Ivory Coast cashew processors urge govt to renew support

FE Team | Published: February 24, 2024 23:18:35

ABIDJAN, Feb 24 (Reuters): Cashew nut processors in Ivory Coast have asked the government to renew a subsidy agreement, warning of bankruptcy if support for the struggling sector is not forthcoming, according to a letter seen by Reuters.
Ivory Coast, the world's largest cocoa producer, has also become a leading grower of cashew nuts in recent years, but only a small percentage of its nuts are processed locally as firms face steep competition from deeper-pocketed Asian exporters.
The Ivory Coast Cashew Industry Group (GTCI), which represents five cashew processors with capacity to process 41,000 tonnes per year, appealed to the government in a letter at the end of December seen by Reuters this week.
It asked for the renewal of an arrangement with the state that guaranteed raw cashew nut supplies of up to 20% of the GTCI's processing capacity at the start of each season.
With the 2024 processing season imminent, the GTCI said its members were at risk of going bankrupt without support.
"All we are asking is to be able to renew the agreement for the next 4 years," the letter said.
It also asked for compensation for losses of around $7.5 million linked to supply chain issues "so that we can relaunch our activities".
For the past two years, annual state support to the cashew sector has amounted to around 10 billion CFA francs ($16 million), according to a government source.
The GTCI's request is still being considered as expensive cashew and cocoa subsidies are straining public funds, said another source at the finance ministry, speaking on condition of anonymity.
Ivory Coast, which produced 900,000 tonnes of raw cashews in 2023, plans to process 50% of its output by 2026 through tax breaks and government subsidies, according to the sector regulator, the Conseil du Coton et de l'Anacarde (CCA).
To support the industry, which is also recovering from the impacts of the COVID-19 pandemic, processors are exempt from paying import taxes on equipment and export tax on processed cashews.
Around eight Ivorian cashew processors have gone bankrupt since 2020, according the GTCI.
The cashew season usually runs from February to June. It officially starts once the government has set a guaranteed minimum price for cashew farmers, which has not yet been set for this year.