Guinea-Bissau sold some 96,117 tons of cashew nuts to overseas buyers last year, according to a report released on Friday by the Guinean Trade Ministry. The report said cashew exports increased by 2,791 tons in 2007, or 3 percent, compared to the forecast growth of 10 percent. This was due to lower than expected cashew production. The official report "recognizes the failure of the cashew campaign with the reduction of cashew prices to 50 CFA Francs per kilo while the correct price was the 200 CFA Francs per kilo set at the launch of the campaign last April."
Guinea’s trade ministry called for new techniques of cashew drying, packaging and storage to be introduced for the next growing season to boost production of the cash crop. It also said the government should establish fair prices at the opening of the cashew campaign. Most of Guinea’s cashew crop, more than 100,000 tons, is exported to India. More than 250,000 Guinean families are dependent on cashew farming and 98 percent of Bissau Treasury revenues come from production and export tariffs.
Guinea is the world’s biggest exporter of unprocessed cashew, the biggest African producer of the nut and the world’s fifth largest. Cashew plantations are spread over 175,000 hectares in Guinea and these areas are growing by 4 percent yearly.
The you-don’t-say moment of the story: Relying too heavily on a single crop can be dangerous (and scary). Here’s an October analysis of the World Cashew Market with Guinea-Bissau in mind. It’s from IRIN, via Reuters:
"The potential social impact of the current cashew season is not encouraging." Cashew prices are depressed with farmers selling cashews at between 75 CFA francs (US$0.16) and 50 CFA francs ($0.11) per kilogram, the report said.
The government's recommended price this year was 200 CFA francs ($0.43) per kilogram.
The cashew harvest this year was good with an estimated 94,000 tonnes of cashew nuts exported to date, which already exceeds last year's exports of 73,400 tonnes. Not only is the international price of cashews down, but the dollar is down against the euro which has further decreased the amount Guinea Bissau's farmers get for their product. The former Portuguese colony's currency is fixed to the euro while the price of cashews is set in dollars.
Farmers used to get about 250 CFA francs ($0.53) per kilogram for their cashews which was roughly equal to the price of a kilogram of imported rice, and so they bartered one for the other.