Cashew Exporters Seek Cuts in Raw Nut Exports

At present, Cambodia has 472,946 hectares of cashew cultivation. Photo: Chhum Chantha

PHNOM PENH – The Cashew Nut Association of Cambodia aims to reduce raw nut export by up to 70 percent but the lack of domestic processing facilities remains a hurdle, says its president. 

Uon Silot said that in the first four months of 2024, Cambodia exported about 500,000 tonnes, of which up to 90 percent went to Vietnam. 

The strong reliance on Vietnam is due to Cambodia not yet having  enough capacity for its own processing.  

Silot said some local enterprises still lack capital to buy raw materials for processing while they find it difficult to get favorable loans from banks due to lack of infrastructure. This forced farmers to sell fresh nuts to Vietnam, leaving only 10 percent for local processing.

The association has set a goal to reduce the export of cashew nuts to foreign markets, especially Vietnam, by 70 percent as the country has potential to increase investment, given the large harvest of between 600,000 and 800,000 tonnes a year and high-quality nuts such as M23.

“Currently, 90 percent of Cambodia’s cashew nuts continue to flow into foreign markets, especially Vietnam, as local enterprises are still facing a lack of capital to buy raw materials stockpiled for processing,” he said. 

“In fact, we have a clear goal to reduce exports in line with the national policy on cashew 2022-2027. Some banks have also provided preferential interest rate financing to some enterprises. But those enterprises are not ready yet, so their loans aren’t moving.”

He said Cambodia needs at least 35 medium-sized processing factories.

There are 45 facilities across the country but only six medium-sized enterprises. Enterprises also need funds for post-harvest infrastructure such as warehouses and drying fields. 

Silot said $329 million is needed to develop cashew processing infrastructure in five years in accordance with the national policy while human resources are also required. 

As part of its strategy, the association also aimed to transform cashew farmers into agri-business people so that they can process semi-finished cashew nuts for sale to investment companies. 

The association has persuaded some companies to buy shells from farmers to produce bio-oil. 

Three large companies are now buying semi-finished products from farmers. A factory processing cashew shells into oil is under construction in Kampong Thom province.  Three kilos of cashew nuts can produce one kilo of oil.

Silot said the ability to make semi-finished products will help reduce exports and provide more benefits to farmers through contracting-agriculture while creating jobs.

Last year, Cambodia exported 656,000 tonnes of cashew nuts, down 7.6 percent on the year before.  Revenue fell further, by 16.9 percent.

In particular, 618,000 tonnes were exported to Vietnam. At present, Cambodia has 472,946 hectares of cashew cultivation.

Originally written in Khmer for ThmeyThmey, this article was translated by Torn Chanritheara for Cambodianess.

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