Tanzania cashew nut prices slightly dropped at international markets an aspect which has forced lowering down of the commodity’s price locally by almost by 30 per cent for a kilogram of the raw product.
In view of this however, the biggest markets of the raw crop notably from India and Europe have resorted to low down local pricing codes from 2,020/- ($ 0.86) to 1,600/- ($ 0.68), according to a top official from the Cashew Nuts Board of Tanzania (CBT).
The Acting CBT Director General Francis Alfred told The BusinessWiz that this year’s harvesting season which commenced in September came with lots of challenges that include market shocks elaborating that this is a normal global business trend.
He said as part of efforts to address such challenges , the government has put in place a number of interventions including looking for other potential buyers to satisfy the demand of local farmers, he affirmed.
Tanzania is among the world’s largest producer of raw cashew nuts, but the country experienced a low level of production during the previous three years due to unreliable market facilities.
During last year’s peak season, stakeholders including farmers in the country were assured of the enormous sales after the level of production of the product had increased from 232,000 tonnes to 313,826 tonnes respectively for 2020/21 trading season.
The current price rates has discouraged Cashew nut growers in southern Mtwara and Lindi regions in Tanzania, who have also declined to sell their cash crop at auction markets for 2022/2023 trading season that kicked off a month ago on the ground that the prices offered are too low.
Farmers are dismayed over the introduced price rates by cooperative unions despite being assured by the government of the enormous sales in the past during the previous harvesting seasons of 2020/21 trading period.
The auctions were conducted in Masasi, Nanyumbu, Newala and Tandahimba districts whereby the first batch of 14,610 tonnes of raw cashew nuts were availed by two respective agricultural cooperative unions of TANECU and MAMCU.
Farmers in these districts have groaned in dissatisfaction saying that were not happy with the current prices offered by the buyers as it is too low compared to the production costs, hence have raised serious concerns asking buyers to consider raising the prices to Tshs. 3,000 ($ 1.28) as minimum price per kilogramme of cashew nuts.
Farmers have reiterated the need forcing the government to bargain with the buyers for better prices that will enable them earn better living from their cashew harvests.
Stakeholders have indicated that, the trend of business has currently changed at international market level an aspect that has caused the processing capacity to become low.
Cashew nut is the lead cash crop export in the country with an average of production increase of 120,000 tonnes annually with only about 10 percent of the cashew nuts produced within the country is processed in Tanzania and the rest is exported in raw form.
It is followed by tea, coffee and sisal. In East Africa, Tanzania accounts for 75 per cent of the region’s production.
Data statistics from National Bureau of Statistics (NBS) shows that Tanzania’s total cashew nut sales at the international market dropped at 63 per cent to $196.5 million during 2018/19 trading period, compared with $529.6 million in the 2017 trading period.
This was due primarily to the country’s low level of processing capacity whereby about 90 per cent of the country’s total production of cashew nuts are exported for sale in their raw form.
Up to now, Tanzania has only 37 cashew nut processing plants which have the total capacity of processing 104,205 tons of cashew nut on annual basis.
In response to the prevailing situation going on, the Minister for Agriculture Hussein Bashe said Tanzania has set aside 4trn/- ($ 1.7 bn) to promote horticultural activities for a period of ten years so as to empower farmers engaged in all types of crop growing in the country.
The Minister told a press conference in Dodoma on Tuesday last week saying that, “the money will be utilized together with other things to help expand their market base at international level”.
The Government plans to ensure to support of the product to enable those in the product’s supply chain to sell processes products that fetch better prices.
Furthermore, the Minister added that Tanzania is seeking more international market opportunities for cashew nuts in United States whereby the country will be exporting 7 tonens on annual basis at this time when the crop is faced with potential market challenges.