Bangladesh out to cash in on cashew nut

With growing local demand and export opportunities, farmers in different districts of Bangladesh are increasingly lurching toward cashew nut farming, abandoning other crops.

Many farmers in hilly areas once considered cashew nut trees a hazard mainly due to their lack of demand, but the situation changed in recent years as they could realise the drupe’s commercial values.

Several industries have developed in the country to cash in on the business potential of cashew nut as processors claimed that international buyers tend to prefer its Bangladeshi variety due to its high quality and taste.

With people becoming more health-conscious, the demand for the nutritious seed is also increasing in the domestic market, encouraging farmers to grow cashew nuts.

Currently, the annual local consumption of cashew nuts is over 1,300 tonnes, where local farmers can supply about 300 tonnes and the rest is imported, said Abdus Salam, general secretary of The Cashew Growers Processors and Exporters Association of Bangladesh (CGPEAB).

The local market size of cashew nuts is about Tk 250 crore to Tk 300 crore, while the market is growing 25 to 30 per cent yearly, said industry insiders. Around 10,000 people are directly involved in the sector, they added.

The local production has been increasing in the last few fiscal years. According to the Department of Agricultural Extension (DAE), the country produced 1,462 tonnes of cashew apple in FY 2020-21, which was 1,323 tonnes in FY20.

The cashew apple is the common name of cashew fruit from which seed is separated. The apple is used for producing juice, wine, compost fertiliser, environment-friendly mosquito coil and animal feed.

The DAE data said 90 per cent of cashew apples are produced in the Bandarban district and the rest are produced mostly in Rangamati and Khagrachhari districts presently. In FY21, Bandarban farmers produced 1,323 tonnes of the cashew apple, up from 1,283 tonnes in FY20.

As per the DAE data, 2,842 farmers are involved in growing cashew apples in Bandarban.

MM Shah Newaz, the DAE deputy director (in-charge) of Bandarban, said they recently planted 1,676 more trees in the district.

“The farmers are coming to this sector as it is more profitable than other crops. We believe the country will soon see a boom in cashew nut farming considering its export potential,” he said.

Bangladesh earned $1,53,827 in FY21 from cashew nut export, according to the Export Promotion Bureau. DAE data show that cashew nuts are cultivated on 2,000 hectares and the government is working to bring 6,000 hectares under cultivation by 2025 to increase production to meet the growing local demand. 

Factories spring up to process cashew nut

The increased production saw at least 12 factories set up across the country, including a few in far-flung Nilphamari and Panchagarh districts to process cashew apples.

The factories, where about 300 tonnes of cashew nuts are processed annually, employ hundreds of people, mostly women. Some factories are even exporting cashew nuts to the United States.

Mominul Islam, director of Jackpot Cashew Nuts Industries in Nilphamari, said they are producing seven tonnes of nuts monthly in the factory, employing 70 people, mostly women.

Due to the high quality they maintain, Mominul claimed, they got an export opportunity to the USA and exported a small quantity of cashew nuts through a third party.

Mominul said that they also got an opportunity to export cashew nuts to France, Australia, Spain and countries in the Middle East but could not take this opportunity due to lack of enough cashew apples. 

CGPEAB General Secretary Salam said Bangladesh is unable to produce the byproducts from cashew apples due to the absence of advanced technology.

“Hopefully, by 2022 our factories will also be able to produce the byproducts from cashew apple such as juice, wine, compost fertiliser, and environment-friendly mosquito coil,” he said.

Production to start countrywide

While cashew nut cultivation in the past was limited to the Chittagong Hill Tracts, DAE officials said it was gradually expanding to other areas.

Cashew nut cultivation has spread to 16 other districts - Cumilla, Chattogram, Panchagarh, Dinajpur, Rangpur, Sylhet, Tangail, Narsingdi, Mymensingh, Sherpur, Jashore, Chapainawabganj, Rajshahi, Pabna, Bogura and Natore.

DAE said this year it planted 80,000 seedlings in over 1,000 acres across the country. DAE officials hoped that cashew nut production would reach 1,500 tonnes once the newly planted trees started bearing fruits. 

The government last year took a project titled “Cashew Nut, Coffee Research, Development and Expansion” involving Tk 211.84 crore. DAE will
implement the five-year project by
June 2025.

Salah Uddin, deputy director of the DAE Sylhet office, said they trained 240 farmers in the district and six gardens had been set up for growing cashew nuts.

“The farmers expect to harvest cashew apples in four years,” he said.

Export of cashew nut apple

Industry insiders said Bangladesh could not fully benefit from growing cashew nuts due to the lack of capacity of the local manufacturers and policy support.

Local factories can process only 30 per cent of cashew apples produced in Bangladesh and the rest are exported to India and Vietnam.

As a result, Bangladesh is still import-dependent on processed cashew nuts.

According to the National Board of Revenue, Bangladesh spent Tk 100 crore in cashew nut import in FY17, Tk 130 crore in FY18, Tk 110 crore in FY19, Tk 131 crore in FY20 and Tk 140 crore in FY21.

Tarekul Islam, owner of Kishanghor agro factory in Bandarban, said that they cannot buy a large amount of cashew apples due to the absence of loan facilities.

So, a significant portion of cashew apple gets exported to other countries and Bangladesh ends up spending hard-earned foreign currency to import processed nuts, he said.

“If we are offered a duty-free facility and bank loans, we can import cashew apple,” he said.

It will save our foreign currency as well generate employment in the country, argued Tarekul.

Shahidul Islam, Project Director of Cashew Nut, Coffee Research, Development and Expansion project, said that once their project was completed, it would meet local demand and create export opportunities.

“We are offering training to the farmers and are also planning to send them abroad to learn cashew nut farming. We are supplying seedlings to farmers free of cost to boost production. Hopefully, the country will see a positive result in three years,” he said.

DAE data show that cashew nuts’ global production is 59 lakh tonnes, and Vietnam alone produces 26.6 lakh tonnes.

Exporters seek cash incentive

Although the Bangladesh Bank announced to provide a 20 per cent cash incentive for exporting agricultural products and fruits, cashew nut exporters alleged that they were not included under the facility before 2019.

Recently, NR Merin General and General Services, a cashew nut exporter, applied to the commerce ministry for a cash incentive of Tk 36 lakh against the export of raw cashew nut from 2014 to 2015.

Its proprietor Nur Mohammad said cashew nut is an agricultural product but they were not initially considered for the incentive facilities announced by the Bangladesh Bank. He hoped he would soon receive the incentives.

CGPEAB’s Salam said they are getting the facility after years of effort.

“India and Vietnam are the leading raw cashew nut importers and exporters. They offer duty-free import but we have to pay 37.5 per cent in tax and other duties for import. We must be provided with duty-free facilities to secure a good position in the global market,” he said.