Cashew Nut Business and How to Start it in Nigeria

Cashew nut business

Cashew Nut business is a good business to invest in. It is a nice and easy-going business in Nigeria.

Whenever you carryout any transaction, you are sure of a good dividend in return.

Nigeria is among the countries that export Cashew nuts, selling mostly to countries like India and Vietnam, and she is making it big in her cashew nut exportation.

India do not produce cashew nuts but they are leading both in the import and export of cashew in the world.

Their free trade agreement with Asian countries has made it possible for them to be on the lead.

Asian countries would prefer to do business with India rather than buy directly from Africa because Africa lacks import duty tariff.

They do this because it makes things very easy for them.

There are two ways you can do cashew nut business.

Either as a supplier – when you buy directly from farmers and supply them to distributors or to cashew nut companies in Nigeria. The second way you can do cashew nut business is by exportation. You can export directly to foreign buyers.

Cashew Nut business is growing that is why many people are now venturing into it. There are terms to meet in other to function in this business.

Variables used to determine the quality of cashew nuts for export

What qualifies a product for export is quality specification. To export any commodity to other countries you have to be hygiene minded, which means the produce must be hygienic.

Therefore, cashew nut must be free from any impurities, (chaff, sand etc) as well as any foreign matters, and must be well dried. Cashews should be neatly packed to look attractive to buyers.

Below are what determine the value and price buyers place on the products which they may be willing to settle with.

1. Nut counts

This is the total number of raw cashew nut in 1kg bag. This number is between 170-230 counts. 170 is regarded as the best quality while 230 is taken to be a poor quality.

Cashew Nuts are sold in tons. 13 bags make one ton while 30 tons make a full truck load. To avoid being cheated, you must learn how to scale and grade your cashew nuts before packaging then for sell.

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NUTS COUNTS BY GRADE

  • 230 and above -poor
  • 210-220 – below average
  • 200-210 – average
  • 190-200 – good
  • 180-190 – very good
  • 170 – Excellent.

Most buyers especially foreign buyers prefer nut counts between 170-200. Nuts count differ from place to place in Nigeria.

For example, in Kogi state, nut count is between 190 and 210, in Kwara state, 190 and 205, in Nasarawa state, 200 and 210.

Some states are known to have the best nut counts. Ogbomosho in Osun state for example is said to have the best nut count, no wonder cashew nut dealers prefer to buy nuts from this area.

2. Kernel Output Ratio (KOR/out turn)

In Nigeria, the quality of cashew nuts kernel output ratio (KOR) is between 42-54. The nuts are priced and negotiated according to their quality.

People use the ignorance of other people to cheat on them, this happens more in buying and selling. This is why you must learn how to determine the quality of cashew nuts KOR to avoid being cheated.

Not every nut is totally good, you still get some bad nut among the good ones.

KOR means the total number of useable kernels gotten after de-shelling the nuts. It can also be seen as the quality of good nuts from 8kg of raw cashew nuts.

For every one bag of raw cashew nuts, out-turn or KOR is scaled in Ibs.

This is equivalent to pounds, so the count is in pounds.

  • 43 – 45 Ibs is good
  • 48 – 53 Ibs is excellent.

Any count less than 43 Ibs is considered as poor grade and are rejected most times.

Samples are drawn from 30% of the commodity sent for sell to check for quality of nuts.

3. Moisture content

You should dry your cashew nuts to the lowest minimum moisture of 6° – 7°.

Though some buyers do manage 10° of moisture content, it would be advisable to reduce it before bagging and loading your cashew for storage or before supplying so that they won’t be rejected.

4. Defective nuts (faulty buts)

These are nuts that are spoilt. They were not dried or stored properly.

These nuts are attacked by fungi disease because of the moisture content inside them. You notice this fungi on cashew nuts when you see a black or yellow spots on the cashew nuts.

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The maximum moisture acceptable by foreigners is between 8 – 10 degree celsius. Other faults may occur as a result of improper packaging, empty nuts, shrink or deficient nut as a result of premature harvest.

5. Foreign matters

These are impurities found in cashew nuts when harvested. The unwanted particles are most times packed alongside cashew nuts for supply. They ranges from stones, sand, sticks, leaves etc.

The highest unwanted particles that can be accepted by buyers is between 10%.

6. Packaging

Cashew Nuts are packaged in a jute. This jute bag is sold at the rate of N350.

This can also determine the price of your cashew nuts because you will calculate the jute you bought as part of your expenses.

Haulage

This is the stage where you transport your goods to the point of sell. It is another expenses you will make which may also determine the price of your cashew nuts when you add it to your expenses. This is because the amount you pay for haulage can affect your profit.

It is better to calculate beforehand the cost of transporting your cashew nuts from the point of purchase to the point of sell.

Places to buy cashew nuts for commercial purpose

Enugu state, Oyo, Kogi (Antigua), Nasarawa (Keffi, Laffia), Kwara (Ilorin), Osun (Ogbomosho).

There are season when cashew is surplus (cashew season). This cashew peak period is between February to May. At this time you can buy them and then resell them at their off-season. Their off-peak period is between August to January.

How much capital is needed for cashew nut business?

Cashew nut business is a cool business with a good profit despite some expenses you will make in the business.

To make a reasonable profit in cashew business, you need about 3million for a start. This covers a full load of truck.

As stated earlier, there are some expenses you will make in this business apart from buying raw cashew nuts. Some of these expenses are:

  • Jute bag N350 for each bag
  • Labour N15,000
  • Loading N50 per bag
  • Transport N100,000 – 150,000
  • Produce fee N20,000.

Cashew nut business is profitable

Just like in any other business where you subtract your expenses to know your cash at hand, it’s also done in cashew business.

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When you subtract all the expenses from the money gotten from your sales, you should have about N400,000 as your profit which is more than enough for one full truck.

Let’s say you were to be making this supply once a week or twice a month, you can then tell yourself how profitable this business is.

The price for cashew nut is not stable, it is most times irregular. The current price for now is N300,000 a ton and N1,500 a mudu.

Another pattern of doing cashew nut business

There are several other ways of doing cashew nut business and make profit.

You can buy and roast cashew nuts yourself, make it very neat and package them properly in a good container (transparent bottle is commonly used).

You may wish to put a descriptive label on it to look classic. After this you can supply to big shops, like Shoprite, Spa, Grand square or any supermarket you know.

Go for a market survey in these big shops to find out how much a bottle of processed cashew nuts (kernel) cost, you can then know the next step to take in this business.

Another pattern is cashew fruit juice. You can set up a juice shop or company (depending on the amount you have). Process the cashew fruit juice neatly, package them properly, then supply to shops or sell directly to retailers.

If you want to learn more about cashew business you can go into the cashew farming properly and you will be guided on how to process them for export and local transactions.

Reasons for cashew nut business

The demand for cashew nut is high, this could be because of the nutrients contained in cashew nut. So when demand is high, supply will also be high.

Cashew nut is a cool business. It is consumed locally and internationally, and it is most valued in dollars.

Conclusion

You will become a millionaire in due time whether you do this business locally or internationally.

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