In a significant development, the international market has devalued the quality of Ghanaian cashew, resulting in a consequential reduction in the commodity’s prices both domestically and globally.
This shift in market dynamics poses challenges for stakeholders in the cashew industry, raising concerns about the economic impact on producers and the overall trade outlook.
The Chief Executive Officer of the Tree Crop Development Authority (TCDA), William Agyapong Quaittoo, states that this phenomenon has consequently led to the country’s decline from the second position in West Africa in terms of cashew quality to the third position.
Mr. Quaittoo attributes the downgrade to a decrease in the country’s cashew price per tonne, plummeting from US$1,080 to US$880.
Ideally, nuts of premium quality should exhibit a firm and crunchy texture, avoiding any undesirable softness or mushiness. This is crucial as the texture of the nut plays a significant role in shaping the overall eating experience.
Nevertheless, this is the prevailing scenario in the local cashew market. A majority of nuts available are reported to be excessively soft, indicating suboptimal storage conditions, potentially resulting in a loss of flavor and nutritional value.
Remedy and mitigation strategies
As part of processes to retrieve quality cashew production and encourage farmers to pursue best practices, government through the TCDA, as a short-term strategy, has set a GH¢7 price per kilo for all cashew purchases across the country.
The price, which is for the 2024 crop season, is a downward review from the GH¢8.5 per kilogramme at which the commodity was sold in the previous year.
Mr. Quaittoo made the announcement at a meeting with cashew farmers and buyers in Bono East Region about the price drop, and said the downward review of price is part of plans to create a market for farmers and producers despite current challenges.
“Per calculations using the current formula, a kilo this year is supposed to be sold at GH¢6.76; but government has decided to round the figure up to GH¢7,” he disclosed.
Other factors for the price drop
The Ghanaian currency’s value, according to the TCDA CEO, also played a significant role in the downward review of price.
However, the Authority maintains there are indications that the price could see an upward adjustment within the first quarter of this year – but only if the quality of cashew improves.
Meanwhile, the TCDA is finalising processes to train farmers and other stakeholders, as well as regulating traders in the cashew industry to improve quality.
Ghana is among the top exporters of cashew in West Africa, with about 350, 000 metric tonnes of Raw Cashew Nut (RCN) expected to be exported in 2024.
Last year, the TCDA confirmed that the World Bank has granted a US$100million facility to boost production and improve the value chains of cashew, coconut and rubber.
The facility is a partnership with the government under a six-year funding initiative known as the Tree Crop Diversification Project.