Tanzania: High Cashew Prices Match Commodity Exchange Plans
Thu Dec 08 2016
Cashew nut farmers in the country are currently rejoicing, thanks to a 30 per cent increase in prices of their crop.In Mtwara for instance, the price ranges between Sh3,837 and Sh3,585 per kilogramme from between Sh2,890 and Sh1,800 per kilogramme during the last season.
Farmers say the price increase is a result of a change in the way cashew nuts are marketed, for the crop is now sold in an auction, which allows buyers to compete, sending prices up in the process.
This calls for the need to hasten the operationalisation of the Tanzania Mercantile Exchange (TCX), which was established under the Commodity Exchange Act 2015.
The TCX is entrusted with the mandate to link farmers with local and international markets.
In the USA for instance, such markets have existed for about 150 years and some analysts contend that they have played a vital role in economic development of the world's largest economy.
This is because with such markets, farmers are assured of a centralised marketplace where they can sell their commodities to those who wish to use them for manufacturing or consumption.
This in essence means that, such markets help the country to get rid of unscrupulous middlemen who control the marketing system of Tanzania's key cash crops like tobacco, cashew nuts, cotton, coffee, tea, sisal, sesame, sunflowers and cloves among others.
With commodities exchanges, a farmer from, say, Mtwara, Ruvuma, Tabora and Mara, can easily propose the price for their crop months before harvests.
That way, the role of the market will be to ensure there is a buyer for every seller as long as both parties are willing to arrive at the right price.
With this background, plans to operationalise the TCX starting May next year need not be overemphasised. Through TCX, the benefits attained in cashew nut trading will spill over to those engaging in other crops.