Gains on global cashew prices have jumped by 85 per cent in the past two years and Nigeria is gradually tapping into the windfall. Prices have increased from $750 per metric tonne in 2015 to $1,800/MT in 2017.
Nigeria exported 4,444MT of cashew in the first quarter, earning N2.4bn or $8m at the market value of $1,800/MT. This, it was learnt, increased dramatically by the second quarter of the year to 25,555.5MT. Nigeria’s earnings subsequently rose to a record high of N13.5bn ($44.2m). Several factors have been attributed to the improvement in the performance of cashew and other agro exports. The government, towards the end of 2016, had embarked on an aggressive investment to boost the agricultural sector.
Farmers were encouraged to plant improved cashew seedlings with higher yields. Along with other initiatives by the Federal Government that targeted farmers with fertilizers and other materials.
The result was an increase in the local production of cashew crops.
According to the National President, National Cashew Association of Nigeria, Mr. Tola Faseru, 25,000MT has been added to the cashew production this year, bringing it to 175,000MT annual production from the former figure of 150,000MT.
Faseru explained that improvement in packaging and other practices had increased the value of Nigerian cashew. He said that whereas people preferred to price Nigeria’s cashew very low in the past, the crop was now being reckoned among the top valuable offerings along with other countries.
He said, “Our insistence on the abolition of the use of propylene bags in packaging cashew and settling for the use of jute bags improved the quality and market value of the cashew.
“The problem with the former packaging system is that it caused the crop to retain moisture and moisture is not good for cashew.”
Faseru added that he had advised exporters on proper drying methods, which led to some firms investing in drying facilities.
In the finance sector, the Central Bank of Nigeria relaxed its export proceeds repatriation policies and in April, created a special investors/exporters’ foreign exchange window.
Whereas the export repatriation policy mandated exporters to sell their proceeds at the official exchange rate, the investors/exporters’ window opened an avenue for them to exchange their money at an amount that is almost as high as the parallel market rate.
At the investors/exporters’ window, dollar currently exchanges for N360, about N55 higher than the official exchange rate of N305.
The government had positioned cashew as one of the strategic crops that would fetch Nigeria foreign exchange from the non-oil sector.
According to the Chief Executive Officer of the Nigerian Export Promotion Council, Mr. Segun Awolowo, a lot of investment has gone into building capacity for exporters and boosting the export of cashew and other crops.
The agency has also ‘midwifed’ the revival of the suspended Export Expansion Grant, an incentive that helps reduce some of the cost incurred by exporters. It was suspended in 2014 following allegations of widespread abuse.
Faseru is confident that with increased production volume and better farming methods, storage and packaging methods, and incentives for farmers, Nigeria will be able to realise her aim of earning foreign exchange from the non-oil sector.