The cashew nut processing sector in Cambodia urgently requires increased investment to unlock its full potential. Given the nation’s ample supply of raw cashew nuts, Cambodia is well-positioned to emerge as a prominent global producer of processed cashew nuts. However, the existing deficiency in investment hampers the realization of this potential. Investors are crucial to facilitate the implementation of modern technologies and the acquisition of equipment for large-scale cashew processing in the country.
Vietnam receives 85% of Cambodia’s raw cashew exports.
Cambodia benefits from favorable natural conditions for cashew tree cultivation. However, the absence of local processing facilities results in the export of the majority (80-85%) of Cambodia’s raw cashew nut production to Vietnam for further processing into finished cashew kernels. Vietnam has become Cambodia’s primary trading partner in the cashew industry. Consequently, the Cambodian government has recently demonstrated a heightened commitment to fostering its cashew processing sector. Initiatives such as tax breaks for investors establishing processing factories aim to attract foreign investment and enhance the country’s processing capabilities.
Cashew is among the 12 priority crops identified by the Cambodian government.
The Cambodian government has recently endorsed the “Draft National Policy on Cashew 2022-2027,” signaling a commitment to fortifying the cashew product industry on both domestic and international fronts. The primary objective of this policy is to position Cambodia as a major producer and supplier of cashew products by fostering a more competitive landscape for production and marketing. As one of the 12 priority crops emphasized by the Cambodian government, cashew is promoted to encourage farmers to diversify their crops and enhance their income. The implementation of this policy is anticipated to elevate cashew’s significance within the country’s agricultural sector, generating more employment opportunities and bolstering the overall economy.
The Ministry of Commerce in Cambodia has conveyed its positive outlook on the future of the cashew industry in the country. Emphasizing that the recently approved policy will offer crucial assistance to cashew farmers and processors, it is expected to establish a framework for sustainable growth within the industry. This initiative aligns with the broader governmental agenda to foster the development of the agricultural sector, recognizing its potential as a pivotal economic driver for Cambodia. With government support, cashew farmers and producers can anticipate a promising future, bringing benefits not only to their individual endeavors but also contributing to the overall prosperity of the nation.
Cashew growing area in Cambodia 2009 to 2023
Over the past decade, Cambodia has witnessed substantial growth in cashew cultivation, as reflected in recent agricultural statistics. Commencing in 2009, the acreage dedicated to cashew cultivation experienced a remarkable expansion, surging from 66,513 hectares to an impressive 800,000 hectares by the year 2021.
However, this upward trajectory faced a setback. The pervasive impact of climate change, a global phenomenon affecting various regions, has also made its mark on Cambodia. In 2022, the expanse of land allocated for cashew cultivation contracted to 700,000 hectares, attributing this reduction to the adverse effects of climate change. While still a noteworthy figure, this decrease represents a reduction of 100,000 hectares from the peak cultivation area.
What stands out about this surge in cashew cultivation is the remarkable pace at which it unfolded. Over the span of 2009 to 2021, the land area devoted to cashew cultivation experienced an astonishing twelvefold increase from its initial size. Although the rate of expansion has tapered off in the most recent year, the overall trend of robust growth and expansion within this industry remains promising.
The cashew nut industry in Cambodia is in need of increased investment.
In March 2023, during his visit to Pursat province, Cambodia’s Prime Minister, Hun Sen, expressed his ambition for Cambodia to emerge as the world’s leading supplier of cashew nuts. Addressing an audience of over 300 families in Pursat province, he underscored the importance of increased investment in cashew processing infrastructure and its supporting facilities.
Despite Cambodia currently having the highest cashew nut yield globally, realizing this potential necessitates additional investment in processing to transform raw nuts into finished products suitable for global export. It’s worth noting that cashew nuts hold popularity in the realms of healthy living, veganism, and tourism.
Uon Siloth, President of the Cashew Nut Association of Cambodia, acknowledges the Prime Minister’s appeal for investments in the sector. He is optimistic that this message will inspire investors to explore opportunities in cashew nut processing. Recognizing the substantial potential of the cashew nut industry, Siloth believes that investing in this sector holds the promise of a lucrative return. The Prime Minister’s endorsement is expected to position local raw cashew processing investment as an attractive and viable option for potential investors.
