Minister asks cashew sector to address processing challenges
Minister asks cashew sector to address processing challenges
In a discussion with cashew investors at the Ministry recently, Agriculture Minister Dith Tina laid emphasis on the dire need for more processing facilities in the sector.
The Minister of Agriculture, Forestry and Fisheries was interacting with the cashew community on Tuesday and he acknowledged the shortcomings in the industry holding the Kingdom back from cashing in on its high-quality cashew nuts in the export markets of China and Europe.
The minister emphasised the country’s need in particular for high-quality value-added exporters to benefit not only the farmers but companies as well. The minister mentioned other agricultural products with great promise including mango, banana, yellow sugarcane, rubber and rice, which require advertising for marketing and exports.
He added that it is a priority policy programme to promote the modern farming community to help companies tie up with the producers through contracts. Additional support would be forthcoming from the Ministry to ensure that the process runs smoothly, successfully and generates genuine benefits to all stakeholders.
Lack of the processing facilities is not the only challenge for Cambodia’s cashew nut sector, said Suy Kokthean, Vice President, Cashewnut Association of Cambodia (CAC). Shortage of skills, labour and infrastructure, as well as financial access are equally important.
“CAC is now planning for a national cashew event called ‘The King of the Golden Cashew’ for which we will invite national and international stakeholders to join. The purpose is to promote Cambodian cashew nut to international investors,” Suy added.
The lack of the number of proper processing facilities is by far the biggest obstacle in reducing the nearly 90 percent of Cambodian cashews processed in Vietnam, said Francois-Xavier Richard Choquette, Managing Director, Aidens Cashews. This happens for several reasons including the limited and lack of enthusiasm from investors, the lack of collectives around the cashew growing regions who can leverage their quality cashews to be processed here, and the inability of those who could process properly to obtain bank loans without collateral.
Processing or deshelling capacities in Cambodia are increasing, said Andreas Groetschel, Founder and Owner, Kamya AgriTrade. It is still only a small fraction of what would be required to process all Cambodian raw cashew nuts (RCN), but processing all Cambodian RCN in the country is not something that is a viable business. Not at the moment and probably neither in the long term.
Investment in processing equipment is only a small part of the financing required by processors. Installing a processing capacity of 20,000MT a year is an investment that is “manageable”.
However, operating such a facility requires access to working capital in the magnitude of roughly $40 million.
In addition to efforts to attract foreign investors, it is imperative for the government to implement a comprehensive cashew policy plan aimed at bolstering the capacity of local processors, said Sothnita (Cashew) Seoun, Head of Business Development for Handcrafted cashew Nuts Stung Treng. This approach will not only benefit the cashew industry but also contribute to the overall development of the country’s agricultural processing sector.
It is important for the government to support the development of community warehouses and new-style agricultural cooperatives in local regions, said Takayuki Imahashi, Business Planning Officer, Mirarth Agri Tech Co Ltd. These initiatives can enhance storage capacity, reduce post-harvest losses, and improve market coordination.
The Royal Government of Cambodia should provide financial support and incentives to cashew farmers and manufacturers. It also needs to invest in infrastructure, develop processing facilities, promote exports and market access and support agriculture cooperatives and farmers.
