CASHEW NUT CASHEW NUT MARKETINGMARKETING

MAJOR MAJOR ISSUESISSUES

�� CASHEW AS A SOURCE OF INCOME GENERATIONCASHEW AS A SOURCE OF INCOME GENERATION

�� CHALLENGES FACING CASHEW NUT MARKETING IN CHALLENGES FACING CASHEW NUT MARKETING IN GHANAGHANA

�� SUPPLY CONSTRAINTSUPPLY CONSTRAINT

�� PRICINGPRICING

�� QUALITYQUALITY

�� COST OF OPERATIONCOST OF OPERATION

CASHEW AS A SOURCE OF CASHEW AS A SOURCE OF INCOME GENERATIONINCOME GENERATION

�� Cashew nut marketing has brought Cashew nut marketing has brought about additional income to the about additional income to the farmers as well as to the nation since farmers as well as to the nation since 1990 when the first export was 1990 when the first export was made.made.

�� The country has exported 158,470MT The country has exported 158,470MT valued at US$89.34million from 2003 valued at US$89.34million from 2003 to 2006 with India as the major to 2006 with India as the major trading partner. Table 1 provides the trading partner. Table 1 provides the breakdown of the export figures.breakdown of the export figures.

Table 1: Export FiguresTable 1: Export Figures

Source: Ghana Shippers CouncilSource: Ghana Shippers Council

50050023.98 23.98 47,962 47,962 20062006

70070028.69 28.69 40,992 40,992 20052005

55055021.00 21.00 38,181 38,181 20042004

50050015.67 15.67 31,335 31,335 20032003

FOB FOB TemaTema Price Price

(US$/MT)(US$/MT)

Value Value

((US$MilliUS$Milli

onsons))Quantity Quantity

(MT)(MT)YearYear

CHALLENGES FACING CASHEW CHALLENGES FACING CASHEW NUT MARKETING IN GHANANUT MARKETING IN GHANA

�� Supply Constraint: Varying quality of Supply Constraint: Varying quality of

the raw cashew nuts in various the raw cashew nuts in various

districtsdistricts

�� Difficulty for agents to access finance Difficulty for agents to access finance

to operate. This make them totally to operate. This make them totally

dependant on exporters.dependant on exporters.

�� PricingPricing

�� High operational costHigh operational cost

Supply ConstraintSupply Constraint

�� Too many companies scrambling for Too many companies scrambling for

the few metric the few metric tonnestonnes produced.produced.

�� About 70% of export comes from About 70% of export comes from

neighbouringneighbouring countries because of countries because of

the low level of production.the low level of production.

�� Find below production levels from Find below production levels from

2003 compared with exports.2003 compared with exports.

Table 2: Production levels and Table 2: Production levels and ExportExport

47,962 47,962 16,000 16,000 20062006

40,992 40,992 12,000 12,000 20052005

38,181 38,181 9,000 9,000 20042004

31,335 31,335 7,000 7,000 20032003

Export (MT)Export (MT)

Quantity Quantity

ProducProduc

ed ed

(MT)(MT)YearYear

PricingPricing

�� The price of the raw cashew nuts at The price of the raw cashew nuts at

the farm gate level is fixed by the the farm gate level is fixed by the

exporter based on the international exporter based on the international

market price.market price.

�� It also depends on the following: It also depends on the following:

�� volume of nuts produced in the areavolume of nuts produced in the area

�� QualityQuality

�� Cost of operation in the area Cost of operation in the area

Price Cont.Price Cont.

�� Price fluctuation has been difficult to Price fluctuation has been difficult to speculate. Previously, prices have always speculate. Previously, prices have always appreciated at the end of the season, appreciated at the end of the season, however, in recent years prices fall at the however, in recent years prices fall at the end of the season.end of the season.

�� Falling of raw cashew nuts prices on the Falling of raw cashew nuts prices on the international market as a result of falling international market as a result of falling kernel priceskernel prices

�� Price fluctuationsPrice fluctuations: In a season, price of : In a season, price of raw cashew nuts changes rapidly to the raw cashew nuts changes rapidly to the extent that farmers store up their produce extent that farmers store up their produce in anticipation of higher prices. This in anticipation of higher prices. This distorts export scheduling.distorts export scheduling.

Pricing Cont. Pricing Cont.

�� Difficulty of farmers to accept Difficulty of farmers to accept

prevailing market prices. Exporters prevailing market prices. Exporters

have strived to pay about 70% of have strived to pay about 70% of

FOB price at farmFOB price at farm--gate; but with gate; but with

this, farmers are still not satisfied. this, farmers are still not satisfied.

