Cashew nut processors in Ivory Coast have called on the government to renew a subsidy agreement, warning of bankruptcy if support for the struggling sector is not available, as data released on Wednesday showed just 22% of production was processed locally in 2023.
Ivory Coast, the world’s biggest cocoa producer, has also become a top producer of cashew nuts in recent years, but only a fraction of its nuts are processed locally as companies face stiff competition from Asian exporters with greater resources.
The Ivory Coast Cashew Industry Group (GTCI), which represents five cashew processors with capacity to process 41,000 metric tons per year, appealed to the government in a late December letter seen by Reuters this week.
He requested the renewal of an agreement with the State that guaranteed the supply of fresh cashew nuts of up to 20% of GTCI’s processing capacity at the beginning of each campaign.
With the 2024 processing season imminent, GTCI said its members were at risk of going bankrupt without support.
“All we ask is to be able to renew the agreement for the next four years,” the letter said.
Over the past two years, annual state support for the cashew sector has amounted to around 10 billion CFA francs ($16 million), according to a government source.
GTCI’s request is still being considered as costly cashew and cocoa subsidies are straining public funds, said another Finance Ministry source, speaking on condition of anonymity.
Cashew nut production is expected to increase to 1.25 million tonnes this year, around 5% higher than in 2023, Agriculture Minister Kobenan Kouassi Adjoumani told journalists on Wednesday.
Last year, Ivory Coast exported 849,250 tonnes of cashew nuts, compared to 719,900 tonnes in 2022, he said, adding that 81% of exports went to Vietnam and around 18% to India.
Adjoumani said 265,863 tonnes were processed locally in 2023. This represents just 22% of production.
Ivory Coast plans to process 50% of its production by 2026 through tax incentives and government subsidies, according to sector regulator CCA.
To support the industry, processors are also exempt from paying import taxes on equipment and export taxes on processed cashew nuts.
2024-02-21 23:45:52