Cashew growers reap Sh450bn despite challenge of low prices

Dar/Mtwara. Cashew farmers have pocketed over Sh450 billion from 212,000 tonnes traded during the ongoing auctions in the 2021/22 trading season.

The amount have been accrued amidst stakeholders concern that the season has been featured with low prices offered by buyers during auctions, hence significantly affecting revenues generated by farmers.

Therefore, they recommend streamlined process to ensure more cashews are processed locally in order to trade kernels instead of the traditional auctioning of Raw Cashew Nuts (RCN).

Addressing a press conference in Mtwara on Friday, the Cashewnut Board of Tanzania (CBT) director general, Mr Francis Alfred said following existing logistics challenges, only 30 percent of procured cashews has been exported.

He said, however, that not all procured cashews are exported immediately after procurement, noting that some buyers hoard the product in warehouses and export at their conveniences.

According to him, as compared to last season, cashew production was expected to increase, hinting that already a significant part of cashews has been traded as compared to 280,000 anticipated tonnes.

“The season will be closed in April 2022. While Mtwara Lindi Coast and Ruvuma regions gave yields since October this year, Tanga, Singida and Dodoma have their yields delayed due to weather differences,” he said.

Furthermore, he said cashew auctions will only be closed after all cashews from growing regions have been collected and traded through appropriate channels.

He said though Agricultural Marketing Cooperative Unions (Amcos) has managed to identify sub-standard cashews that had to be mixed with the standard grade sold to customers in the efforts made by unscrupulous individuals to adulterate the country’s cashew market.

According to him, all cooperative unions have conducted 10 auctions so far with the exception of the Tandahimba and Newala Cooperative Union (Tanecu) that was proceeding for the 11th public trading.

“Masasi and Mtwara Cooperative Union (Mamcu) was the only cooperative union that faced the challenge of insufficient packaging materials. However, the challenge has been resolved without affecting cashews trading operations,” he said.

He said low prices offered by buyers was another challenge recorded during the trading season, noting however that the price has not sharply declined.

However, data collected independently by The Citizen early this week from five cooperative unions’ shows that Mamcu tops the others after auctioning 60,387 tonnes worth S132.079 billion.

Mamcu is followed by Tanecu that traded 49,183 tonnes of RCN valued at Sh108.862 billion, while farmers in Ruangwa, Nachingwea and Liwale Cooperative Union (Runali) earned Sh93.510 billion from 41,610 tonnes of RCN.

Farmers from the Lindi Mwambao and Tunduru Agricultural Marketing Cooperative Union (Tamcu) garnered Sh43.573 billion and Sh37.328 billion respectively from 19,416 tonnes and 18,011 tonnes.

According to data from the five cooperative unions, Sh2,445 was the highest price recorded by Tanecu and Sh1,600 was the minimum registered by Lindi Mwambao.

However, cashews stakeholders believe that cashews was supposed to get higher prices this season due to the quality of cashews produced in the country and increased competition due to an average production.

Therefore, they advised the government and responsible authorities to fast-track realisation of the process to increase domestic cashew production and do away with auctioning RCN.

Speaking to The Citizen, Tanecu general manager, Mr Mohamed Mwinguku said the massive investment in domestic processing was the only solution to price challenges facing cashew farmers.

“This is the only way our farmers can be liberated from the challenge of low prices,” he said during a telephone interview.

He was seconded by Mr Salum Mkemi who said focusing on domestic processing has been the politicians’ agenda since the era of the third phase President, the late Benjamin Mkapa.

“This should be brought to practise. The country should focus on increasing processing to 70 percent of all produced cashews,” he said.

Mr Mkemi, who owns a processing factory in Mtwara, said from the 3,000 tonnes annual installation capacity, his factory has not met the demand of customers located in different parts of the world.

He said exporting RCN transfers job outside the country, noting that significant number of jobs could be created provided that the country makes efforts of owning 20 to 30 processing firms.

“Such factories can recruit up to 500 Tanzanians each which is a large number of citizens if all of them are empowered to operate,” he said.

Therefore, he challenged authorities to make more efforts on the area, noting that the cashews market of value addition cannot be exhausted by Tanzania firms.

He said under the free market economy, RCN prices are determined by forces of demand and supply, saying that on-going low prices during auctions were a result of declining RCN demand due to increased supply.

According to him, this season, West Africa has entered in the market all cashews that remained unsold last season due to impacts of Covid-19 outbreak, therefore increasing supply and lowering prices.

Furthermore, he said global shortage of ships and containers has worsened transportation.

The Tamcu general manager, Mr Imani Kalembo said Sh500 is deducted per kilo from cashews sold in the district in order to generate capital for establishment of a processing company.

“We are focusing on starting processing in the next few years. In the past, government’s interventions helped the sub-sector. However, under the private sector things have worsened,” he said.

Another processor, Mr John Joseph, said Tanzania targeted to process 60 percent of produced RCN by 2030 and 80 percent reaching 2040.

“However, the vision cannot be realised without concrete strategies. Implementing its strategies is what makes Vietnam a major importer and exporter,” he said.

He proposed the government to provide answers to existing challenges in order to enable processors to get enough raw materials for processing throughout the year.

“A special programme should be prepared to ensure processors can get RCN in small amounts without necessarily forcing them to accumulate stocks in warehouses, which is relatively expensive,” he said.

He said Value Added Tax (VAT) for importation of processing equipment should be waived to provide processors with financial relief and increase their ability to cover excessive operation costs.

Reported by Louis Kolumbia (Dar) and Florence Sanawa, Mwanamkasi Jumbe (Mtwara)