Economic Analysis Of Processing And Marketing Of Cashew Products

Project and Seminar Material for Agricultural Economics and Extension

Economic Analysis Of Processing And Marketing Of Cashew Products


This study aims in identification of cashew products that can be utilized in cashew. This ranges from cashew nuts, apple and cashew nut shell liquid {CNSL}. It also tries to elaborate on the techniques used in the processing of cashew. Products and also ascertain the factors affecting the processing of the products in the study area. The problems encountered in the processing and marketing of cashew products were also studied. The study is based on the use of statistical tools for data analysis. These tools are the mean, percentages and tables. Marketing margin, marketing costs and net return to marketers where also obtained. The primary used were collected from 50 respondents through questionnaires. The results showed that products identified in the study area are cashew nuts, Apple or fruit, roasted nut and the cashew nut shell liquid (CNSL) which is extracted from the nuts which can be processed in many forms. The techniques of processing was though traditional or mammal means of open pan roasting which was the only processing method available in the area studied. The problem encountered in the processing and marketing of cashew products are under-utilization of the products, non-access to credit facilities, lack of good road networks and other social amenities, labor, finance, lack of storage system, non-access to credit facilities, lack of skill and non-access to the use of mechanized system equipment and instability to create efficient and effective marketing networks. Finally a recommendation was made that the processors should give access to credit facilities, mechanized system of processing and internationally accepted system of grading. Government should also provide basic amenities such as roads, power (light), markets, hospitals, water to take care of their social and economic needs.

Chapter One


1.1 Background of the Study

Cashew, known as Anacardium occidental is a native of Brazil and was introduced to Mozambique and then India in the sixteenth century by the Portuguese, as a means of controlling coastal erosion. It was spread within these countries with the aid of elephants that ate the bright cashew fruits along with the attached nut. The nut was too hard to digest and was later expelled with the droppings. It was not until the nineteenth century that plantations were developed and the tree then spread to a number of other countries in africa, Asia and Latin America.

(Herringtton and coulter,2004). Cashew processing using manual techniques, was started in India in the first half of the twentieth century. It was exported from there to the wealthy western markets, particularly the United States. In the 1960s some of the producing countries in East Africa began to process nuts domestically rather than sending them to India for processing. This allowed them to benefit from the sale of both processed nuts and the extracted cashew nut shell liquid. Cashew kernels are ranked as either the second or third most expensive nut trade in the United States. The four main producing regions in the world are India, Nigeria, Brazil and Tanzania. World production of cashew nut grew rapidly during 1950s and 1960s, reaching a peak of 624000 tonnes of raw nuts in 1973. Three countries India, Mozambique and Tanzania accounted for the majority of this production while smaller industries have developed in Brazil, Kenya and several other African countries.

There was a total decline in world production, which continued till 1980s (The clipper, 2004). The reason for the decline is due to the decreased production in Mozambique and Tanzanian, since production in Mozambique during the late 1980s and 1990s, production picked up and continued to increase gradually.(Jaffee and Morton,2006). In 2000, to be precise, world cashew production exceeds 1.2 million tones. Asia and Africa countries produced 0.6 million and 0.4 million tones respectively (Herrington and Coulter 2004). Africans overall production steadily increased during the 1950s and 1960s until mid 1970s when it was the prime producer of cashew nuts. Then, in 1975, the production started to decline throughout the continent due to combination of some factors based on biological, political and agronomic basis(Andrighetti et al,1998).

1.2 Problem Statement

Recent study found that cashews are well-known, popular and widely consumed by urban populations in Nigeria and West Africa at large. Though perhaps not everyday food, cashew kernels are a mature product in urban West African Markets associated with quality and luxury and widely available in urban settings. Indeed cashews may be consumed in certain upper-class segments of African society with greater frequency than in Europe or America due to a lack of wide range of substitution with similar associations. The semi – industrial faculties supplying the local market have relatively high fixed cost (in terms of building and equipment) and little consistency in their level of operational use.

Because the facilities are mostly run at reduced or seasonal production capacity and staff do not have sufficient training or systems to optimize productivity, the cost of operation are higher relative to export oriented faculties. The larger facilities often (but not always) have better access to financial and usually have acquired their working capital at better interest rates. As this study pointed out, most processors and/or roasters/salters distribute their products themselves. Given the small size of the factories and limited number of staff, distribution and marketing is not specialized or approached in a strategic or full-time manner.

Limited availability of packaging equipment and materials in the study area and relatively high prices drive up final product prices for ready to eat cashews. Prices are also high due to the low prices paid for broken nuts (if they are sold at all), which forces processors to charge higher prices for whole nuts. Broken nuts comprise 20 – 40% of production for most cashew processors. Cashew has many uses ranging from fruits known as apple to its nuts which is the kernel to the liquid known as cashew Nut shell liquid {CNSL}. The extraction of the nuts, notwithstanding, to the collection of the liquid from the apple and the extraction of the liquid from the CNSL makes for the full economic utilization of the products. Cashew processing and marketing in the study area have these major problems.

These includes the following The cashew apples are sold in the local markets resulting in under valuation of the products in monetary terms. And also cashew kernels are normally extracted by roasting which causes breakages during the cracking and thereby reduces the quantity when grading the cashew nut shell liquid {CNSL} is also wasted away in the process of roasting cashew production is seasonal and its produces only once in a year. Therefore, how can cashew products be properly utilized to reduce wastage and increase the economic value of all its products ranging from the nuts to the apple and also the liquid from the CNSL. How can one attain commercial ways of processing and marketing which will increase mass production for continental and global consumption. How can one acquire cashew processing equipment at affordable price.

