Rural Industries Research & Development Corporation

The New Rural Industries
A handbook for Farmers and Investors

Cashew

Introduction

Cashew (Anacardium occidentale L.; Anacardiaceae) is a tropical evergreen tree from north-east Brazil. It ranks third in world production of edible tree nuts with a current world production of about 700,000 t nut-in-shell (NIS).

This is produced mainly in India, Brazil, Vietnam, Africa and South East Asia. Local consumption and demand by importing countries for cashews continues to increase, providing opportunities for expansion of the crop worldwide.

Cashew is a crop with good potential for the Australian tropics. Large areas of suitable land with adequate water supply are available in the Northern Territory and far north Queensland. It is well suited to the seasonally wet/dry tropical climate and does not suffer the perishability problems associated with other soft-fleshed tropical fruits. It can be stored for long periods an1`d can withstand long-distance transport. Australia currently imports A$26-30m (wholesale value) of cashew kernel annually; a local industry would provide import replacement and create export opportunities for sale of NIS, raw kernel and value-added products.

The Australian cashew industry is currently at an embryonic stage, with one major plantation in north Queensland and two plantations in the Northern Territory. To expand, the Australian industry needs high-yielding (>4 t/ha NIS) selections and management practices to achieve and sustain such high yields. Plantings of at least 500 ha in single or cooperative plantations may be required to (i) establish a brand name in the local/international market, and (ii) minimise the unit costs associated with production and the overseas processing of Australian cashews.

Markets and marketing issues

Worldwide 160,000 t of cashew kernel are traded annually with a retail value exceeding US$2 billion. Of the total world supply, 110,000 t are traded in the international market. India (60%) and Brazil (31%) are the major exporters. The major importing countries are the USA (55%), The Netherlands (10%), Germany (7%), Japan (5%) and he U.K. (5%). Australia imports about 5000 t/ year.

As the major importer of cashew, the USA has a strong influence on the world price which is fixed in US$ per pound (1 pound = 0.45 kg) of kernel. The price of W320 grade (320 kernels/pound) over the last 15 years has ranged between US$2.73 and US$3.18. The current price is in the range US$2.4-2.8 and is expected to remain steady, with increased supply (5% per year) being balanced by increased consumption in current and developing markets in Asia, and particularly in India.

Overseas, the nuts are collected from the growers by local traders who in turn sell to large processing companies. After processing, the kernels for export are sold by trading companies to overseas markets through agents or dealers. The major retailers in Australia are supplied by several Australian dealers with kernels imported from India, Vietnam and Brazil. The major Australian dealers are Jorgenson Waring Foods, Michael Waring Trading and Salzo Food Industries.

The current Australian cashew production is about 25 t kernel/year. The raw nut is shelled overseas and the kernel returned to Australia where it is sold as raw kernel or processed and sold as value-added products. As the Australian industry expands, it is likely that growers will benefit from pooling their production, value-adding and marketing with an Australian brand name.

Production requirements

Cashew is well suited to a seasonally wet/dry tropical climate. The area selected for cashew production should be frost free. Mean daily temperatures of less than 25°C will limit the growth and productivity of cashew trees. Areas south of 16°S are considered marginal for cashew in Australia (see map). Soils should be free draining, as cashew does not tolerate waterlogging.

Cashew is known for its drought tolerance, and in other countries it is generally grown under rainfed conditions on soils of low fertility. Yields under these conditions are typically 0.5-1.0 t nut-in-shell/ha. In Australia, much higher yields are required to offset high establishment and labour costs. To achieve these yields (target > 4 t/ha NIS) requires superior genetic material and inputs of irrigation, fertiliser and pest control.

Flowering and fruiting of cashew in Australia extends from May to December, which corresponds to the dry season. Irrigation should be applied during this time at weekly intervals and the harvest should be completed before the wet season commences in January. Fertiliser requirements will vary with soil type, and regular applications of major and minor elements may be required. Deficiencies of nitrogen, sulfur, phosphorus, zinc and molybdenum have been observed in Australian plantings.

Varieties/breeds

Because of the industry's infancy, availability of proven genetic material is limited. At the moment Australian plantings are mainly hybrids/selections imported from overseas and this material is not well suited to local climatic conditions.

A joint government research and grower breeding program is currently developing high-yielding hybrids adapted to Australian conditions. Some selections have been made (1988 bred hybrids) and are being evaluated at a range of sites in Queensland and N.T. Full evaluations of the best selections to date will take at least another five years. Inquiries regarding availability of the selected material should be directed to CSIRO. Limited genetic material of some local selections is available from QDPI and the N.T. Department of Primary Industry and Fisheries.

Agronomy

Before development of the property starts, a farm plan defining the placement of infrastructure (buildings, roads, dams, underground irrigation mains, etc.) and a schedule of development tasks should be formulated. Careful site preparation (land clearing, windbreaks, erosion and drainage structures, soil tilth and amelioration, irrigation installation, root and rock removal) will lead to better tree growth and easier future harvesting. In areas where giant termite (Mastotermes darwiniensis) exists, root removal is also important to reduce the risk of infestation.

With good cultural management, grafted trees will produce sufficient yield by the third year after planting to warrant mechanical harvesting. Nuts with `apples' attached are harvested from the ground, then cleaned, dried, apples removed and stored. A well-managed plantation will require propagation/nursery facilities, an under-tree sprinkler irrigation system with fertigation capability, tractors, slasher/weedicide boom, mist-blower, hedger, sweeper/harvester, nut cleaning, drying and apple removal equipment, and storage facilities.

