Why Cashew Nuts Are So Expensive | So Expensive

cashews grow in select tropical climates around the world from the bottom of a hanging fruit like this just one kilogram of cashews can cost ten dollars wholesale that's over seven times as much as peanuts and in the u.s retail prices for whole cashews can reach 15 dollars per pound but without intensive precise processing these nuts wouldn't be edible at all so how exactly are cashews processed and is this what makes them so expensive [Music] in 2017 the world ate 770 000 metric tons of cashews they're one of the most popular and valuable nuts in the world worth over six billion dollars today cashews grow in tropical locations like india vietnam ivory coast and here in sri lanka the trees are a member of the same family as poison ivy and like poison ivy cashew plants contain a toxin called urushiol it's found in the plant itself and the brown oil inside a nut's shell it can cause burns itches and blisters which is why unprocessed cashews are considered dangerous to eat or touch it's also why they require more rigorous processing than other nuts each fruit grows just one shelled nut called a droop which workers separate by hand nuts must then dry under the sun to help draw out some of the shell's caustic liquid the most difficult and dangerous step is splitting open the nut since toxic oil still coats the droops cashews are brittle so factories used to do this step manually to ensure machines wouldn't break the nuts but doing this by hand has frequently raised issues within the industry ngos have called out some factories for overworking employees and putting workers at risk of burning themselves if they can't afford to buy gloves for protection today machines are advanced enough to crack the shells cleanly keeping the majority of nuts intact and helping minimize risks to workers after after a machine splits open the shells the next two crucial stages totally depend on workers who have to do them by hand the nuts are roasted to ensure again that the toxic liquid inside is destroyed the next stage is particularly tedious as it relies entirely on handiwork workers must peel off the husk or the dry outer covering that surrounds each nut because it's high in tannins and could irritate your throat [Music] removing it is a skill one masters with practice experienced workers de-skin only about two and a half kilograms of cashews each night this step is not only difficult but also has the biggest impact on price [Music] cashews are graded by several features like color weight and condition large [Music] because cashews can only be harvested once a year growers like laharu save a portion of the nuts in stock so that they can continue making a profit in the months ahead but it comes at a steep cost just stocking the nuts costs laharu more than 65 thousand dollars each year [Music] this causes prices to fluctuate a bit year-round in december laharu's supply has decreased so prices typically increase but it also depends on each country's supply chain while sri lanka processes and sells many of its own cashews domestically other countries export much of what they grow it's likely that many of the cashews you buy in the u.s or europe were grown in africa processed in vietnam or india and finally exported to the western market africa produces half of the world's supply of cashews ivory coast for example produced about 730 thousand metric tons of raw cashews in 2019 but it exported over 90 percent of that this is because ivory coast and other african countries still don't have a robust processing industry ivory coast plans to expand domestic processing by 2024 but without it cashews are significantly less valuable in 2018 the export price of cashews processed in india and exported to europe was 250 percent higher than the price paid to ivory coast farmers vietnam on the other hand was one of the first countries to invest in automation making it a key location for processing cash use today vietnam is the largest cashew exporter in the world in just the first three months of 2021 the country exported over 108 000 tons of cashews automation has also lessened the need to hire workers which is a reason many factories in india and sri lanka still process [Music] manually by hand or machine processing cashews is no easy task and the world's climate crisis could make it even harder a 2013 report on the climate's impact on cashews shows unseasonable rains and heavy dew can impact the quality and quantity of the nuts just this year laharu's harvest came late because of it the military [Music] amidst climate challenges cashews continue to be popular healthy eating trends are key to driving demand along with the versatility of the cashew itself another reason the nut remains so valuable whether used as a snack cooking paste or an alternative to milk or butter cashews have many applications around the world researchers predict the market will grow to 7 billion dollars by 2025 and although cashews are currently cheaper than they've been in recent years demand is likely to drive prices higher in the future you

Channel: Business Insider

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Length: 8min 30sec (510 seconds)

Published: Sat Jun 12 2021