<p>Singapore-based agribusiness company Valency International has established a new cashew peeling and packaging facility in Abidjan, Côte d’Ivoire. The decision comes two years after the company secured US$20m in credit from Finnfund and Norfund - the two development finance institutions of Finland and Norway, respectively, to establish a cashew processing plant in Côte d'Ivoire with an annual capacity of 45,000 tonnes.</p> <p>Cote d’Ivoire plans to export 50% of its total production by 2026. Cote d’Ivoire has emerged as a leading cashew producer with output expected to hit almost 1 million tonnes this season. Although most of the cashew harvest is exported raw to processing hubs overseas, an increasing share of production is now starting to get processed in West Africa. The decision by Valency to invest in this new cashew processing facility in Cote d’Ivoire comes less than a year after it decided to expand its existing cashew nut processing facility in Nigeria.</p> <p>Several other Singaporean firms are also active in the Ivorian cashew industry. Olam sources cashews from thousands of farmers and operates three processing facilities, two factories, and over a dozen warehouses in the country. In 2022, Royal Nuts, another Singapore-based firm, launched a US$23m plant with a yearly processing capacity of 75,000 tonnes in the centre of the country. Last year, Singapore’s Robust International received funding to expand its cashew processing activities in Côte d'Ivoire.</p> <p>While there are opportunities for local value addition, running a profitable cashew processing venture is easier said than done, which explains why many prefer to focus on trading rather than operating a factory. According to Wim Schipper, an executive committee member of the African Cashew Alliance, those involved in processing require in-depth knowledge of various aspects of the business, from purchasing the right quality of nuts at the ideal price to managing a large team of workers in the plant. They also need to be familiar with the latest processing equipment and have the capital to invest in it, while ensuring the business is certified for food safety and social compliance. Côte d'Ivoire has significantly increased local cashew processing, from 6.2% of total output in 2016 to 21% in 2023. This progress is partly attributed to government incentives such as credit guarantees, subsidies, duty-free importation of processing equipment, and tax exemptions. There are other market factors that may also be prompting Asian traders like Valency to process cashews at source in Africa itself. After a long period of slump raw cashew prices have shot up. Raw cashew export prices (CIF) out of Cote d’Ivoire, which held steady (more or less) at US$887.50 per metric tonne at the start of the year (2024) have jumped to US$1375 per metric tonne (as of 21 Jun 2024). Traders have reported that West African suppliers are demanding higher prices, delaying shipments, or simply defaulting on their contracts. Shipments of raw cashew are reportedly arriving late in key processing hubs like Vietnam and India.</p> <p>The global market for edible nuts like cashew is estimated at US$303.5bn in 2023 and is projected to reach US$459.bn by 2030. The Cashews segment itself is set to grow at 6.6% CAGR over the next 7 years.</p>