The value of Ghana’s Non Traditional Export (NTEs) is likely to reduce significantly this year in part due to continuous delays in Vietnam in selling off its existing cashew nuts stock to China due to the impact of the novel corona virus infections.
China imports around 10 percent of global cashew nut production for consumption which is mostly supplied by Vietnam – which imports most of its cashew nuts from Ghana, Ivory Coast and some other countries.
Ghana’s 2018 NTEs statistics which saw a significant growth performance of 10 percent over 2017 was largely due to a 43.84 percent increase in exports of cashew nuts – mainly exported to Vietnam – from US$262.95 million in 2017 to US$378.21 million in 2018. The increase in value of cashew exports alone to Vietnam amounted to US$115.26 million.
With the effect of the corona virus that has impacted heavily on all business activities, this implies that Vietnam still has some existing stocks in hand for disposal before importing new cashew nuts from Ghana.
Over the last few weeks, the price of cashew has decreased on the world market as producers and traders move to sell existing stocks. This has resulted in the slowdown of cashew trade as Vietnam begins looking for alternative markets aside China, since this year’s crop was ready for bulk shipments in February from both Ghana and the Ivory Coast.
In effect, trade experts have insisted that if Vietnam expects a slow market in China, the country will also be slow to buy raw cashew from Ghana. Vietnam has recorded more than 35 cases of the coronavirus after new infections from Europe.
Since Ghana’s NTEs sector recorded a blip in 2016, recording earnings of US$2.46 billion as compared to 2015 figure of US$2.52 billion, earnings in every year since then have seen a marginal increase over the previous year. For instance, the sector recorded US$2.56 billion, US$2.813 billion in 2017 and 2018 respectively.
With the impact of the coronavirus disease that has impacted heavily on international trade forcing many countries to issue business and trade restrictions, it is anticipated that the entire earnings in the NTEs sector will seriously be affected, most especially goods meant for export outside the continent.
Speaking with the Goldstreet Business, Director of Projects at Ghana Export Promotion Authority (GEPA), Mr. Alexandar Dadzawa noted that since Vietnam processes cashew to the tertiary level, some impact will be felt in the sector. However, measures are being looked at in order to curtail any possible major impact.
“It wouldn’t be immediate, but it also depends on the intensity in the respective countries”, he added.
Producers of cashew nut in West Africa are poised to become a dominant force in the global cashew value chain. In recent years, there have been a significant increase in the number of domestic processors investing in mechanized processing to improve quality, reduce costs of production and reduce the export of raw cashew, which currently stands at 90 percent of total export.
Discussion about this post