Cultural practices are designed to promote healthy trees while at the same time managing canopy growth, nut yield and quality, and timing of nut drop. In the period from planting to first harvest, a canopy framework is developed which is structurally sound, shaped to facilitate spray coverage and mechanical harvesting, and maximises nut yield in the shortest time from planting.

The critical aspects of management are insect control during vegetative growth, flowering and early nut development, irrigation during floral and nut development, and adequate nutrient application before vegetative and floral development. Additional operations include pruning immediately after harvest (before vegetative growth season), preharvest trash removal, and weed control.

Cashews require all the major nutrients (N, P, K, Ca, Mg and S). They are particularly sensitive to zinc deficiency, and iron deficiency has been observed in trees growing in high pH soil (>8.0). Nitrogen management is important because it has a major influence on vegetative growth which determines nut yield and timing of nut drop. In tropical areas, irrigation systems should be designed to apply 500 L/tree/week and water supply should be capable of delivering this rate for 5 months of the year.

Pest and disease control

Various insect and animal pests are prevalent in the cashew-growing areas in Australia. No diseases are of commercial concern although anthracnose(Colletotrichum gloeosporioides) has been a problem in areas where rainfall occurs throughout the year.

Some insects are seasonally confined to the wet season, e.g. mango shoot caterpillar (Penicillaria jocosatrix), leaf miner (Acrocercops spp.) and leaf roller (Anigraea ochrobasis). Others can attack trees at any time during the year, e.g. giant termite (Mastotermes darwiniensis), tea mosquito bug (Helopeltis australiae), fruit spotting bug (Amblypelta lutescens lutescens), red-banded thrips (Selenothrips rubrocinctus) and pink wax scale (Ceroplastes rubens).

With the exception of giant termite, insect pests attack tender tissue (leaves, shoots, flowers, developing nuts and apples) reducing leaf area and causing defoliation and shoot death. Control during vegetative growth, panicle emergence and early nut development is most important, as damage during these periods can result in the greatest reduction of nut yield. Control is best achieved by regular monitoring, biological control (e.g. green ants, which research in the NT has found feed on a range of cashew insect pests) and strategic sprays during critical times.

Giant termite, a problem in the Northern Territory and Western Australia, burrows within the tree, gaining entry through the roots from subterranean canals. Infestations can exist unnoticed until death of the tree. Control requires constant surveillance and baiting.

Fruit bats and rats can also cause economic loss. Fruit bats feed on the apple and can remove significant quantities of nut from the plantation boundaries. Windbreak plantings have proven effective in encouraging bats to feed on the cashew apples within the plantation and leave the nuts, which they do not eat, within the plantation. Rats can destroy polyethylene irrigation pipes and fittings. Damage can be minimised by baiting and plantation hygiene (grass control).

Harvesting, handling and processing

Cashew fruit (nut with apple attached) fall to the ground when mature. The fruit is swept together with trash material (leaves, branches, grass) to the centre of the inter-row and then raked up by a harvester. Tree canopy, weed growth, ground surface condition and surface trash influence the rate of harvest, the quantity of nuts which can be harvested and volume of extraneous matter mixed with harvested nuts. Preharvest ground preparation is necessary to remove low branches, level the ground surface and remove trash. While the harvester aspirates light extraneous material, further cleaning may be required before the nuts are dried and the apples removed. Nut moisture must be reduced to <9% before storage.

There are no shelling facilities in Australia. The process of kernel extraction is complicated and laborious and involves removal of the shell's caustic oil, shell cracking and testa removal. Australian nuts are currently sent to China for kernel extraction.

Nuts may be sold as NIS, raw kernel or as processed value-added products (roasted, chocolate coated, etc). NIS price is influenced by nut size and kernel recovery which determines the yield of kernel to the processor. Kernel price is influenced by quality standards, e.g. kernel size and percentage of breakage, and these are defined by the International Organization for Standardization (ISO).

Australian nuts are sold mainly as processed value-added products.

Such sales reap higher returns compared with NIS and raw kernel sale. In addition, broken kernel, which would otherwise be downgraded under ISO standards and so draw a lower price, can be marketed at the same price as premium grade kernel.

Economics of production and processing

The economics of establishing a 100 ha cashew plantation in the Northern Territory has been calculated. Profitability was determined on the basis of returns from NIS sale and assumed a sale price of A$1.33/kg.

A summary of costs and returns is presented in Table 1 (not available in this html version).

In this study, the total establishment cost was $943,950 and included, in addition to land purchase, all payments necessary to prepare the land for its intended use, viz clearing, cultivation, grafted trees, planting costs, bore, fencing, power, buildings, plant and equipment. In reality it is unlikely that a 100 ha planting would be attempted in the first year of development.

The conclusion from this study was that a yield >4 t/ha NIS and a c.i.f. price >A$ 1.33/kg are needed to achieve an internal rate of return (IRR) >10% in real terms. Sensitivity analysis showed that the IRR is highly sensitive to variations in yields and prices. Identification of varieties capable of producing a sustained yield >4 t/ha and a nut quality which would attract a premium price offer the best chance of improving profitability.

Key contacts

Key References

Chacko, E.K., Baker, I. and Downton, J. (1990). Towards a sustainable cashew industry for Australia. Agricultural Science (New Series) 3: 30-43.

Anonymous (1994). A Farmer's Primer on Growing Cashew. KJP Research Foundation, Trivandrum, Kerala, India.

Oliver, M., Ngo, H. and Kuppleweiser, W. (1992). Cashew production in the Northern Territory Top End: An economic evaluation. Technical Bulletin No. 198. Department of Primary Industry and Fisheries, NT, Australia.

Massari, F. and others (1994). `The World Cashew Economy'. L'inchiostroblu: Nomisma Economic Research Centre, Italy.

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