By Zirack Andrew
SESAME season is
coming to an end with most of the regions which planted the crop in
January this year started harvesting in June up to July and this shows
that the crop thrives well in the country.
Though some areas'
seasons begin earlier than that the rest, taking a cue from previous
years' exports, Tanzania export cycle begins in early April and peaks in
July and slows in November before reaching the peak in December.
China is still the
world's leading export destination of our sesame seeds, accounting for
35.9 per cent of the world's sesame imports.
Tanzania's other
top export destinations are Japan and South Korea and in accessing China
market, Tanzania is the fourth leading exporting country behind Sudan,
Niger and Ethiopia.
International Trade
Centre (ITC) global trade statistics show that last year, Tanzania
exported 108,861 tonnes of sesame worth $164.5 million.
Among the top
exporting countries Tanzania's sesame attracted a better price as one
tonne was sold at $1,511, trailing Niger ($1,491 per tonne) and Sudan
($1,491 tonne), only falling behind Ethiopia ($1,586 per tonne) at Dar
es Salaam Port.
This year's export
data is yet to be out, but comparing monthly performance, it shows that
there was a slump in the exportation of these oil seeds. For instance,
in July 2019, Tanzania exported to China to sesame worth $10.6 million
while in the corresponding month this year only $7.7 million of sesame
was sold to the same market.
If one thinks of
the reason behind this flop, Covid-19 is certainly the major cause. In
February 2020 when the world was yet to learn of the severity of novel
coronavirus-allowing their economies to operate in the relaxed mode -
Tanzania exported $1.8 million of sesame to Japan. This is more than
double to what we exported to the same market in the same month last
year - $766,000.
Having its
operations starting in 2018, TMX is the first commodity exchange in
Tanzania that works as an organised marketplace for buyers and sellers
to trade.
On sesame, TMX
started engaging itself in 2019 in collaboration with Warehouse Receipt
Registration Board (WRRB) and Tanzania Cooperative Development
Commission (TCDC).
However, due to
infrastructural inadequacy, not all sesame producing regions are
involved in this new setting, only regions like Manyara, Dodoma,
Singida, Katavi, Morogoro, Mtwara and Lindi. This means other regions
like Tabora, Mbeya, Ruvuma, Kigoma and Tanga are free to trade in the
old fashioned brick and mortar model.
Since its
inception, TMX has helped to increase farmers' selling price by removing
middlemen in the sesame supply chain as farmers take their commodities
to a union warehouse for auction.
At this juncture,
all companies flock to compete and the highest bidder is allowed to take
commodities after paying the required amount.
The best word to
explain about TMX is that it is a game changer, especially after getting
into high value crops like sesame, giving farmers a better price and
easing procurement to companies by creating few buying centres for
everyone to easily reach.
In addition, it has
salvaged traders from crocked middlemen who collected their money
promising to aggregate crops on their behalf only to run away with the
money.
Reports from
companies show that billions of shillings has gone down the drain in
that fashion. Through TMX, however, companies are sure of the safety of
their money now more than ever.
The platform has
helped increase our global sales, and it seems if it were not for
coronavirus this year's export could have been higher than last year's.
Nonetheless, with all greatness brought about by commodity exchange, the system appears to alienate many local companies.
The majority of
indigenous companies have low capital, this gives them a difficult time
to compete with multinationals which usually outbid them whenever sesame
auction takes place. If there are improvements TMX can do, then it
should coordinate well with WRRB and TCDC in improving the quality of
crops and create a safety net for small companies to also compete.
This comes from the
realisation of the fact that not all sheep in your flock will be able
to move at the same pace, and there is no single system that can
accommodate all people at the same time.
It is from this
context that the US stopped relying on New York Stock Exchange (NYSE)
alone to mobilise funds for companies and instead restructured a
state-owned NASDAQ to accommodate start - ups like Microsoft, Amazon and
Apple - to name, but a few - which eventually grew to becoming the
biggest companies in the world.
Open secret behind
this move was that NASDAQ charged a small admission fee which
accommodates cash trapped companies like Microsoft as opposed to NYSE
which remained with their exorbitant prices which only big companies
like IBM could afford.
The author is
National Coordinator of Tanzania Pulses Network and can be reached at
+255714184314 or email: zirack.andrew@yahoo.com
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