How to Import Cashew Nuts into The United States.

Cashew nuts grow from the cashew tree that sometimes grows as tall as 15 meters while some dwarf varieties grow only up to 6 meters. Cashew nuts can be eaten on their own as they are, used as a recipe, or further processed to produce cashew milk, cashew butter, or cashew cheese.

They are a great source of healthy protein. Ivory Coast and India are the leading cashew nut producers in the world. Vietnam, Burundi, and the Philippines are the other major cashew nut producers. The cashew nut prices paid to the farmers are usually very low and lead to lower production due to disinterest.

However, Vietnam is the leading global processor of cashew nuts as of 2020. Ghana, Tanzania, Guinea-Bissau, Nigeria, ivory coast, Burkina Faso, Senegal, Indonesia, UAE, and guinea make up the top cashew nut exporters. 

Legal Requirements.

All nuts are classified as food items. Therefore, it is the sole responsibility of the importer to ensure that the imported cashew nuts are safe for human consumption, sanitary, and properly and clearly labeled as per the US regulations.

The labeling should contain some essential information such as the country of origin. It is a law requirement for all imported food to have clearly labeled country of origin labels.

All foreign language labeling must be translated into English.  The name and address of the manufacturer, and distributor of the foods must be clearly labeled on the packaging. 

A very important point for the importer to note is that all food imported into the US, regardless, is treated as Interstate Commerce. Interstate Commerce refers to the transaction or transportation of products, services, or money across state borders.

The Food and Drug Administration reserves the right to inspect all incoming food items in the US. Cashew nut consignments will be at the port of entry into the US subject to inspection by the FDA. If the shipment does not comply with the set standards, the administration body may detain the shipment.

A Prior Notice is a very crucial document to submit before importing any food item into the US. This notice is filed with the FDA and allows for time to plan for inspection for the incoming consignment.

Some of the details that are contained in the Prior Notice include the Country of Production which may also be the country of Origin, the Expected date and time of arrival and port of entry, the shipping company’s details, the shipping mode, and the FDA product code.

The prior notice should be submitted within two hours before the arrival of the shipment or up to a month. A Prior notice is very important to successfully complete the clearance of your goods, otherwise, the shipment will be detained and refused entry until you comply with the regulations of filing a Prior Notice.

The FDA also requires that importers of food products register their enterprise with them to show that the foreign suppliers are accredited and abide by all regulations put forth by the FDA. This requirement is provided for in the FSVP (Foreign Supplier Verification Program.)

Quality and Classification of Cashew Nuts.

Each origin has its own quality standards and there are various bodies charged with maintaining quality such as the Combined Edible Nut Trade Association CENTA, AFI (Association of Food Industries), Grade Specification for Indian cashew nut kernels, and Vietnam Cashew Nuts Kernel and Technical Request.

Quality control is key to a great relationship and an even greater cashew business. Some quality considerations such as moisture content (between 8 – 12%) and the number of defects or even foreign matter are some of the factors the importer should factor in the negotiations. Cashew nuts are graded according to the shape, color, and size of the kernel.

The color of the kernel is a major grading factor. The whiteness matters, the whiter the better the quality.  Universally, there are 33 cashew nut grades but only 26 are available for trading. 

The grades denoted with a W refer to the Whole Whites, while The S refers to the Scorched. SS represents the Second Scorched, LB stands for Light Blemish, B stands for Blemish, the DB represents Dark Blemish, while the rest are Large Pieces, Split, Butts, Small Pieces, and Pieces. 

The grading sizes also differ, but the most common ones include the W-180 which is referred to as The King of Cashew being the largest and most expensive. W-120 are large cashew nuts and are often referred to as Jumbo nuts.

W-240 is a fair grade which is quite available and also affordable. The W-320 is the most common nut available while the W-450 is the smallest in size, the cheapest, and also white. The above list contains all the whole grades.

However, there are also some Scorched Wholes. These have all the characteristics of the whole whites apart from the color. They look slightly brown due to an extended period of roasting. All other nutritional composition is exactly similar to the whole whites.

There is another classification of grades depending on wholeness. The butts splits, and pieces are also cashew nuts but lack the wholeness. They command lower prices. 

Quality based on the color of the cashew kernels includes FQFU which is white, yellow, or ivory in color and referred to as First Quality Fancy Uniform, Second Quality Scorched, Third Quality Special Scorched, Fourth Quality, and Dessert.

