30% of local cashews processed ‘by 2027’: CAC

The Ministry of Commerce on June 14 formally rolled out the policy, a key objective of which is to improve Cambodia’s capacity to produce, store, process, package, market, distribute and export cashew nuts and derived products as well as to compete on the global market in terms of quality and quantity to meet sustainability and economic diversification goals.

Additionally, it seeks to position the Kingdom as a major producer and supplier locally, regionally and globally.

According to CAC president Uon Silot, there are currently about 30 small- and three medium-sized cashew nut processing factories in operation – exclusively in Kampong Thom, Kampong Cham and Preah Vihear provinces. He suggested that at least 50 additional medium-sized facilities may be needed to meet the 30-per-cent goal by 2027.

The CAC reported that Cambodia exported about 600,000 tonnes of cashew nuts in 2019, 950,000 tonnes in 2020, 1.1 million tonnes in 2021, and 670,000 tonnes – to the tune of $1.077 billion – in 2022. The association noted that the 2021 figure was “approximately 24 per cent” of the global total.

This notably conflicts with statistics from the Ministry of Agriculture, Forestry and Fisheries, which put total production in 2022 at just 508,283 tonnes – just below the CAC’s export figure for the same year.

Nonetheless, raw and processed cashew nut exports came in at 471,520 and 1,557 tonnes last year, the ministry said, noting that the total area dedicated to cashew cultivation stood at 435,733ha in 2022, of which 330,861ha was harvestable.

Of note, processed cashew kernels in their final stage on average weigh only about 25 per cent of the raw seed weight, according to the CAC’s Silot. The CAC also reports that raw and processed cashew nuts currently cost around $1,500 and $8,000 per tonne.

The association estimates the area under cashew cultivation nationwide at about 700,000ha – roughly three-fifths more than the ministry – but warns that about a tenth of that is at significant risk of being cleared, mainly for the cultivation of cassava and other crops.

Silot opined that the national policy would be crucial for motivating farmers and investors to put in extra effort to grow and process more cashew nuts of higher quality and export greater quantities of prime finished goods.

“More than 90 per cent of raw cashew nuts have historically been sold by traders to neighbouring countries to be processed into finished products because there was no local market for them. The export of unprocessed seeds results in Cambodia losing out on millions of dollars in revenue,” he claimed.

“As domestic processing increases, not only will Cambodian cashews have greater value-added, but [producers] will also be able to earn more money from the sale of cashew shells used to make biodiesel and charcoal,” he said.

Silot was referring to cashew nut shell liquid (CNSL), a by-product from industrial processing that can be converted into a renewable, biodegradable and cost-effective biofuel, which is considered to be a greener alternative to petro-diesel. The biofuel too is often called CNSL.

About 100,000ha of land devoted to cashew trees have been cleared to plant other crops “in recent years” due to falling prices of the drupe seeds, he lamented.

In Lay Huot, owner of Chey Sambor Cashew Nut Processing Handicrafts in Kampong Thom province, is convinced that the national policy will improve the entire cashew nut production chain, from cultivation to maintenance, harvesting, processing and export.

She believes that the government will provide low-interest loans to actors in the cashew nut production chain in need of operating capital.

“Almost all [locally-grown] cashew nuts are now gathered and sold to Vietnam for processing into finished products, but with a larger market and more working capital, I believe that there’ll be greater opportunity to process them in Cambodia for sale to foreign markets,” she said.

According to the CAC, cashew trees usually reach maturity between five and six years of life and remain economically productive until the age of 25, except for the M10 and M23 varieties, which bear fruit from two years of age. On average, 1ha of trees produces 1.5-1.8 tonnes of cashew nuts per annum.

phnompenh post