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Investor narrates woes in Kenya’s cashewnut sector



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Bobby Thomas, director of Wondernuts Ltd, a cashewnut processing firm based in Kilifi county, has dealt in cashew for 20 years. Today, he sits in his office whiling the time away because business has been so bad.

While he will not quit – yet – he says sometimes he has had to close down for long periods because of lack of raw material for his 5,000-tonne factory.
He is lucky to process 2,000 tonnes a year.

Meanwhile, he has a skeletal staff left from an original 800-strong workforce, thanks to the continuing dwindling of the subsector.

He and the other processers have been operating below capacity for over a decade because of lack of raw nuts.

Kwale, Kilifi and Lamu counties, which were once vibrant cashew producers, have a scattering of ageing trees that have seen the best of their time.

A tree census done in 2013 by Nuts and Oil Crops Directorate (then Kenya Coconut Development Authority), found two million cashew trees at the time, with 156,000 households directly depending on the crop for subsistence.

Today, cashew farmers are few and far apart. In many places the trees are neglected and look like they one growing in the wild.

The collapse of the crop has left farmers seeking other revenue streams and the processers in limbo.

“Sometimes we operate for two months and then close because, for the past seven years, production has gone down. For the past one year, we have only been able to process 2,000 tonnes,” Mr Thomas said.

“It is unfortunate that I have had to send some of the workers home, and it is unsettling to see them go, as they have families that depend on them; but we have no choice,” Mr Thomas said.

He said that as the years have gone by and the scarcity of the cashew persisted, his tonnage has been dwindling, leaving him with heavy operational costs.

“Our biggest market has been the US and Europe but we have no raw materials. The local market is too small,” he said. A kilogramme of cashew in the local market is Ksh100 ($1). That has also discouraged farmers, as the global price continues to rise to the region of $8, buoyed by the recent move by Tanzania to stockpile the produce.

Mr Thomas traces the problems to the neglect of the subsector by the government and a consequent abandonment by farmers.

Most trees are over 30 years old and are disease-ridden, affecting production and quality.

The head of horticulture and industrial crops research at the Kenya Agricultural and Livestock Research Organisation (Kalro), Francis Muniu, says the current cashew trees in the coast region are ageing and cannot meet the required production to sustain economic growth.

“The trees are old and can no longer produce. However, at Kalro, we have new varieties that farmers have taken up and we believe that in a span of about three years, the story will change,” he said.

Kalro has issued about 400,000 seedlings to farmers in the region.

Mr Thomas also cites the powder-mildew disease that has ravaged the crop with little intervention from the government.

“We are losing a lot of money by operating the factory because we have to pay salaries,” he said.

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Kenyan Digest