Cashew nut business is a very healthy business to invest in, it is clean and straight forward. You are sure of making good profits whenever you carry out any transaction. Nigeria as a country is making it big time in the exportation of cashew nuts, selling mostly to India and Vietnam countries.
India is leading both in the importation and exportation of cashew in the world yet they don’t produce them. Their leading has been made possible because of the free trade agreement they have with many Asian countries. Yet Asian countries would not want to buy from Africa directly because of lack of import duty tariff as such the prefer to do business with India. This is because it make things a lot easier for them.
Cashew nut business can be done in two ways, either as a supplier (you buy directly from farmers and supply them to distributors) to cashew nut companies in Nigeria or exporting directly to foreign buyers.
There are terms to meet in other to function in this business. Cashew business is booming that is why many people are now going into cashew farming.
PARAMETERS USED IN DETERMINING THE QUALITY OF CASHEW NUTS FOR EXPORT.
To export any commodity to other countries you have to make those produce very hygienic. As such cashew nuts must be free from any impurities, well dried and free from foreign matters. What qualifies a product for export is quality specification. This is what determines the value and price clients place on the products and also may be willing to part with.
1. NUT COUNTS
This is the number of raw cashew nut in 1kg of nuts. It is between the number 170-230 counts. 170 is considered to be the best quality while 230 is considered to be poor quality. Cashew nuts are sold in tons and 13 bags make a ton while 30 tons make a full truck load. You have to learn how to scale and grade your cashew nuts before packaging them to avoid being cheated.
NUTS COUNTS BY GRADE
- 170 excellent
- 180-190 very good
- 190-200 good
- 200-210 average
- 210-220 below average
- 230 and above, poor
Most foreign buyers prefer between 170-200 nut count. In Nigeria nut counts differs from place to place for example Kogi State nut count is between 190-203/210, Kwara State 190-205, Nasarawa State 200-210. Ogbomoaho, Osun State is said to have the best nut count. That is why most cashew nut business dealers prefer nuts from this area.
2. KERNEL OUTPUT RATIO (KOR/OUT TURN)
The quality of cashew nuts KOR in Nigeria is between 42-54. The nuts are priced and negotiated in regards to their quality. You just have to learn how to determine the quality to avoid being cheated. Because many of those buyers capitalise on people’s ignorance to cheat them. It is not every nut that can be 100% good, we still see ineffective ones.
Therefore KOR can be described as the number of useable kernels found after de-shelling the nuts. It can also be said to be the quality of good nuts from 8kg of raw cashew nuts.
Out-turn or KOR is scaled in lbs on every one bag of raw cashew nuts.
That is the count is in pounds
- 48-53 lbs is excellent
- 43-45 lbs is good
- Less than 43, lbs is seen as poor grade and are most times rejected.
To check for quality, samples would be drawn from 30% of the consignment.
3. MOISTURE CONTENT
Be sure to dry the cashew nuts to the barest minimum moisture of 6%-7%. Some buyers tolerate up to 10% moisture content. But it would be wise to always keep it down before bagging and loading your cashew for storage or supply so they won’t be rejected.
4. DEFECTIVE NUTS
These are nuts that are diseased as a result of improper drying/storage. The moisture inside the nut exposes them to fungi attack. You can identify fungi infection when there are either black or yellow spots on the cashew nuts. The maximum percentage acceptable by foreign buyers is between 8%-10%. Other defects are injury due to improper packing, void or empty nuts and shrink or feeble nuts due to immature harvest.
5. FOREIGN MATTERS
These are unwanted particles such as stones, sand, sticks, leaves etc. The highest impurities that can be accepted by buyers is 10%. But you can always lower it down than that in other to enjoy patronage. It should not exceed 0.5% of every 1kg.
6. PACKAGING
Cashew nuts can only be package with jute bags. The jute bag is sold at #350. This also determines the price of cashew nuts because you will add it to your expenses.
7. HAULAGE
The amount you pay for haulage can affect your profit so find out how much you will use to transport the nuts from the place of purchase to the point of sell.
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WHERE TO BUY CASHEW NUT FOR COMMERCIAL PURPOSE
Osun state (Oghomosho), Kwara (Illorin), Enugu, Oyo, Kogi (Anyigba) Nasarawa (Keffi , Lafia) etc. You can purchase them during their peak period which is between February to May and resell them during off-peak period (August-January).
HOW MUCH IS NEEDED FOR CASHEW NUT BUSINESS?
To make reasonable profit cashew nut business can be started with 3 million. This is enough to load a full truck. Apart from the money you use in buying raw cashew nuts you will still make expenses on
- Association paper which is about #30,000
- Produce fee #20,000
- Transport #100,000-#150,000
- Loading #50 per bag
- Labour #15,000
- Jute bag #350 each bag
PROFITABILITY IN CASHEW NUT BUSINESS
When you subtract all the expenses you made from the amount you sold the cashew nuts you should have not less than #300,000 for one full truck. Imagine if you were to be making this supply once in a week even if it is twice a month. That is to tell you how profitable cashew nut business is.
The price of cashew most time fluctuates, for now the current price is #300,000 a ton and #1,500 for a mudu.
ANOTHER WAY OF DOING CASHEW NUT BUSINESS
Buy and roast the nuts by yourself, package them properly with good container. you may have to place a label on it to make it classic. Supply to big shops such as Shoprite, Grand Square,
Supermarkets and the rest of them. Go to these big malls to find out how much a bottle of processed cashew nuts (kernel) cost, then you can advice yourself properly on this business.
Another way is to set up a juice company, processed the apple to fruit juice, package them neatly and properly. Supply to shops or sell directly to consumers.
Maybe you can go into cashew farming business so that you can be processing them for export and local transactions. If you want to learn about cashew farming.
WHY YOU SHOULD DO CASHEW NUT BUSINESS
- Its demand far outweighs supply
- Cashew nut business is a straightforward business
- Their consumption is both local and international
- It is most valued in dollars
CONCLUSION
Cashew nut business will make you a millionaire whether it is done locally or internationally.
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Helpful… Thanks
Wow…thanks, this article very useful.
Thank you for sharing this insightful detail. Going through the information provided, I don’t see any profit in cashew nut after an investment of 3million as you suggested. 3millon will get me a full truck that is 30bags as you said. 30bags with calculation of 13bags a ton is 2.307 tonnes. A ton sale for 300,000 and the full truck 692,100. An investment of 3million with other sidelined expenses get me a revenue of 692,100. How am I making profit.
Please can you share your experiences in the business, detailing your start-up capital and your profit margins over the years? What is the best strategy to manage a Cashew business?
He said a truck is ₦300K
This info is helpful, pls I would like to do d business.
Pls, I want to join the association of cashew nuts business in nigeria. My tel nos: 08035267406
Thank you so much for this cashew nut business eye opening though, is capital intensive from your illustrations but if I may ask/say , I’m very much interested in the business not just because of what I read now but I’ve been looking for how to go into it before now and my search for it lead me to this article.
Now I don’t have millions even one to start it with but I want to start , what if I start in a small way get it and supply to retailers.
Pls I need your assistance on how to go about it.
Please from somewhere you can link buyers to farmers and make money from it. Or you start with any small amount you have, buy from where they can be found in large quantities and sell to retailers in areas where there are high demands but less supply
U really tried, love it