Senegal’s cashew industry struggles amid high prices and low yields in 2024
SENEGAL – Senegal’s cashew processing sector has hit severe challenges in 2024, with local companies struggling to keep up with surging raw material prices and a significant drop in cashew production.
A severe heat wave earlier this year devastated Senegal’s cashew production, leading to a massive decrease in output.
Farmers saw losses ranging from 60% to 70% due to high temperatures during the crucial flowering period, according to Boubacar Konta, president of the Senegalese Cashew Interprofession.
“Fields of cashew trees that would usually yield a ton of fruit ended up producing less than 200 kg,” Konta explained, stressing the economic impact on local processing companies.
This drop in output has pushed up raw cashew prices, spurred by intense competition between local processors and international buyers, primarily from India and Vietnam.
“Senegal has one of the best nut qualities in West Africa,” explained Pierre Ricau, an analyst with N’kalô, “so buyers are willing to pay premium prices.”
By mid-year, local prices for raw cashews had tripled compared to the previous season, from an average of 300-400 CFA francs per kilogram to nearly 1,000 CFA francs.
The financial strain has led several cashew processing plants to temporarily shut down or operate with limited capacity. Elimane Dramé, Director General of the Local Products Marketing Company (SCPL) in Ziguinchor, noted that local factories cannot afford the high prices and still profit.
“Indians can buy at those prices because they have a large domestic market,” Dramé pointed out. “For us, it’s just not possible.”
Jacques Seck, CEO of Ethicajou in Kolda, echoed this, stating, “We aimed to process 300 tons of organic cashews, but we only managed to acquire 24 tons by the end of the season.”
Ethicajou’s factory is now closed until next year, having laid off its staff as it awaits a more favorable season.
Other operators, like Société d’Exploitation des Produits du Terroir (SEPT), have also cut back, with operations slowed or halted entirely as they are unable to compete in the volatile market.
Unlike other countries in West Africa, Senegal has no formal government support policy for the cashew sector. Neighboring nations, such as Côte d’Ivoire and Benin, provide subsidies to bolster local processing.
Senegal’s lack of similar support has left the industry vulnerable to price hikes and limited supply, causing serious repercussions for companies and workers alike.
According to Konta, discussions are underway between the Cashew Interprofession and the Ministry of Industry and Trade, with hopes of establishing more supportive policies.
Some industry experts, like Dramé, suggest that applying an export tax on raw cashews could help fund local processing facilities.
Abdoulaye Ndiaye, a finance manager at SEPT, proposed a processing bonus, similar to the one Côte d’Ivoire offers to boost local processing.
“Even if the Senegalese government cannot offer the same level of support, they could still implement policies that strengthen the local sector,” stated Ricau, suggesting that even small changes might provide much-needed relief.
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Senegal’s cashew industry struggles amid high prices and low yields in 2024
SENEGAL – Senegal’s cashew processing sector has hit severe challenges in 2024, with local companies struggling to keep up with surging raw material prices and a significant drop in cashew production.
A severe heat wave earlier this year devastated Senegal’s cashew production, leading to a massive decrease in output.
Farmers saw losses ranging from 60% to 70% due to high temperatures during the crucial flowering period, according to Boubacar Konta, president of the Senegalese Cashew Interprofession.
“Fields of cashew trees that would usually yield a ton of fruit ended up producing less than 200 kg,” Konta explained, stressing the economic impact on local processing companies.
This drop in output has pushed up raw cashew prices, spurred by intense competition between local processors and international buyers, primarily from India and Vietnam.
“Senegal has one of the best nut qualities in West Africa,” explained Pierre Ricau, an analyst with N’kalô, “so buyers are willing to pay premium prices.”
By mid-year, local prices for raw cashews had tripled compared to the previous season, from an average of 300-400 CFA francs per kilogram to nearly 1,000 CFA francs.
The financial strain has led several cashew processing plants to temporarily shut down or operate with limited capacity. Elimane Dramé, Director General of the Local Products Marketing Company (SCPL) in Ziguinchor, noted that local factories cannot afford the high prices and still profit.
“Indians can buy at those prices because they have a large domestic market,” Dramé pointed out. “For us, it’s just not possible.”
Jacques Seck, CEO of Ethicajou in Kolda, echoed this, stating, “We aimed to process 300 tons of organic cashews, but we only managed to acquire 24 tons by the end of the season.”
Ethicajou’s factory is now closed until next year, having laid off its staff as it awaits a more favorable season.
Other operators, like Société d’Exploitation des Produits du Terroir (SEPT), have also cut back, with operations slowed or halted entirely as they are unable to compete in the volatile market.
Unlike other countries in West Africa, Senegal has no formal government support policy for the cashew sector. Neighboring nations, such as Côte d’Ivoire and Benin, provide subsidies to bolster local processing.
Senegal’s lack of similar support has left the industry vulnerable to price hikes and limited supply, causing serious repercussions for companies and workers alike.
According to Konta, discussions are underway between the Cashew Interprofession and the Ministry of Industry and Trade, with hopes of establishing more supportive policies.
Some industry experts, like Dramé, suggest that applying an export tax on raw cashews could help fund local processing facilities.
Abdoulaye Ndiaye, a finance manager at SEPT, proposed a processing bonus, similar to the one Côte d’Ivoire offers to boost local processing.
“Even if the Senegalese government cannot offer the same level of support, they could still implement policies that strengthen the local sector,” stated Ricau, suggesting that even small changes might provide much-needed relief.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.