Register now for FREE and unlimited access to reuters.com
ABIDJAN, Dec. 13 (Reuters) – Cashew processors in Côte d’Ivoire are bankrupted by Asian exporters buying up all local supplies, thwarting a government plan to boost the sector, sources said of the company.
Five Ivorian processing companies have gone bankrupt and closed factories in the past two years, while four others are struggling and have significantly reduced their activities, according to interviews with business leaders.
Ivorian cashew processors have previously said they need more government support and protection against competition from deeper-pocketed Asian buyers, who pay higher prices to control supply. in raw cashews.
Côte d’Ivoire, the world’s largest cocoa producer, produces around 1 million tonnes of cashews per year and aims to process half of them locally by 2025. Currently, only around 100,000 tonnes of cashews are processed. in the country each year, and less than 25,000 tonnes by Ivorian-owned companies.
The government offers companies a bonus of 400 CFA francs ($ 0.68) for each kilogram of processed cashew nuts they export, but this has not been enough to keep them in business.
“We cannot compete with the Asian factories despite the state subsidy, especially Vietnam which buys all the supply, leaving the Ivorian processing factories empty,” said the boss of a company which has reduced its activities. a few months ago due to a lack of raw materials. cashew nut.
TNT, a Vietnam-based processor, declined to comment. Independent buyers working for TNT said it was more profitable to export raw nuts and process them in Asia due to the high costs of electricity and labor in Côte d’Ivoire.
One of the most promising Ivorian factories, CASA, declared bankruptcy in November, laying off 1,200 workers.
“We have closed our business due to difficulties in the industry,” CASA plant manager Hussain Gilani told Reuters.
To resolve the supply problem, Ivorian processors said they wanted CCA, the cashew nut marketing board, to put in place a priority sales system for Ivorian businesses and stabilize prices.
The CCA declined to comment, but an inside source said it was working to find solutions to these issues.
“The subsidy for Ivorian companies should be increased to 610 CFA francs ($ 1.04) per kg of processed nuts if they want us to survive. Otherwise, it’s over, ”said another company director.
($ 1 = 584.3400 FCFA)
Report by Ange Aboa; Editing by Nellie Peyton and David Evans
Our standards: Thomson Reuters Trust Principles.