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Cambodia Seeks To Increase Processed Cashew Exports

August 13, 2023

In June of this year, the Cambodian Ministry of Commerce formally introduced its National Policy on Cashew 2022–2027, which aims to transform Cambodia into a major cashew producing, processing and exporting country. The government’s main goals include boosting cashew output, developing processing facilities and fostering exports through market diversification and trade facilitation programs. Following the adoption of the policy, the country’s processing capacity is anticipated to rise from the present 5% to 25% by 2027 and to at least 50% by 2032.

According to Uon Silot, president of the Cashew Nut Association of Cambodia, over 90% of Cambodia’s raw cashew nuts are sold by traders to neighboring countries for processing into finished products. Cambodia currently has approximately 30 small-scale cashew processing plants and three medium-sized plants in the provinces of Kampong Thom, Kampong Cham and Preah Vihear. At least 50 new medium-sized facilities are expected to be needed to increase domestic cashew processing capacity and meet the 2027 target.

One of the ongoing projects is the construction of a processing plant by the local enterprise Chey Sambor Cashew Nut Processing Handicrafts in collaboration with Japanese partners. The facility will be built in Kampong Thom province, with work set to commence in October and expected to be finished in early 2024.

The main goal of Chey Sambor’s project is to expand its processing capacity by adding new machinery. With the current equipment, the company can process between 60 and 100 metric tons of nuts monthly. After the project is completed, the processing capacity is anticipated to double.

According to Lai Huot, owner of Chey Sambor, this year’s raw cashew nuts are of greater quality than those harvested in 2022, with prices climbing to $1,500–1,700 per metric ton from $1,200 last year. Meanwhile, the market price for processed nuts remains on the decline. The average price per kilogram is currently $6.5, which is reportedly less than the cost price. Lai believes that the right price should be at least $8 per kilogram to cover production expenses.

Because of the low market prices, the area used for cashew farming in Cambodia has shrunk by around 100,000 hectares, with producers opting to cultivate other crops instead. The CAC estimates that this year’s cashew plantations covered approximately 700,000 hectares.

Cashew nut exports from Cambodia reached 600,000 metric tons in 2019, 950,000 metric tons in 2020, 1.1 million metric tons in 2021 and 670,000 metric tons in 2022. Last year’s dip in exports was attributed to a decline in output as a result of adverse weather.

The top three export destinations for raw cashews from Cambodia are Vietnam, Japan and China, with the first receiving nearly 95% of all exports. According to data from the CAC, around five million metric tons of cashew nuts were harvested worldwide in 2021, with Cambodia producing the most (24%), followed by the Ivory Coast (22%), India (16%) and Vietnam (8%).

Image: Pixabay

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