COTE D’IVOIRE – Cashew Coast, Cote D’Ivoire’s agri-food company, has secured US$ 9.7 million in mezzanine debt financing from the UK-based investor AgDevCo.
This investment aims to double the company’s processing capacity to 19,000 tons and address some of the industry’s pressing challenges.
Côte d’Ivoire produces around 1 million tons of cashew nuts annually, but currently processes less than 30% of this output locally.
The government’s target is to increase this to 50% by 2025. Cashew Coast’s CEO, Salma Seetaroo, highlighted the significance of this investment, saying, “The funding provided by AgDevCo, as well as their expertise in African agribusiness, will help us achieve our company’s vision. We are very pleased to enter into this agreement and hope that this key milestone will make our company a model of business success that can be replicated elsewhere in Africa.”
Despite these ambitious plans, the industry faces a significant raw material shortage. The Cotton and Cashew Council (CCA) recently announced that Côte d’Ivoire’s cashew processors need an additional 60,000 tons of raw nuts to maintain operations smoothly in 2024.
This shortage threatens the goal of processing 25% of the national cashew production, which is expected to reach 1.25 million tons next year.
A recent meeting between the Ministry of Agriculture and industry stakeholders focused on the urgent need for raw cashew nuts.
Since the ban on raw cashew exports on May 7, local processors have struggled to secure enough supply. “When the suspension measure was taken, the export companies had already purchased all the cashew nuts available. The problem is still there and has not been solved,” explained an industrialist.
Exporters have offered to supply 30,000 tons of cashews to local processors. However, price disparities across different regions complicate this solution.
According to industry sources, exporters’ prices for a kilo of cashew nuts are significantly higher than the market prices in Korhogo and Bouaké. This disparity raises concerns about who will bear the additional costs.
“The prices offered by exporters for a kilo of cashew nuts are 95 to 115 CFA francs [US$ 0.15 to US$ 0.18] more expensive than the market price in Korhogo and 80 to 100 CFA francs [US$ 0.13 to US$ 0.16] more expensive than the market price in Bouaké. Who will pay this additional cost demanded by exporters?” questioned another industrialist.
These challenges highlight the complexities of achieving the government’s ambitious processing targets. Ensuring a steady supply of raw materials at competitive prices is crucial for the sustainability of local processors.
Cashew Coast, which employs 750 people and sources from over 7,000 farmers, is optimistic about the future.
The company’s investment in new storage warehouses and programs to improve farmers’ productivity are seen as vital steps toward strengthening the local cashew industry.
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