Between 2016 and 2019, Tanzania exported 72, 950 metric tons of chili, earning $4.08
Summary
Arusha. The war in Ukraine is raising its ugly head in Tanzania’s horticulture industry as its ripple effects have ruined the European (EU) market’s logistics and supply chain.
Farmers of African Birds’ Eye Chili (ABEC) in Tanzania are the latest victims of the EU market squeeze, owing to the Russia-Ukraine conflict disrupting logistics and supply chains.
ABEC grower from Arusha, Mr Emmanuel Laizer, revealed that helpless farmers across the country are counting losses as thousands of metric tons of chili are losing the hot taste in their hands as exporters default on their purchase commitments.
Official data shows that Tanzania exported 72,950 metric tons of chili between 2016 and 2019, earning the economy a staggering $4.083 million and bolstering its position as one of the world’s emerging cash crops.
“We have recorded booming ABEC yields, only to find ourselves in a quagmire as the buyers with whom we had signed the purchasing contracts are not forthcoming to fulfill their obligation,” Mr. Laizer said.
It is likely that the buyers have defaulted on their purchase commitments, or there might be a serious slowdown on the export front, owing to the Russia-Ukraine war, which pushed the cost of logistics high for the entire supply chain.
As a result, the majority of crop exporters see the business as a risky venture at the moment, as the exorbitant logistic costs not only eat into their profit margin but also make the crops uncompetitive in the global market.
In a statement, ABEC Vitesse Company’s key exporter stated that it had failed to honor its obligation due to the EU market crunch caused by the Russia-Ukraine war.
“Since April of this year, the chili markets have been erratic, owing to the outbreak of war between Russia and Ukraine. We have seriously been affected because of our over-reliance on the EU market,” reads part of the firm’s statement.
The Vitesse, one of several off-takers who have been exporting ABEC to EU markets, has had purchasing pacts with hundreds of farmers across the country.
“The company would like to apologise for the losses incurred by farmers, particularly the ones who had purchasing contracts with us,” the firm’s statement reads in part.
In a move to save the farmers, as the EU market appears to be more volatile, the key driver of the horticulture industry, Taha, is currently working extra hours to explore alternative markets.
“This is a matter of grave concern, and we are currently using all necessary means to secure alternative markets to salvage helpless farmers who have nowhere to sell their chili harvests,” said Taha chief executive officer, Ms Jacqueline Mkindi.
She said in a statement that Taha has developed a ‘contingency plan’ to respond to the chili crop marketing crisis that threatens to bring the industry to its knees.
“We are working with Tanzania’s foreign missions in the East African Community (EAC), the Southern Africa Development Community (Sadc), the Middle East, and Asia, and there are prospects of securing reliable markets for chili as part of the contingency plan to rescue farmers from the crisis,” she said.
She also pointed out that her marketing team was spending sleepless nights, crossing fingers to explore other markets as an immediate measure to salvage the helpless farmers who had been left in a dilemma. Taha is also conducting an in-depth look at the crop to establish the exact volume of ABEC lying without market, facilitating the willing off-takers to purchase the consignments from growers, and guiding farmers to grow alternative crops with readily available markets.
The horticulture industry champion, in collaboration with the Ministry of Agriculture, will also hold the chili stakeholders meeting early next week in Dodoma to chart out the way forward.
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