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  • Cashew sector/CCA supply program: national processors put at a loss, a 3rd consecutive year

    Apr 18th, 2024

    Ivorian cashew processors continue to struggle in the face of strong competition from Asian exporters and the absence of bank financing. These national processors had, however, placed all their hope in the raw walnut supply program of the Cotton and Cashew Council (CCA) which was supposed to allow them to overcome the absence of bank financing and to have access to raw nuts against Asian exporters.

    As a reminder, this program implemented since 2022 by the government involves the CCA delivering 20% ​​of their raw walnut requirements to Ivorian processors at the start of the season. By pledging this stock of raw nuts received from the CCA, called seed stock, the processors themselves purchase their remaining requirements.

    Unfortunately, it is clear that this ambitious government program will again experience a resounding failure in 2024 as in 2022 and 2023, due to the failures of the CCA. 

    Indeed, almost two months after the opening of the raw cashew nut purchasing campaign, only six national processors out of a set of fifteen factories pre-selected for this program, began to receive raw cashew nuts from of the CCA. For these six factories benefiting from the CCA supply program, to date the stock received from the CCA represents overall less than half of the volume expected under the seed stock (a total of 14,000 T for these six factories). 

    The nine other national factories currently have no visibility on a probable delivery of the CCA. Among these nine factories, the pill is very bitter for five new national investors (ECOCAJOU, CICOA, AIC, GEPPA INDUSTRIES, CABEL) who had bet everything on this supply program, especially since being new, they do not suffer from no debt to the CCA. 

    With this very slow delivery rate, or even non-existent for nine factories, while the campaign is inexorably drawing to a close, with quality deteriorating over time, the national factories will not be able to cover the rest of their needs and will be constrained again this year to operate in sub-activity and therefore at a loss. 

    According to all stakeholders, the CCA is struggling to deliver the seed stock, which represents for the fifteen companies in reality only 26,000 T, or 2% of national production, due to the CCA's failure to pay. Indeed, the CCA is experiencing cash flow tensions due to its poor financial health. 

    This situation of failure of CCA deliveries is causing enormous harm to national processors who have only accumulated colossal losses for three years, without the slightest sign of a better tomorrow.

    Domestic processors are currently going through a period of alarming distress. They must not only face the global cashew crisis which has created structural losses, without receiving subsidies as was the case in India and Vietnam, and also face the losses caused by the dysfunction of the CCA program.