In June this year, the Cambodian Ministry of Commerce introduced the National Policy on Cashew 2022–2027, a bold initiative aiming to position Cambodia as a leading nation in cashew production, processing, and exportation. This all-encompassing policy is crafted to boost cashew production, stimulate the establishment of processing facilities, and stimulate exports by implementing programs for market diversification and trade facilitation. The overarching vision is to increase Cambodia’s cashew processing capacity from the current 5% to 25% by 2027 and an ambitious 50% by 2032.
Cashew National Policy 2022–2027
The unveiling of the National Policy on Cashew 2022–2027 signifies a crucial juncture in Cambodia’s cashew industry. This meticulously crafted policy aims to catalyze significant transformations by augmenting cashew production, implementing cutting-edge processing facilities, and broadening market horizons. Anticipations for a substantial surge in Cambodia’s processing capacity are on the horizon by 2027, reflecting the impactful trajectory set by this well-considered initiative.
Cashew Processing Plants
Currently, Cambodia takes pride in hosting around 30 small-scale cashew processing plants and three medium-sized facilities situated in provinces such as Kampong Thom, Kampong Cham, and Preah Vihear. However, meeting the 2027 targets necessitates the establishment of a minimum of 50 new medium-sized processing facilities. These facilities play a crucial role in elevating the nation’s domestic cashew processing capacity to the desired scale.
Collaborative Projects
A noteworthy development involves the collaboration between the local enterprise Chey Sambor Cashew Nut Processing Handicrafts and Japanese partners. This joint venture encompasses the construction of a new processing plant in Kampong Thom province. Scheduled to commence in October, the facility is projected to become operational by early 2024. The primary objective of this initiative is to augment processing capacity by integrating advanced machinery, with the potential to double the existing capacity.
Quality and Pricing
In recent years, Cambodia has experienced an enhancement in the quality of raw cashew nuts, leading to increased prices. Prices have risen from $1,200 per metric ton in 2022 to $1,500–1,700 this year. However, the market price for processed cashews has witnessed a decline, with the average per-kilogram price standing at $6.5, reportedly falling below production costs. According to industry experts, a fair price should be at least $8 per kilogram to adequately cover expenses.
Challenges Faced
Despite the positive strides, Cambodia’s cashew industry has encountered challenges. The downturn in market prices has resulted in a reduction of cashew farming areas by approximately 100,000 hectares, as some producers are opting for alternative crops. In 2022, cashew plantations covered around 700,000 hectares, as reported by the Cashew Association of Cambodia (CAC).
Global Export Trends
Cambodia’s cashew exports have experienced fluctuations in recent years. In 2019, the country exported 600,000 metric tons, followed by 950,000 metric tons in 2020 and a further increase to 1.1 million metric tons in 2021. However, exports declined to 670,000 metric tons in 2022, primarily attributed to adverse weather conditions that negatively impacted output.
Export Destinations
The primary destinations for Cambodia’s raw cashew exports are Vietnam, Japan, and China, with Vietnam accounting for nearly 95% of the country’s total exports. On a global scale, the total cashew nut harvest reached approximately five million metric tons in 2021. Cambodia emerged as the leading producer with 24%, followed by the Ivory Coast at 22%, India at 16%, and Vietnam at 8%.