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The Global Cashew Industry: Production, Demand, and Disruption
Manage episode 480374266 series 3663203
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Overview:
In this episode, we examine the global cashew supply chain as a case study in supply chain vulnerability, rising commodity risk, and international market exposure. What begins as a casual observation about a common snack quickly evolves into a comprehensive analysis of the intersecting forces—geopolitical, logistical, climatic, and contractual—impacting this $7B+ industry.
Key Discussion Points:
- Cashew Ubiquity and Market Relevance
- Cashews as a high-demand input in snacks, dairy alternatives, and culinary products
- Expanding use across food sectors from plant-based milks to premium processed goods
- Geopolitical Pressures on Freight & Trade Routes
- Impact of the Russia-Ukraine war and Israel-Gaza crisis on maritime logistics
- Rerouting of vessels away from the Suez Canal, increasing lead times and costs
- Logistical Bottlenecks and Infrastructure Deficiencies
- Chronic congestion at Nigerian and Vietnamese ports
- Persistent global container shortages and port inefficiencies post-COVID
- Volatile Contract Enforcement and Supply Reliability
- Increasing breach of raw nut contracts in West Africa due to price volatility
- Financial implications for processors reliant on just-in-time supply models
- Climate Variability and Agricultural Impact
- Erratic weather patterns reducing yield quality and timing in key producing regions
- Compound risks posed by nature in already stressed global systems
- Market Implications and Retail Consequences
- Rising input costs and product shortages affecting downstream availability
- Potential long-term consumer substitution toward more stable alternatives
- Strategic Responses from Industry Stakeholders
- Vietnam’s efforts in supply diversification, backward integration, and contract enforcement
- African nations’ push for local processing amid regulatory reform
- Investment in resilient infrastructure and supply chain transparency
- Broader Implications for Global Agri-Trade
- Lessons for other crops with similarly fragile value chains
- Why cashews are a microcosm of larger global economic vulnerabilities
Conclusion:
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