Sunday, February 20, 2011

Cost of Cashews Doubles! People are Going Nuts!


As tensions within the Ivory Coast escalate, production and distribution of the cashew nut has decreased. As the Ivory Coast is the second largest African producer of the cashew nut, this current curbing of production has caused the price of the nut to double. According to Olatunji Owoeye who is the president of the National Cashew Association of Nigeria, "the price of a metric ton of cashew from Nigeria to the international market has gone up from about $600 to $1,200 since November". The current political tensions are the result of a power struggle between the Ivory Coast's former president Laurent Gbagbo and the new president elected this past November, Alassane Ouattara. This has caused the Cotton and Cashew Monitoring Committee to stop the export of cashew nuts in order to halt the funds flowing to Gbagbo. Although Nigeria relied on the Ivory Coast for part of their supply of cashew nuts, they also have their own rather strong agricultural sector in cashew production. In fact, the cashew nut is one of Nigeria's largest non-oil export commodities. Therefore, many countries looking for a new supply of the nut in fear that the situation in the Ivory Coast will worsen are turning to Nigeria.

This story is an example of the most basic ideas of the systems theory. There was, and continues to be a desire for the production and intake of the cashew nut. Therefore there were several countries competing for the potentially lucrative market. As internal issues in the Ivory Coast essentially scare people away from their unstable market, Nigeria sees an increase in the attraction of their own cashew nut market. As they are capable of producing the needed product, this could cause a new period of development in the Nigerian economy which would hopefully come in sync with an increased level of democratization. Because this story is relatively new, we are not able to examine the feedback of this shift in markets but it will be interesting to see how Nigeria handles this new economic opportunity.

No comments:

Post a Comment