IVORY COST-The Grouping of Cashew Industrialists (GTCI) has called on the executive to extend its support plan for local processing companies as a cushion from bankruptcy.
Ivory Coast is the world’s top cashew producer, with an annual production of about 1 million tonnes, and the crop is the second agricultural export product after cocoa.
Although the sector has generally shown good progress in terms of processing for several years, the dynamic is mainly driven by multinationals, mostly of Asian origin.
To boost local processing, the government started a support program last year costing 9 billion CFA francs (US$15 million) aimed at strengthening the competitiveness of domestic players against Asian multinationals.
Intended to run for one year, the program entailed increased subsidies to processors and the establishment of a guarantee fund to facilitate their access to bank financing through the National Investment Bank (BNI).
However, the GTCI wants the program to be extended to prevent the cashew nut processing companies from bankruptcy in 2023.
Talking to Reuters, the representatives said that the five local processors may cease their operations if the government will not come to their rescue because they are operating below capacity due to limited financial capacity compared to transnational entities.
Additionally, GTCI said that only a small percentage of cashew nuts is processed locally, as Ivorian processors have struggled to compete with Asian companies that pay higher prices for the raw nuts hence the current call.
“We have written to the Conseil du Coton et de l’Anacarde (CCA) for the aid and subsidies that the government granted us in 2022 to be maintained this season, otherwise we will not be able to continue our activities,” told Reuters, Constance Kouamé, General Secretary of the GTCI.
During the 2022 subsidy program, the processed volume of cashew nuts in Côte d’Ivoire increased by nearly 60% to 218,000 tonnes, or approximately 21% of total nut production according to GTCI officials.
The representatives are hopeful that if the aid is extended to 2023, they will be able to increase the production capacity to surpass the increase in 2022.
The officials also target to reach 40,000- 50,000 tons of raw cashew nut purchases to exceed 33,000 tons purchased during the financial aid in 2022.