Government will soon evaluate all available remedy options to salvage the collapsing cashew processing industry; one of the key interventions could be a ban on the export of raw cashew nuts (RCN) Mr. Ekwow Spio-Garbrah, Minister for Trade and Industry, has hinted.
He said it has become imperative to take crucial decisions like banning exports of RCN to protect industries, and that government is awaiting an official report from the cashew processing industry players to better inform any such decision.
“If it becomes necessary to ban RCN exports to reactivate all the closed processing factories we will not hesitate to do so, considering the employment opportunities and other important benefits these factories offer to growth of the economy,” Mr. Spio-Garbrah disclosed when he paid a familiarisation visit to Mim Cashew & Agricultural Products Ltd. (MCAPL) in the Brong Ahafo Region.
Of the 12 existing cashew processing companies in the country, 11 have currently shut down operations — with only the Mim Cashew and Agricultural Products Ltd. still in business, but operating below its installed annual production capacity of 7,000 metric tonnes.
The cashew processing industry is bogged-down by a plethora of challenges: insufficient supply of RCN is the principal problem that has forced industries out of business. Shortfall in supply of RCN is the result of limited production in the country, as against higher installed processing capacity amidst excessive export of RCN. Ghana produces about 65,000mt/year while installed processing capacity is currently estimated at 70,000mt.
Until 2013, Ghana used to trade (export and processing) around 150,000-200,000mt of RCN per year — with the huge deficit supplement imported from Cote d’Ivoire through the borders. The Ivorian Authorities in 2013 banned export of RCN to Ghana via the border. The situation has since pushed the RCN price up by 166% from GH¢1.5 per a kilo to GH¢4, thus making it non-competitive for processors to buy.
Mr. Joseph Yeung, Managing Director-MCAPL who conducted the Trade Minister around the facility, said processing of RCN locally has enormous economic advantages to growth of the economy, especially employment creation and revenue generation.
According to him, the value of annual processed cashew kernels (21% of 65,000mt) is estimated at US$102million as against US$56million expected to be generated from that same quantum of RCN when exported. He added that on average, it requires at least 200 personnel to process 1,000mt/year.
Mr. Yeung prayed for quick intervention to save the “agonising cashew processing industry”, which he indicated must be done before the next cashew season beginning 2016 in order to avert further imminent job-losses and protect its rich revenue generation element as well; adding, “Any intervention aimed at protecting the processing industry must also take famers’ interests into cognisance”.
MCAPL was established in 2008 with an initial processing capacity of 300mt/year, and it increased its capacity to 7,000mt in 2014. The management of the company had planned to move some of its jobs to the community where they buy RCN as a way of improving the income in those communities where employment opportunities are hard to come by, but the challenging business environment has shattered that dream