Tanzania: Advice to Sustain Cashew Price Improvement
Thu Dec 15 2016
Cashew nut price improvement in the current season is seen as a big achievement but experts have suggested some measures to sustain the gaining of the product and ultimately benefit both farmers and traders.
The price increased to Sh3,500 per raw kilogramme compared with Sh1,250 recorded during the 2015 harvesting season, thanks to improved markets and supervision.
Stakeholders say the increase of price was a result of scrapping some regulatory charges which were imposed to both farmers and buyers and control of the cartels that surrounded the buying of cashew nuts in the previous seasons.
It's explained that some buyers were conspiring with the middlemen and unfaithful officials to trick farmers during the bidding process but this year the Cashew nut Board of Tanzania has managed to control the cartels and directed successful bidders to pay at least 25 per cent of the value.
However, the Executive Secretary of the Agricultural Non-State Actors Forum (ANSAF) Mr Audax Rukonge says the business environment in the industry should be facilitated in a number of ways to sustain the growth.
ANSAF is an advocacy network that seeks to advocate for pro-poor development and an agricultural policy conducive to that development.
"I really congratulate the authorities for taking some measures that have facilitated this price improvement but there are issues need to be addressed to maintain the growth," he says.
"First of all, we should remember that we are celebrating the improved price of raw cashew. We should discourage selling of raw cashew by 100 per cent through establishing processing factories. Tanzania must process its cashew crop at home," he says.
He says Tanzania has the best cashew nut variety in the world which should be supported by processing factories.
According to him, selling unprocessed cashew nut is transferring employment opportunities and technology to other countries.
Tanzania plans to build three cashew nut processing factories in Mtwara, Tunduru and Mkuranga.
The factories will be built through financing of Cashewnut Industry Development Trust Fund - CIDTF - an independent body incorporated under the provisions of Trustees' Incorporation Act (2002).
CIDTF's core objective is to foster development of cashew nut sector by financing all shared functions of research, farming inputs, processing, marketing and branding.
However, Mr Rukonge says the plants might not help as they would just employ a few people.
"The planned factories are sophiscated ones but I think we should encourage establishment of as many small and medium-sized industries as possible by the private employers. They factories should not necessarily be constructed by the CIDTF.
"The government can involve the industry stakeholders to deliberate how to go about it as well as developing the subsector," he adds.
The second issue, according to Mr Rukonge, is that the government should allow transportation of the cashew nuts through roads from Mtwara to avoid delays.
Recently, the government directed crop buyers to export their consignments using Mtwara Port so that other agencies operating there can collect taxes and fees. But the shortage of marine vessels at the port means cargo would have to wait for long in the godowns, a situation that affects crop buyers' obligations to their customers and financiers.
"Most cargo ships dock at Dar es Salaam Port."
A Vietnamese company, Starnuts, failed to transport 3,700 tons of cashew nuts because the sea vessels that would ferry the commodity to Dar es Salaam were reportedly booked until January.
Recently, it was reported that 107 listed buyers had bought 141,000 tons, but only between 54,000 and 57,000 tons were issued with export permits, meaning that over 90,000 tons were yet to be shipped out of Mtwara.
Lack of money had left only a few local buyers in the auction centres, accounting for the gradual decrease in prices.
Transporting the commodity to the Dar es Salaam Port by road is expected to make cashew nuts business more sustainable. This would expedite the trade cycle as exporters would sell their merchandise overseas faster and repay their loans and come back to buy more crops.
Mtwara Port is also said to be incapable of handling this year's big harvests due to its poor infrastructure, inability to dock large ships and having only one weighbridge, among other challenges.
Cashew nut is Tanzania's second largest traditional export (after tobacco) which generated $182.3 million during the year ending September 2016, according to the Bank of Tanzania. Other traditional export crops are tea, sisal, cloves, tobacco and coffee.
The value of traditional exports amounted to $822.6 million during the year.
Tanzania expects to produce more than 200,000 tons this year's harvesting season, up from 125,000 tons reported last year as the government is distributing fertilisers and improvement of the crop purchasing system.