Guinea-Bissau stands as one of the leading cashew nut producers in West Africa, alongside Côte d’Ivoire, Nigeria, and Benin.
In the country, the cashew sector accounts for approximately 90% of export revenue and provides income to 80% of the population.
In 2023, cashew nut production in Guinea-Bissau reached 260,000 tons, marking an 8.3% increase compared to the previous season’s 240,000 tons, as noted in the World Bank’s annual report on the Economic Situation of West Africa published on May 16.
Despite this year-over-year production growth, exported volumes remained stagnant at 170,000 tons, compared to a stock of 171,000 tons the previous year. The financial institution attributes this situation to high levels of smuggling to neighboring countries such as Senegal and Guinea, which affected the remaining harvest.
“The poor export performance is partly due to weak demand and international prices, as well as a shipping container monopoly at the start of the season, which drove up container prices and led to high levels of smuggling to Guinea and Senegal to avoid additional costs,” the report states.
According to the World Bank, low international market prices resulted in a decrease in production prices, which did not exceed 150 Fcfa/kg in some regions for most of the season and remained below the government’s set threshold of 375 Fcfa/kg.
Favorable Outlook for the Sector in 2024
However, authorities anticipate an improvement in production in 2024, owing to favorable weather conditions and the government’s support program for farmers.
The World Bank predicts that exports should also improve significantly with the authorization of exportation through nine border routes, whereas previously only exports via the port of Bissau were allowed. The financial institution also notes that disruptions related to Houthi attacks in the Red Sea could create growth opportunities in Guinea-Bissau.
“Maritime disruptions in the Middle East have led to higher freight costs between Asia and Europe, resulting in increased demand for cashew nuts from Africa. This disruption allows for a premium of $0.2 to $0.3/kg over Vietnamese-origin cashew nuts on spot contracts.
Despite maritime trade risks, Chinese companies are expected to enter the processing market in Asia, competing with India and Vietnam for Bissau-Guinean cashews, thereby creating new trade links,” the report highlights.