Raw cashew nuts await processing at a smallholder processing facility in Stung Treng province’s Siem Bok district on December 1, 2023. Hong Menea
In a bid to correct falling prices, the Cashew nut Association of Cambodia (CAC) issued a March 4 statement calling on its members to suspend raw cashew nut sales temporarily.
A combination of falling prices and the effects of the El Nino weather phenomenon are having a serious impact on cashew production in Cambodia.
CAC president Uon Silot explained that weather conditions of over 40 degrees Celsius could cause buds and flowers to fail, noting that earlier this year, the CAC had predicted a 10 to 30 per cent fall in cashew output for 2024, versus the 2023 figures.
“Even though the outputs are declining, we have seen unreasonably dramatic falls in the price of raw cashews. We are instructing our members to dry their unsold nuts, pending a better price in July or September, so that foreign traders cannot manipulate the market price,” he said.
“A lot of cashews were damaged this year, so prices should not have fallen. Where possible, farmers should dry their cashews, rather than sell them on a small scale in a way where they are forced to compete with other small-scale farmers. If they are going to sell, they should produce high-quality nuts and deal with large, well-established companies,” he added.
He explained, however, that Cambodia’s exports of raw nuts to Vietnam had increased in January by 50 per cent, when compared to the same period in 2023.
“The increase in exports was because CAC members who are brokers released the remaining stocks from late December last year. The cashew harvest season in Cambodia is mid-February,” he said.
“This did not come as a surprise. The declining output of the Kingdom’s cashews might have an impact on international markets later this year,” he added.
Silot said that in order to stabilise prices, the CAC has lobbied its members and other farmers to limit cashew cultivation to just 500,000ha needed for domestic supply and processing. Another 30 factories are needed, while Cambodia currently has only seven medium-sized factories.
“The processing capacity of a medium-sized factory is about 7,000 to 15,000 tonnes. Cambodia now has 35 smallholder processors, so we are seeking investment to convert these into medium-sized facilities,” he added.
Nok Bunthon, president of the Kampong Thom Cashew Association, supported the calls to counter the decline in prices.
“They have declined in value from 5,100 to 4,600 riel per kg. I might sell some of my cashews to offset my costs and dry the remaining nuts and sell them in the coming months. Prices might increase,” he said.
Top Vandy, president of the Kampong Cham Cashew Association, noted that output in the province had dropped from three or four tonnes to slightly more than one tonne per hectare. As cashews dropped in value, Vandy and some other farmers have decided to cut down cashew trees and plant cassava, because cassava prices are higher.
“As the new year began, cashews dropped in value, even though output fell drastically. One kg of raw nuts sells for just 4,000 riel. This year’s severe drought pulled down not just the yield, but the quality. Therefore, farmers are barely able to offset the costs of production,” he said.
He noted that association representatives will visit western Africa in mid-March. The African Cashew Alliance in Accra, the capital of Ghana, welcomed the visit and is keen to cooperate in the cashew business. During the visit, the two sides will discuss several topics, including informal meetings on climate change and the decline in cashew productions.