Importing Cashew Nuts into the US.

As with any other importing business, supply is a crucial aspect of the business. Quality cashew nuts are a great selling point and the origin is also important when considering which country to purchase from. The importer has an obligation to understand the origins and the regulations that govern imports from each origin. For instance, India has different regulations from Ivory Coast. 

Therefore, the importer should have a good relationship with his suppliers. It is also a great idea to source the cashew nuts directly from the producers who either farm independently or as a cooperative society. With direct relationships with the producers, an importer can enter into meaningful contracts that the producers fulfill and guarantee a year-round supply.

Sourcing from the farmers gives the importer a chance to make a positive difference in the lives of the producer. He/she is also able to control the quality of the product and even advise the farmers on the best agricultural practices while ensuring that they will get the best deals for quite a considerable time.

The cashew nuts are ready for trading around February to June/ July, which means the importer should be ready for negotiations with the producers or his suppliers in the origin country. Cashew nuts are always in high demand, therefore planning will be key. During the negotiations, the importer should put special emphasis on the cashew nuts quality. 

An alternative to sourcing directly from the farmers is through brokers who are situated in the origin countries. These brokers source directly from the farmers and offer the cashew nuts to foreign importers. This eases the process of dealing directly with the farmers, but unfortunately, this reduces the producers’ earnings significantly. 

Futures contracts are available for the cashew nut import business. This allows constant supply and production of cashew nuts. By entering into the futures contracts, the farmers will be bound to produce a certain amount of certain quality for sale to the buying party who is also bound by the contract to fulfill the terms stipulated in the agreement.

Logistics and Shipping of Cashew Nuts.

A futures contract will shield against fluctuating prices which works for both parties. After the agreements are signed, it is up to the buyer to initiate the process of logistics. This will involve the transport of the cashew nuts from the farms or warehouses to the exporting/origin port.

Due to the sensitive and brittle nature of the nuts, utmost care must be taken to protect them against foreign elements such as strong odors and moisture. Packaging should be greatly emphasized in matters of security and preserving freshness. It is important to understand the Incoterms to be used during the shipping process of the imported cashew nuts. The International Commercial Terms dictate who is responsible for what aspect of the shipping process including insurance, loading, unloading, financial obligations, and logistics.

The importer may decide to do all the shipping on his own if he has the facilities. But due to the complex nature of the shipping activities, it is always advisable to go for an accredited logistics company that will ease the shipping burden from the origin port to the destination port.

A few documents are required from the importer to furnish the shipping agent for clearance and forwarding purposes and customs. A Bill of Lading must be present before any shipping process begins. The bill of lading will serve as a title of ownership of the consignment as the goods are transferred between the various parties involved.

A bill of lading also serves the purpose of acting as a confirmation of delivery of goods once the goods have successfully landed at the destination port. It is also a contract of carriage between the shipping agent and the carrier of the goods, while also providing tracking information to follow the updated status of the goods in transit.

A Commercial Invoice is an essential document that provides as much information as possible pertaining to the goods being shipped. This invoice will contain information such as the country of origin of the goods, payment method used, the purchase price of each item contained therein, and dates of sale. The information contained therein will be used by the customs agency to calculate import duties.

A Packing List contains most of the information contained in the commercial invoice but is more specific down to each package contained within the shipment. Information such as the number of packages within the shipment, specific dimensions of every package, quantity, weight, and descriptions of each package, combined weight of all the packages contained in the shipment.

Customs Bond covers all imported commercial goods including cashew nuts and needs to be purchased. The customs bond is a requirement by the CBP (Customs and Border Protection) agency for all incoming commercial shipments. The bond assures that the required import duties and fees will be paid.

The Entry Summary Form is a required document to clear your imported cashew nuts into the United States. The CBP Form 7501 holds all the crucial information that relates to the imported consignment including the bond type purchased, duty and tax to be paid, and entry type.

Once all of the above documentation is filled out and submitted, the cashew nuts may be cleared for entry into the United States, provided they pass the food safety inspection. After this, the nuts will be transported to your warehouse of choice for storage and distribution. 

The whole process of importing cashew nuts into the US has been greatly eased and streamlined by direct sourcing from the producers and their cooperative societies. 

AGnimble has made the whole process seamless from sourcing, financing, transport, warehousing, and logistics with transparency as a key driver of the process. Register here today to begin the new dawn of cross-border food and Agriculture commodity commerce.