Australia is supporting efforts to expand Cambodia’s domestic cashew processing industry through a new partnership to increase value-added production, create jobs, and enable the country to retain more economic value from one of its key agricultural commodities. In a social media post on Friday, the Australian Embassy in Phnom Penh stated that Cambodia is the world’s second-largest producer of raw cashew nuts, but processes only around 5 percent of its total production domestically. The embassy estimated that limited domestic processing results in more than $125 million in potential annual revenue losses while leaving farmers and businesses exposed to fluctuations in raw cashew prices. To address the gap, Australia is partnering with Olam Food Ingredients (OFI), a global agribusiness company with an estimated 20 and 25 percent share of the global cashew market. The partnership aims to expand Cambodia’s processing capacity to 80 tonnes per day and mobilise up to $10 million in investment in the domestic cashew processing sector. “Australia is committed to attracting quality investment that creates jobs and supports businesses, helping Cambodia build a stronger economy,” the embassy added. The initiative comes as Cambodia continues to export large volumes of raw cashew nuts, particularly to Vietnam for processing. According to the Cashew Nut Association of Cambodia (CAC), Cambodia exported around 1.03 million tonnes of raw cashew nuts during the first half of 2026, generating approximately $1.75 billion in export revenue, up 28.9 percent from the same period last year. Despite the sector’s strong export performance, CAC President Uon Silot has warned that policy and investment barriers could undermine efforts to expand domestic processing. He said the suspension of Qualified Investment Project (QIP) incentives for companies operating outside designated Cashew Industrial Parks (CIPs) has created uncertainty for investors. He also warned that progress in establishing the industrial parks has been slow, while the QIP suspension has continued for nearly two years. Silot further said that these policy challenges have contributed to a sharp decline in Cambodia’s domestic cashew processing rate, which fell from around 12 percent in 2023 to just 2.5 percent in 2025. “Expanding domestic processing is essential if Cambodia is to move beyond its role as a major raw-material supplier and capture a larger share of the value generated by the global cashew industry,” he said. Silot added that the Australia-backed initiative is therefore expected to provide more than additional processing capacity. It could also serve as a catalyst for investment, technology transfer, job creation and sustainable value addition throughout Cambodia’s cashew supply chain. It may be recalled that earlier this year, Commerce Minister Cham Nimul met with Gaurav Patil, Senior Vice-President and Country Head of Olam Food Ingredients (OFI) Vietnam, to discuss expanding investment and cooperation in Cambodia’s cashew processing sector. OFI, part of Singapore-based Olam Group, has operated in Cambodia since 2017 through Olam Outspan (Cambodia), investing in the processing of cashew nuts and other agricultural products. Patil said the company plans to increase investment in cashew processing, citing Cambodia’s stable economic and political environment. He also proposed closer cooperation with the MoC to develop mechanisms supporting greater processing and diversification of Cambodia’s agricultural products. Nimul welcomed the company’s investment plans and reaffirmed the ministry’s commitment to supporting the sector. Cambodia has about 700,000 hectares of cashew plantations across 10 provinces. The country earned $1.5 billion from raw cashew exports in 2025, up 30 per cent year-on-year. The government is accelerating plans to establish the country’s first dedicated cashew-processing industrial park in Kampong Thom province. Covering nearly 600 hectares, the initiative aligns with the MoC’s vision to transform Cambodia into a leading global cashew producer.