Coronavirus crashes cashew prices, farmers in pain
Without Asia’s buyers due to the Coronavirus pandemic, local cashew farmers and dealers say they are left with no option but to sell their raw nuts at giveaway prices.
The cash crop has been a supreme contributor to the country’s Non-traditional Exports (NTEs) earnings over the years, topping the list of leading NTEs between 2016 and 2018. However, demand for cashew nuts has dipped during the current purchasing season which usually peaks in the middle of April, on the back of the COVID-19 induced global economic lockdown.
As a result, the price of cashew fell by more than 50percent from about GH¢8 per kilo to between GH¢3 and GH¢2 during its peak.
Although the price fall had been coming since last year, says Kwaku Adu, a farmer based in Wenchi in the Bono Region and Chairman of the Ghana Corporative Cashew Farmers and Marketing Association, the lack of foreign buyers, particularly from Asia and Europe and the absence of an entity to regulate prices, made the situation worst.
“The buyers mostly come in from the Asian countries but because of the pandemic, none of them came this year. So, we were not having buyers. Some of the farmers have no option than to sell at whatever price offered to them by agents.
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It is now selling as low as GH¢2 a kilo as compared to last year when it went for 3.5 per kilo during the peak season,” he told the B&FT over a telephone conversation.
Earlier last month, cashew farmers in the Tain District of the same Bono Region, sensing that prices could fall to below GH¢3 per kilo mark, demonstrated against the fall, but that has done little to arrest the situation, as a kilo now sells for about GH¢2.
Cashew’s remarkable performance over the past four years, particularly its contribution to NTEs, have had many experts talked of it as a potential competitor to cocoa in term of foreign exchange earnings, if given the need attention as cocoa.
In 2016, it raked in about US$197 million worth of export revenue, representing 53 percent of the US$371 million received from the total agricultural NTE sub-sector, while exports surged 43.84 percent to US$378.21 million in 2018 from US$262.95 million in 2017.
Renewed efforts to enhance growth and production of the crop in the last few years such as the introduction of a 10-Year Cashew Development Plan (2017-2027), the distribution of free improved cashew seedlings and training of producers, among others, were further expected to strengthen cashew’s contribution to the economy.
However, as Mr Adu puts it: “Because of this pandemic, everything is now on the line,” given that cashew is the leading NTE earner. The lower than expected prices presents the government – Ghana Export Promotion Authority (GEPA) – a big challenge of achieving its export target for this year and the over US$5 billion it is targeting by 2021, according to market watchers.