There are few dreams bigger than becoming instantaneously wealthy, and for some Nigerians that dream may be realisable as the Nigerian Raw Cashew Nut (RCN) season opens today February 10, 2014.
Yes, Nigerian raw cashew nuts are in high demand particularly in Asia and most sellers will begin to enter into contracts with their foreign off-takers as farm gate prices become known today.
The cashew nut season which typically lasts till June, is most rewarding in its first three months when the kernel out-turn ratio (KOR) is highest. Kernel Out –turn ratio which simply implies the percentage of the good cashew kernels recoverable from a lot of raw cashew nuts is higher in the months before the rains come. And so, better KOR means better money. Typical KOR at the start of the season is 51 percent but this dips to as low as 44 percent by June so new entrants are advised not to make ambitious commitments far into the season.
Typically, season flag-off prices start at about N60,000.00 per metric tonne and sell between $900 to $1,500 per metric tonne CNF (Cost and Freight) but could fluctuate upwards or downwards very quickly based on the workings of the market.
Traditional buyers of Nigerian RCN are Indians, Vietnamese and Chinese. However, Indians often pose certain challenges that are unusual for other buyers, often reneging on contracts so caution is needed. Always insist as part of contract terms that an irrevocable Letter of Credit is opened by the buying party. This will guarantee you of their capacity to pay once shipping documents are presented to the buyer’s bank.
Many Nigerian raw cashew nut traders have lost hundreds of millions in naira to other international trade payment options like Bills for Collection and Open Account. Please avoid them.
Cashew nuts serve dietary, medicinal and industrial purposes and are in large demand for the production of anti-bacterial preparations, varnishes, insecticides and car brake pads.
In the coming weeks, several trucks will be hauling tonnes of RCN from Dekena in Kogi State and Ogbomosho in Oyo State to terminals in Lagos, from where these produce will be loaded in containers and shipped for some extra dollars.
Nehikhare Omotayo Igbinijesu is an Economist, Poet, and Social Entrepreneur. 'He is the author of The Code: A Simple Story About Raising Great Women' and 'Marriage: 12 Questions You Need To Ask Before You Say, “I Do”'. He lives in Lagos with his wife, Akudo and two sons. He is Co-founder of Stuffsilos.com, a motivational resources company based in Lagos. You can email him via nehijesu [at] yahoo.co.uk
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