The leading developing country supplying cashew nuts to Europe is Vietnam, followed by India. The Netherlands is the third largest supplier, but re-exporting cashews. In 2017, Vietnam reached its highest ever export value of cashew nuts to Europe at €887 million, nearly €205 million more than in the previous year.
Honduras and Indonesia have also been growing their shares of the European market at average annual export growth rates of 40% and 50% respectively in the past five years. However, the export volume of those two countries is still very small.
West African countries, especially Ivory Coast, are important suppliers of in-shell cashew nuts to Vietnam, India, and to a much smaller extent Brazil. Only 10% of African-grown raw cashew nuts are processed, i.e. shelled, locally. There have been many attempts at trying to revert this pattern and increase the share of locally shelled cashew nuts in Africa. In spite of often counting with the support of development aid aimed at increasing the value of Africa’s cashew exports, these efforts have had limited success.
Processers in India especially have significant advantages over African shellers. India has a strong domestic cashew nut market, where lower grades are readily accepted, thus increasing the overall sales value. Africa as a whole does not have such a big internal market and the low grades (broken, scorched, small grades) have less demand in Europe as well. India also has a very competitive environment for cashew shelling and long experience, both of which lead to great efficiencies and very high output ratios of whole nuts.
While labour costs are increasing in some states of India, especially on the west coast, the industry is adapting by moving the shelling process to the states with cheaper labour in the east. Now that Vietnam has the highest productivity of cashew farms in the world, the competition in the shelling market has even increased further.
This competitive gap between African and Asian cashew shellers is expected to persist, but major producers in India, Vietnam, China, Brazil and European companies are investigating and investing in medium and large-scale processing units in the major African production areas. Whether or not these initiatives will succeed, Africa is also expected to remain a major origin for cashew growing and to increase its participation in the market. Among the 20 leading external cashew nut suppliers to Europe, Guinea had the most significant annual export growth in the last five years at 170%, followed by Honduras (50%), China (49%), Mozambique (41%) and Indonesia (40%), all of which have very small market shares.