The Cambodian government together with nongovernmental organisations (NGOs), the private sector and farmers are joining hands to develop the cashew industry by establishing a Cambodia Cashew Federation (CCF) to commercialise the sector internationally.
The ministry of Commerce (MOC), Ministry Agriculture, Forestry and Fisheries (MAFF), Cashew Association of Cambodia, cashew nut processing company Santana and Swiss NGO HEKS/EPER Cambodia gathered last week to discuss the establishment of the Kingdom’s cashew federation to integrate the sector into the international market.
The establishment of the CCF aims at having a national-level coordination and support body to promote Cambodia cashews in both production and marketing aspectsin the interest of local producers, processors and exporters, according to a statement.
“Cambodia has a competitive advantage in the production of high-quality cashew nuts. There is an opportunity to commercialise, diversify and integrate the sector into the international market,”
the statement read. “The primary constraints to the development of the sector are in the production-extension, added-value, commercialisation, sector-organisation and export-process areas.”
Va Rothsan, the president of the Council of the Ministry of Commerce, said the cashew sector has mainly contributed to Cambodia’s economic development and having the cashew federation will make the sector more effective.
“It help to increase farmer’s revenue, reduce poverty in rural areas and the government has prioritised it first among another 19 crops because it has more potential in developing, processing, exporting and adding value,” he said.
The government is now pushing the cashew policy and the draft on the policy is nearly complete, according to Rothsan. He said the draft on cashew policy will be approved by Prime Minister Hun Sen in the first quarter of next year.
Based on an estimate included in the HEKS/EPER Cambodia Cashew Nut Value Chain Assessment Report in 2019, Cambodia has become a leading cashew producer in recent years and will rise to be the fifth largest producer in 2021.
The report shows that Cambodian cashew nuts produced mainly by smallholders (78 percent of cashew farms are less than five hectares in size) achieve high yields compared with farmers elsewhere.
However, the country sells the vast bulk of its crop – more than 95 percent of raw cashew nuts – to Vietnam.
Rothsan said the lack of infrastructure, warehouses, high electricity prices, laboratory services, difficulty in obtaining credit, poor regulation implementation, lack of market awareness and research and lack of experience in value-added processing are the biggest challenges facing the sector.
Currently, there are only four commercial processors active in Cambodia and seven cashew communities. The combined processing is estimated at around 3,000 tonnes of raw material in 2019. However, with installed machinery, the processors have the capacity to process up to around 25,000 tonnes per year.
Suy Kokthean, deputy and business manager of the Cashew Association of Cambodia (CAC), said the federation will help farmers regarding the price and will also attract investment into processing factories.
“We will be able to compete in the international market. We have an FTA [free-trade agreement] with China and our products will enjoy the benefits from the agreement and will attract more investors,” he said.
Kokthean said currently CAC has nearly 2,000 active members nationwide and, in Kampong Thom alone, the farming land is about 100,000 hectares, providing around 100,000 tonnes of the crop a year.
“The challenge is that we export fresh cashew nuts to Vietnam but recently we sent some to China, India and Japan so it is a good sign for our cashew sector as well,” he said. “We have local processing handicrafts and, after forming the federation, we hope to transform those handicrafts into processing factories.”
According to the figure from the Ministry of Commerce, global cashew nut output amounted to more than 3.7 million tonnes, of which the whole of Africa accounts for 56 percent, India 22 percent, Brazil 4 percent and Southeast Asia 18 percent. The report shows Vietnam ranks number three and accounts for 9 percent while Cambodia stands in sixth place and accounts for 5.25 percent.
However, Vietnam is the world’s largest cashew nut processing country, amounting to 1.77 million tonnes, followed by India at 1.55 million tonnes.
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