�� Below is the FOB prices and the Below is the FOB prices and the

percentage paid to farmers:percentage paid to farmers:

Table 3: % of FOB Prices paid toTable 3: % of FOB Prices paid to

66.676,750,000.00

9,000.009,000.007507504,500 4,500 CENTRAL REGIONCENTRAL REGION

66.6766.676,750,000.00 6,750,000.00

9,000.009,000.007507504,500 4,500 GREATER ACCRAGREATER ACCRA20052005

74.0774.076,750,000.00 6,750,000.00

9,000.009,000.007507505,000 5,000 KINTAMPOKINTAMPO20052005

74.0774.076,750,000.00 6,750,000.00

9,000.009,000.007507505,000 5,000 WENCHI WENCHI 20052005

81.4881.486,750,000.00 6,750,000.00

9,000.009,000.007507505,500 5,500 SAMPASAMPA20052005

56.2256.225,336,593.005,336,593.008,894.908,894.9060060030003000UPPER WESTUPPER WEST20042004

56.2256.225,336,593.005,336,593.008,894.908,894.9060060030003000NORTHERN REGIONNORTHERN REGION20042004

78.7078.705,336,593.005,336,593.008,894.908,894.9060060042004200SAMPASAMPA20042004

65.5865.585,336,593.005,336,593.008,894.908,894.9060060035003500BEREKUMBEREKUM20042004

74.9574.955,336,593.005,336,593.008,894.908,894.9060060040004000VOLTA REGIONVOLTA REGION20042004

74.9574.955,336,593.005,336,593.008,894.908,894.9060060040004000CENTRAL REGIONCENTRAL REGION20042004

Price/MPrice/MT/$T/$

% of % of FOFOBB

FOB Price/MT/FOB Price/MT/¢¢Exchange Exchange raterate

FOB FOB FarmFarm--gate gate pricprice/kge/kg

LOCATIONLOCATIONYEARYEAR

Table 3 Cont.Table 3 Cont.

9,161.009,161.005005003,000 3,000 NORTHERN REGIONNORTHERN REGION

65.5065.504,580,500.00 4,580,500.00

9,161.009,161.005005003,000 3,000 VOLTA REGIONVOLTA REGION20062006

65.5065.504,580,500.00 4,580,500.00

9,161.009,161.005005003,000 3,000 CENTRAL REGIONCENTRAL REGION20062006

65.5065.504,580,500.00 4,580,500.00

9,161.009,161.005005003,000 3,000 GREATER ACCRAGREATER ACCRA20062006

76.4176.414,580,500.00 4,580,500.00

9,161.009,161.005005003,500 3,500 KINTAMPOKINTAMPO20062006

76.4176.414,580,500.00 4,580,500.00

9,161.009,161.005005003,500 3,500 WENCHI WENCHI 20062006

76.4176.414,580,500.00 4,580,500.00

9,161.009,161.005005003,500 3,500 SAMPASAMPA20062006

51.8551.856,750,000.00 6,750,000.00

9,000.009,000.007507503,500 3,500 UPPER WESTUPPER WEST20052005

59.2659.266,750,000.00 6,750,000.00

9,000.009,000.007507504,000 4,000 NORTHERN REGIONNORTHERN REGION20052005

Price/MPrice/MT/$T/$

% of % of FOFOBB

FOB Price/MT/FOB Price/MT/¢¢Exchange Exchange raterate

FOB FOB FarmFarm--gate gate pricprice/kge/kg

LOCATIONLOCATIONYEARYEAR

QualityQuality

�� Quality is an important parameter in Quality is an important parameter in all the contracts signed by the all the contracts signed by the exporter exporter

�� The farmer is expected to produce The farmer is expected to produce very high quality raw cashew nuts very high quality raw cashew nuts with an outturn of about 49 with an outturn of about 49 IbsIbs..

�� The quality of the raw nuts is The quality of the raw nuts is seriously affected by the following: seriously affected by the following: spots, rotten, mould and in the North spots, rotten, mould and in the North oil stained and oil stained and shrivelledshrivelled..

Cost of OperationCost of Operation

�� Cost of operation is heavily affected Cost of operation is heavily affected

by cost of petroleum products and by cost of petroleum products and

spare parts.spare parts.

�� It is also affected by the nature of It is also affected by the nature of

the road in the area of production.the road in the area of production.

�� The average cost of operation is high The average cost of operation is high

in areas where the level of in areas where the level of

production is low.production is low.

ConclusionConclusion

�� There should be a concerted effort to increase There should be a concerted effort to increase production. Farmers should take serious all the production. Farmers should take serious all the cultural and maintenance regime to enhance their cultural and maintenance regime to enhance their production.production.

�� In order to improve upon the quality, farmers In order to improve upon the quality, farmers should undertake, proper farm maintenance, should undertake, proper farm maintenance, harvesting methods & post harvest handling harvesting methods & post harvest handling seriously.seriously.

�� Efforts at the formation of cashew producer Efforts at the formation of cashew producer associations at the national and district level associations at the national and district level should be encouraged so that they can dialogue should be encouraged so that they can dialogue with exporters on all matters affecting the raw with exporters on all matters affecting the raw nut trade. nut trade.

Conclusion Cont.Conclusion Cont.

�� I want to make this fact known that I want to make this fact known that

exporters depend on farmers for exporters depend on farmers for

their stock and farmers also depend their stock and farmers also depend

on exporters to sell their produce. on exporters to sell their produce.

�� We should see ourselves as one We should see ourselves as one

family and what this family needs is family and what this family needs is

transparency (mutual trust).transparency (mutual trust).