nutrition and barcode labelling, which better enable products to meet international market requirements. ‘The machine and the new packaging has greatly improved the presentation of our nuts and we are now able to sell good quantities to supermarkets and minimarkets,’ said Momodou A. Ceesay, Managing Director of the Gambia Horticultural Enterprises.

The future

ITC aims to work with the Ho Chi Minh City University of Technology to establish a cashew processing factory-school in Benin to facilitate the transfer of Vietnamese expertise, building on the success of a similar venture in Côte d’Ivoire.

In the Gambia, ITC is facilitating partnerships with international institutions to expand on the results achieved. For example, the Gambia Standards Bureau has signed a memorandum of understanding to cooperate with the American Society for Testing Materials, and the CAG has set up a partnership with the African Cashew Alliance for technical cooperation. In both countries, the key will be to leverage the initial investment made with the Enhanced Integrated Framework.