Mozambican Cashews

Mozambique was once the world’s largest producer of cashew nuts, supplying 30% of global production. At its height, Mozambique supplied 240,000 tonnes a year, with a significant proportion being processed prior to export. However, civil conflict, ailing trees and economic policies resulted in the virtual collapse of this once booming industry. By the late 1990s Mozambique exported to India 98% of its raw cashews for processing. Although Mozambique is producing high quality cashew nuts, importers and consumers often believe they are buying Indian cashews, unaware that they were grown in Mozambique.

The cashew tree, Anacardium occidentale, is native to Brazil and was introduced to Mozambique in the 16th century but it was not until the 20th century that the commercial value of the nut was realized. This small evergreen tree is easily cultivated, vigorous, drought resistant and requires little care. The cashew nut comes from the kidney shaped seeds that adhere to the bottom of the fleshy, plump, pear shaped red-yellow cashew apple. The nuts, considered a high value luxury food, are picked, collected and exported as raw nuts or kernels.

Currently cashew production in Mozambique is less than one third of its historic high, with an estimated 940,000 smallholder farmers cultivating the nut. The cashew nut processing industry in Mozambique has been slowly revitalized and 20 processing plants are now operating within the country. In 2005 Mozambique exported 32,200 metric tonnes (32.2 million kilos) of raw cashews at a value of $28m and 1000 metric tonnes (1 million kilos) of kernels (shelled nuts) at $4.3m. Farmers received about $0.65 per kilo of raw nuts, which were then exported at $0.87 per kilo. Kernels, however, were exported at about $4.40 per kilo, commanding a much higher price than raw nuts.

Importers of cashew kernels further process the nuts, roasting, adding flavours and using them in food production. In the retail market, the whitest and largest nuts are the most valuable and graded the highest. Whole jumbo cashew nuts, one of the highest grades, sell for US$9-12.50 per kilo at wholesale. At retail these nuts sell for $18-52 per kilo depending on the outlet.

The primary marketer of Mozambique’s cashew kernels is the Agro Industriais Associados (AIA), formed by seven cashew processing plant owners. AIA also serves as an advocacy group, addressing key policy issues such as quality control and export price. AIA developed a brand of Mozambican cashews under the name Zambique. The Zambique brand, however, has not figured prominently in retail sales of cashews. Given that shelled nuts sell at retail for as high as eight times the export price, a branded product should return greater income to Mozambique. An IP strategy would aim to capture a greater share of retail revenue for Mozambique, along with an effort to build up distinctiveness in the perceptions of final consumers and increase the intangible value of Zambique cashews. Experts believe that export income could be increased to between $48m p.a. and $72m p.a.

It is worth noting that processing plants will only offer minor benefits to the industry and the country. Although processing generates employment, it must be financially viable as a physical industry to remain sustainable. Efforts to extract more income from the export market do not depend on processing, since joint ventures or partnership with external processing firms could be a means by which Mozambique may retain control of its final export product, capture intangible value and increase income to farmers and exporters.

Value chain analysis will be available here shortly.

African Cashew Alliance
http://www.africancashewalliance.org

The African cashew
http://www.africancashew.com

Ben Bennett, Natural Resources Institute

“Liberalisation, Gender and Livelihoods: The Cashew Nut Case”
Carla Braga, Carin Vijfhuizen, Luis Artur and Nazneen Kanji
Report by International Institute for Environment and Development, February, 2003

The cashew apple
http://www.hort.purdue.edu

Andy Good, Equal Exchange

Andrew Emmott, Twin Trading

Kate Gaskell, Liberation Foods, CIC

ITC Common Fund for Commodities, July 2002
http://www.unctad.org/infocomm/francais/anacarde/Doc/opportunities.pdf

The Nut Factory
http://www.thenutfactory.com

Nuts Online
http://www.nutsonline.com

Squirrel Brands
http://www.squirrelbrand.net

Technical Centre for Agricultural and Rural Cooperation
http://www.anancy.net

US UTC SSA Trade Patterns, April 2007
http://www.agoa.gov

“What Drives Competitiveness in the Mozambique Cashew Value Chain?”
Jake Walter, USAID Report, October 2006

Zambique
http://www.zambique.com

“An Investment Guide to Mozambique: Opportunities and Conditions”
United Nations, UNCTAD, International Chamber of Commerce, Geneva, 2001