Ivory Coast Cashew Processors Urge Government to Renew Subsidies Amid Bankruptcy Fears

Cashew nut processors in Ivory Coast have urged the government to renew a crucial subsidy deal, warning that the sector faces imminent bankruptcy without continued support. The appeal comes as new data released on Wednesday showed that only 22% of the country’s cashew output was processed locally in 2023. 

Ivory Coast: A Cashew Powerhouse Facing Processing Challenges 

Ivory Coast, the world’s largest cocoa producer, has also emerged as a leading grower of cashew nuts in recent years. However, despite this growth, local processors are struggling to compete with well-funded Asian exporters, resulting in most of the raw cashew output being shipped overseas for processing. 

The Ivory Coast Cashew Industry Group (GTCI), representing five major cashew processors with a combined capacity to process 41,000 metric tons per year, issued a letter to the government in December 2024 requesting a renewal of the supply agreement. The letter, seen by Reuters, emphasized the need to guarantee raw cashew supplies amounting to 20% of GTCI’s processing capacity at the start of each season to keep their operations viable. 

Urgent Plea for Renewed Subsidy Agreement 

“With the 2024 processing season approaching, our members are at risk of bankruptcy without government support,” the letter stated. “All we are asking is to renew the agreement for the next four years.” 

For the past two years, the government has provided annual support worth around 10 billion CFA francs ($16 million) to the cashew processing sector, according to a government source. However, rising costs and competing demands for subsidies in the cocoa sector have strained public funds, making it uncertain whether the government will extend the support. 

A finance ministry source, speaking on condition of anonymity, indicated that the GTCI's request is still under consideration, highlighting the financial constraints facing the government due to the expensive subsidies in both the cashew and cocoa sectors. 

Rising Cashew Production, Falling Farmgate Prices 

Agriculture Minister Kobenan Kouassi Adjoumani announced that Ivory Coast’s cashew production is expected to increase by 5% in 2024, reaching 1.25 million tons. However, despite this rise in output, local processing remains low, with only 265,863 tons processed locally in 2023, equivalent to just 22% of total production. 

Exports of raw cashews surged to 849,250 tons in 2023, up from 719,900 tons in 2022, with 81% of the exports going to Vietnam and 18% to India. 

Despite government efforts to boost local processing, including tax breaks and subsidies, the sector remains vulnerable. Since 2020, at least eight Ivorian cashew processors have gone bankrupt, according to GTCI data. 

Government’s Ambitious 2026 Processing Target 

Ivory Coast has set a target to process 50% of its cashew output by 2026, driven by tax exemptions on processing equipment and export taxes on processed cashews. However, achieving this goal remains challenging amid rising competition and limited financial support. 

Drop in Farmgate Price 

Compounding the difficulties for the cashew sector, the government announced that the farmgate price for cashews has been reduced to 275 CFA francs ($0.4557) per kilogram for the 2024 season, down from 315 francs per kilogram last year.

Future of the Ivorian Cashew Industry Hinges on Government Decision 

As the 2024 cashew season approaches, the future of the Ivorian cashew processing sector hangs in the balance. The government’s decision on whether to renew the subsidy agreement will determine whether local processors can survive the growing competition from global exporters and help Ivory Coast achieve its ambitious processing targets.