Cashew traders wary of online system

Dar es Salaam. A total of 11 guidelines will govern online cashew trading in the 2020/21 season under the Tanzania Mercantile Exchange (TMX) plc.

Agriculture minister Japhet Hasunga, while in Lindi Region last month for stakeholders’ meeting, said that this season buyers would purchase cashews online through TMX as well as cooperative bids tendered in the boxes under the Warehouse Receipt System (WRS).

He said the decision to introduce the online system aims to allow participation of international buyers, whose countries are yet to lift travel restrictions following the outbreak of Covid-19.

The 2020/21 guidelines released by the Cashewnut Board of Tanzania (CBT) say the TMX would be required to issue declaration forms to buyers who confirmed to participate in online auctions.

The declaration forms will consist of the username, password and bid codes for buyers licensed by CBT.

According to the guidelines, cashews that will be sold online are those described in sales catalogues and that TMX will provide cashew sales breakdown to buyers and other stakeholders 12 hours before auctions.

“Auctions will be conducted online between 2:30pm and 4pm and that buyers would be required to compete within the specified time. The highest bidder will have to wait for farmers’ confirmation at least for 30 minutes after the auctions,” reads the document in part.

Furthermore, the guidelines require that cooperative societies should serve the TMX with a certificate indicating sales acceptance or rejection to the highest offered prices by filling in Form Number 2.

In case farmers reject selling their produce to the highest price offered, the same will be re-auctioned in the following auction and that the TMX will issue a certificate of payment to the successful buyer immediately after the farmer has accepted the highest price offered.

“The successful buyer will be required to make complete payments within four working days from the day of auction and that the merchandise will be re-auctioned with authorities taking away bid security provided by the previous buyer,” according to the guidelines.

The guidelines further suggest that the successful buyer will be required to pay for all purchased cashews during the online auctions according to sales invoice before inspection and collection of the merchandise from the respective auction warehouse.

The TMX will issue a release warranty to buyers after they have completed payments and the monies have been transferred to respective cooperative societies for paying farmers and deductions to respective institutions.

Furthermore, the guidelines require respective cooperative societies to provide genuine warehouse receipts to buyers after the submission of release order.

“The guidelines require buyers to verify the quality and quantity of procured cashews, according to sales breakdown before the merchandise is collected from auction warehouses,” reads the document.

Agricultural Marketing Cooperative Society (Amcos) would be required to prepare a list of farmers selling cashews through it showing their respective bank accounts and mobile phone numbers, according to the guidelines.

The guidelines also require that copies of the list have to be distributed to respective banks for verifications before being submitted to cooperative societies and the TMX.

Also, Amcos are responsible for making a list available to the public through notice boards before payments are effected.

“Amcos will be accountable for any violation of procedures. Stern legal measures will be taken against any cause of payment delay in accordance with procedures and Cooperatives Act No.6, 2013 and the 2015 regulations,” read regulations in part.

The regulations provide that the Amcos leaders have been vested with the responsibility to educate farmers about using their accurate names indicated in bank IDs and that using another person’s account is strictly prohibited.

Speaking on the guidelines, Tandahimba Farmers Association (Tafa) chairman Faraji Njapuka expressed worries on practical trading of cashews online through the TMX system.

“My view is that we are not ready for the TMX system, but the authorities have rushed to the system instead we could have continued with the WRS for this season once again,” he said on the phone, adding; “Buyers could continue using their Tanzanian representatives (agents) in order to avoid future grievances and inconveniences to the farmers and other stakeholders.”

Tunduru Agricultural Marketing Cooperative Union (Tamcu) general manager Imani Kalembo said there was no need for the farmers and stakeholders to worry about the merchandise online trading system.

“By using the system, we will come to know the strength and weaknesses of it. Any improvement measures should depend on the Swot analysis in order to ensure the farmers benefit more in future,” he said. He said Tamcu was ready for the new season and that it had 107,000 sacks, enough for the first five auctions, noting that a consignment of another 200,000 packaging materials was expected to arrive before the end of next month.

Recently, CBT acting director general Francis Alfred told The Citizen that challenges recorded when the TMX system was used for sesame trading last season had been considered.

“They include over-delay of payments, something we don’t like to happen when the system is used for cashew trading,” he said during an exclusive interview with this paper. Mr Alfred said the farmers as well as cashew stakeholders have been educated on how to use the online trading system, expressing his optimism that all cashews would be collected and traded before Christmas.

According to him, already eight companies have expressed interest in participating in the auctions and that four of them have applied for licences with the CBT.