1.3 Objectives of the Study

The broad objective of this study is to analyze through research in the production, processing and marketing of cashew products in the study area. The specific objectives are to:

  1. Identify the cashew products;
  2. Ascertain the techniques used in cashew products processing;
  3. Access the channels in which the product are marketed;
  4. Identify the problems of processing and marketing of cashew products and;
  5. Make recommendation based on the findings.

1.4 Significance of the Study

This research finding was chosen for Udenu Local Government area of Enugu State as a result of the abundance of cashew producers, processors and marketers in the study area. Cashew has diverse uses and its importance can not be over emphasized. Cashew nut is a popular snack, and its rich flavour means that it is often eaten on its own, highly salted or sugared. Trees are used in the control of coastal erosion. Cashew apple is eaten fresh which is high in vitamin. Dried cashew trees can also serve as fuel for cooking food. In addition, cashew nutshell liquid (CNSL), a by product of processing cashew, is mostly composed of anacardic acids.

These acids have been used effectively against tooth absceses due to their lethality to bacteria. These products need to be fully utilized for maximum production and minimize waste. Also this study will help to access the techniques used in the processing of cashew products and the grading system used in the standardization of products. The study also helps to know the products being processed and marketed in the study area. The marketing system available to them and also the economic value attached to the sales. Therefore, I hope that the study if carefully examined shall help in the utilization of cashew products as studied and analyzed through this research work.

1.5 Limitation of the Study

This study or researches were limited by many factors: firstly, the time allowed for this study was short compared to the volume of work requirement to bring out a comprehensive research work. Secondly, finance was one of the major factors to reach the respondents in their various locations in one way or the other requires some costs. Language barrier is another limitation. Many of the respondents were illiterate who could not read out the questions from the questionnaire.

Some of the respondents were also griped with fear and doubt about the genuineness of the research. The system of their measurement lacked appropriateness. For example, the products marketed or processed could not be accurately measured. All these really made the research face a lot of inconsistence in obtaining data. In spite of all these limitations, the work or result of this analysis is reliable, accurate and valid.

Chapter Five

5.0 Summary, Recommendation and Conclusion

5.1 Introduction

From the research methodology, randomly selected 50 respondents comprising of cashew processors and marketers were studied in Udenu Local Government Area. Out of the 10 communities, 5 respondents from each communities were chosen. Structural questionnaires was the main instrument used for the data collection for the study. Data collected were analyzed using statistical tool such as table, means and percentages.

The specific area covered in order to achieve the main objectives which includes: identification of cashew products, assessment of the processing techniques used in the study area to ascertain the socio-economic problems in the processing and marketing of cashew products. Evaluation of the performance of cashew products marketing systems on the basis of the volume of the operation of cashew products marketing systems on the basis of the volume of operation of cashew products marketers description of the marketers system, and performance of cashew products on the basis of marketing margin for all the participants in the system, as well as on the basis of net return to all cashew products marketers in the system.

5.2 Summary

The summary of the findings are as follows:

The greater number of the respondents involved in cashew product processing and marketing are within the youthful age of 31 – 40 years. Over half of the respondents have spent over 10 years in the processing and marketing of cashew products. In terms of sex, most of the processor are females as they engaged in open pan roasting but most men engaged in marketing of cashew nuts especially at wholesales. Most processors and marketers are men and also revealed that most of the processors and marketers have spent 6-12 years in the school (primary and secondary school) and few are tertiary.

Generally, the problems of cashew products processing and marketing are food safety standard, quality control and employee standard. But in the study are the major problem faced are the issue of under-utilization of the cashew products. Mainly cashew nut shell liquids (CNSL) from the nuts, the juice from the apple, and the apple itself as a result of absence of mechanized system of processing. Inadequate credit facilitation, assessment of large markets to maximize sales are the major problems while transportation efficiency, lack of skills and labour are other lesser problem.

5.3 Recommendation

The following recommendations have been proposed to improve processing and marketing of cashew products in the study area.

  1. Firstly, the government should create enabling environments for the processing and marketing of the products to flourish by building a quality road networks, supply power at the area, storage facilitations, water supply and other processing equipment need by man. All this suggestion will enhance productivity, efficiency and effectiveness in the overall utilization of cashew products.
  2. Secondly, the processors and marketers should be given access to credit facilities like loans with subsidized interest rate, grants and acts from the government and other donors. The machines for the processing should be supplied at the affordable prices.
  3. There is need for private, NGOs and government participation for investment in cashew products processing and marketing in the study area. This would lead to mechanized system of processing techniques like machine for roasting the nut, peeling, baking and transforming the nuts into many forms like the Apple wine and juice, cashew jambs, salted nut, baked nuts will also be utilized. The CNSL would also be extracted for local and international market.
  4. Finally there is need for wider market creation for the distribution and supply of all the products processed from the study area. An effective and efficient marketing networks.

5.4 Conclusion

The study examined has the socio-economic variables of affected in cashew processing and marketing in various degree. Data obtained and analyzed was by the use of questionnaire. All these variables investigated in the study area explained approximately their effects or influence in cashew products processing and marketing. Cashew products an useful to man as a result of their utility and potentials. The market is organized and competitive especially in international market where they compete with other useful edible nuts. The marketing where the cashew products has to be improve in the study area to utilize their economic value.

Therefore, all the participants, both the private investors and government should be involved and also contribute in their own ways to achieve the expected targets in the world global market.

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