Dar es Salaam. The fact that a US-based company has shown interest in buying all the cashew nuts which are processed in Tanzania is a major incentive to the government to boost its cashews processing capacity
Less than 10 percent of Tanzania’s cashews are currently being processed in the country – and for it to take full advantage of this rare opportunity, it will have to undertake massive reforms to up its processing capacity. The cashew trading season opens this week.
The owner and Chief Executive Officer of the Ward Holdings International (WHI), Mr Lloyd Ward, said last month that another US firm, J F Braun & Sons, was able, willing and ready to buy Tanzania’s entire cashew nuts output which is processed locally.
Mr Ward revealed that J F Braun and its sister companies in the Gellert Global Group import for sale in the US food products worth over $1 billion annually.
“Our first containers are scheduled to leave Dar es Salaam for America before the end of this calendar year,” he told a meeting that had brought together cashew nut stakeholders recently – adding that, if other factors remain equal, they are willing to buy a kilogramme of processed cashew nuts at $6.5 (about Sh14,950).
But, available figures show that Tanzania’s installed annual capacity for cashews processing currently stands at only 98,000 tonnes: the rough equivalent of about 30 percent of the country’s annual raw cashew nuts production.
However, the truth of the matter is that only about 30,000 tonnes of the annual production is actually being processed locally: a measly 10 percent of the total annual harvest of the crop.
If all the raw cashews were to be processed locally, Tanzania could generate more income in foreign currency, create more employment opportunities – and benefit more in related activities, including value-addition.
But, analysts say that, for the country to benefit from domestic processing of its cashews, it first needs to undertake appropriate reforms regarding how the crop is currently being handled and traded.
The executive director of the Agriculture Non-State Actors Forum (Ansaf), Mr Audax Rukonge, told The Citizen that the ministries of Agriculture, Finance and Planning, Industry and Trade – together with other stakeholders – must work closely together to ensure success in cashews processing and other value-adding activities
“Also, preferably, the government can declare a moratorium on the export of raw cashews so as to enable fast-tracking domestic processing,” he said.
He also said that the government could facilitate the granting of loans for use on cashew processing plants and supplies of water, power and processing machines as a matter of course.
“We currently process cashews below the installed capacity because a majority of the industries involved in processing are not able to access operational funding, thus rendering them virtually idle, ineffective,” he said.
He also cited the viral Covid-19 pandemic as another factor which has adversely affected many economic sectors not only in Tanzania, but globally – including international trading.
According to him, if the government were to make true its promise of locally processing all the cashews produced in the country, this would cut costs by middlemen and others, thereby ultimately increasing the crop’s price to benefit farmers and the economy in general.
It would also create employment not only through the processing activities, but also in the extraction of by-products from the raw nuts, to be used in the production of chocolates, jams and other delicacies, as well as fertiliser from the same raw material.
The director general for the Cashewnut Board of Tanzania, (CBT), Mr Francis Alfred, said the main objective of the board is to increase the amount of the raw cashew nuts (RCN) that are being processed in the country from an average of 10-20 percent of the production to 60 percent by the 2025/2026 harvest year.
Revealing that they have enabled local processors to procure raw materials direct from farmers through the primary market system instead of competing with exporters of RCN in the secondary market, Mr Alfred said the guidelines on this have already been prepared and circulated to stakeholders.
“We are now facilitating synergy between small group processors with middle and large processors in order to increase the amount of RCN being processed in the country,” he said.
According to him, most processing factories currently sell kernels mainly.
“But, working in close collaboration with foreign investors, we are focusing on ensuring that the factories also produce other by-products such as ‘Cashew Nut Shell Liquid’ (CNSL) and Ethanol.
He also noted that the Private Agriculture Sector Support (Pass), working in collaboration with Equity Bank and CBT to capacitate small groups to bolster and boost domestic cashews processing.
Indeed, the relevant cooperative unions are being encouraged to establish processing factories – and, in fact, some of them have finalized financing arrangements.
In a related development, Elisha Milanzi – the Agricultural Marketing Cooperative Society (Amcos), Chipuputa Chairman (Nanyumbu) – said there are no plans for Nanyumbu to sell processed cashews this harvest season.
“We in Nanyumbu have already received some 2,400 sacks in which to pack raw cashews collected from farmers ready for sale on October 1 this year,” he said – stressing that “all the cashew nuts in the district will be collected and brought to our offices ready for action on that date.”