Tanzania: Cashew Nuts Trade - Predicaments and Improvements

By Zirack Andrew

CASHEW nuts are among the permanent crops grown in Tanzania, employing nearly 700,000 farmers -

90 per cent of whom are found in three regions; Mtwara, Lindi and Pwani, of which Mtwara takes the lead by having a huge area cultivated at around 47 per cent, followed by Lindi (30 per cent) and Pwani (13 per cent).

Generally, cashew trade has progressed relatively well this year most especially when you compare it to two years ago debacle that saw everything but immaculate unravelled.

An export hiccup that saw us moving from a peak of cashew nuts exports of 329,511 tons in 2017 to 70,170 tons the following year, cost national income decline by 417 million US dollar in a single year, while observing a 4 per cent price decline from 1,591 to 1,528 US dollars per ton.

Apparently, following improvements in the past two years, no one expected that this year could be somewhat treacherous to this level. It happened.

And the major shocker was none other than eruption of coronavirus. Cashew season is now approaching its end after it started kicking in in October - giving us two months which is an ample time enough to evaluate its performance.

While we may not have a cumulative export data at this point in time, the prevailing market price in the country and on the international stage is more than enough to give us a picture of how the cashew nuts season will fare. The prevailing buying price in Mtwara auction centres is around 2,300 Shillings a kilo, down from 2,500 Shillings last year.

And this appears to be a reflection of global market position which is currently providing 1,450 US dollars per ton, again a deep dive from 1,600 US dollars last year. As we tried to talk about this in previous essays, coronavirus still stands as the reason behind this southward drift.

India which has been our perennial import market for years now, is badly hit by the virus, with nearly 10 million infected people, making it the highly affected country in the world just behind the United States of America. This situation has prompted the Government of India to impose strict control measures.

So many institutions including universities and other academic institutions have adopted online studying system to minimise all forms of physical interaction. Retrospectively, so many eateries and restaurants have gone out of business.

This and many other actions have a tendency of reducing spending, much to the chagrin of those who are in the food crops value chain. Worse enough, cashew nuts are not basic food to be too essential, but rather raw materials for luxurious stuff like sweets and deserts which one can live without.

Now these kinds of products are usually income elastic - their consumption are directly proportional to consumers' income. So this may try to explain why there is a little slump of price and that we should expect that our exports will be anywhere near 154,181 tons - last year's export quantity.

Nonetheless, don't you lose sight on a wood for a tree, thinking that's the whole story and nothing we can be proud of. It is not. There are number of improvements in the sector done by sectorial organisation that needs to be acknowledged. And all credits must be directed to Cashew nuts Board of Tanzania (CBT).

What CBT did this time is tremendous. For the first time, they registered all cashew transport companies and their drivers. For an outsider this might just be a "form over content", but for any person that is involved in crops' logistics, this is a punch on the head, enough to earn a boxer a well-deserved point on the ring.

Transporters, just like a number of middlemen, have been castigated by many traders for being crooks. Several traders who dared to entrust their crops have ended up losing billions of shillings after drivers decided to divert the consignments from the owner to unknown places.

Many of them are now crying and they don't wish this to be taken as a fait accompli. It is this theft tendency that prompted CBT to introduce a rule that all logistics companies wanting to do business in cashew must be registered by the board first.

What a move! One trader, out of ecstasy, applauded the move and couldn't hide his hope, "Now we are sure that our cargoes are safe".

From now forward, he can rest assured that, a truck carrying cashews from Tandahimba to Dar will arrive safely because someone responsible is doing his job. On this, CBT has acted as a trailblazer, paving a way for some other entities (authorities) to replicate the practice on other crops as well.