Increasing worldwide demand for cashew nuts would facilitate a profitable processing industry for Cambodia and increase returns for farmers, according to a new report released yesterday.
Released by the International Finance Corporation, European Union and Ministry of Industry, Mines and Energy, the report entitled “Prospects for Cambodia’s Cashew Sub-sector” shows that the cashew industry could spur revenues of at least $30 million a year if the country’s estimated 60,000 tons of cashew produce are processed locally.
“Cambodia has good quality in-shell cashew nuts available which are currently exported to Vietnam for shelling, thus losing a major opportunity to add value,” the report says.
The report shows that while most cashew nut farming takes place in West Africa and India, Vietnam is the largest exporter and processor of the product.
Experts say there is an opening for Cambodia to compete in the region by implementing simple and cheap measures such as village- or commune-based shelling plants, especially as it currently stands as the world’s eleventh largest producer.
“One of the beauties of cashews is that globally there is high demand,” said Charles Schneider, head of office for the International Finance Corporation in Cambodia during a speech at the report’s launch in Phnom Penh yesterday.
He added there was a safety in cashew nuts as they are a rather expensive snack food fit for niche markets keen on organic food types.
The cashew nut market “hasn’t suffered some of the pricing fluctuations as some of the other commodities,” he said.
But in order to tap into niche markets that buy organic produce, Cambodian cashew producers still need to be certified by an independent body, he said.
Seth Van Doorn, political and commercial affairs officer for the European Union in Cambodia, said Cambodia was in a good position to experience rapid development in the cashew sector after years of stagnant growth.
“But of course we are starting from a very low base,” he said.
Mr Van Doorn said that the EU had the potential of being a key market for Cambodian exports of cashews due to duty free status on agricultural products. The EU imports 17 percent of processed cashews worldwide, the third largest market after North America and India.
“There’s never been a better time to be in the cashew business,” said James Fitzpatrick, a cashew nut trade specialist for Ingredient Sourcing Solutions, a cashew nut trade analysis firm in Ireland.
Mr Fitzpatrick said that a current lack of technologies to shell cashews meant that manual labor was still in high demand within the sector. If Cambodia can process its current production levels of 60,000 tons, a total of 10,000 jobs could potentially open up, he said.
Moreover, processing cashew nuts domestically would massively increase the amount farmers here could earn. Unprocessed cashews tend to earn between $600 and $1,000 per ton as opposed to around $8,000 per ton for processed cashews.
And with demand in India, China, Brazil and Russia set to rise in the coming years, there is ample potential for significant profits in the sector, Mr Fitzpatrick said.