Cashew prices expected to rise after government approval of use of Dar Port for export

Dar es Salaam. Cashew nut farmers can expect further price increases as demand rises following the government’s recent decision on export ports for the crop.

Last week, the government allowed exportation of raw cashew nuts (RCN) through Mtwara and Dar es Salaam ports – thus lifting the previous directive to use only Mtwara as the export port.

The government’s earlier decision had aimed at promoting the port in the southern part of the country after it had invested Sh150 billion in rehabilitating the facility.

Yesterday, leaders of cooperative unions in the southern regions told The Citizen that there was a notable increase in the number of buyers attending cashew nut auctions – and the prices they offered – at the auctions held last week.

This was just a few days after the government’s latest decision to add Dar es Salaam as another port for the export of cashew nuts.

“The number of buyers attending cashew nut auctions will definitely go up much higher starting next week. This should increase competition - and, therefore, command higher prices,” said the general manager of the Masasi and Mtwara Cooperative Union (Mamcu), Ms Biadia Matipa.

For example, she said, prices for the cashew nuts auctioned at the Chakama Agricultural Marketing Cooperative Union (Amcos) in Masasi Town last Friday reached Sh2,331 a kilo, up from Sh2,050 before the government’s decision on export ports.

She also said that the number of buyers increased to 24 in that auction – most of them new buyers. That number was up from the 16 buyers who participated in the previous auction. “Most of our usual buyers have been busy removing from warehouses the raw cashew nuts that they had purchased before the free storage offer period expires,” she said.

But, her counterpart at the Tandahimba and Newala Cooperative Union (Tanecu), Mr Mohamed Mwinguku, said the number of buyers in his domain doubled to 30 for the auction held at Imani Amcos in Newala District last Friday.

That auction had some 8,700 tonnes of RCN traded at an auction price ranging from Sh2,170 to Sh2,400 a kilogramme.

“The prices were slightly higher, compared to the Sh2,100-to-Sh2,292 per kilo recorded in the previous public auction when 9,171 tonnes of RCN were sold,” Mr Mwinguku said.

“An increase in the number of buyers fuels competition, leading to better prices for our farmers. Our hope is that the trend will continue, as we still expect harvests this year to surpass the 2020/21 harvests,” he said.

However, the situation has not been as favourable for the Tunduru Agricultural Marketing Cooperative Union (Tamcu) whose general manager, Mr Imani Kalembo, said only a few buyers have been attending auctions in the district.

This, he lamented, invariably results in poor competition among prospective buyers – and, almost inevitably, low bid prices.

“This trend is most probably caused by the district’s geographical location, as cooperative unions located close to export ports seem to be better off,” he speculated.

The government’s decision to include Dar es salaam as an exit facility for RCN exports came at a time when cashew prices that had peaked at Sh2,400 per kilo started to decline somewhat rapidly. The decline was attributed to the government’s directive to mandatorily restrict RCN exports to Mtwara Port. This, some traders said, partly increased the costs of the cashew nuts business in the area.

Announcing the decisions in Mtwara, the deputy minister for Agriculture, Mr Hussein Bashe, said shortages of empty containers and increased freight charges were the challenges that forced the government to lift the mandatory use of Mtwara as the sole export port for the crop.

Apparently, transporters were charged between $120 and $190 per tonne of RCN as handling charges at Mtwara Port. This is higher than the $74 charged at the Dar es Salaam Port for the same services.

“Although the shortage of containers is a global issue triggered by the Covid-19 pandemic and the resulting lockdowns across the world transportation charges at Mtwara Port had also adversely impacted businesses,” the deputy minister said.

“President (Samia Suluhu) Hassan has, therefore, instructed transporters to choose between exporting RCN either through Mtwara or Dar es Salaam Port,” Mr Bashe said – in the event assuring stakeholders of the government’s flexibility in ensuring that all the already procured 47,000 tonnes of RCN are exported without hitches.

“Since global cashew nut prices have remained stable at an average of $1.3; $1.4 and $1.6 CIF (Cost, Insurance and Freight), the government’s decision will attract more buyers who will offer competitive prices,” he said.