Tuesday, April 30, 2013

DAR EAGER TO PROCESS CASHEWS FOR EXPORT



 

Statistics made available by Cashewnut Board of Tanzania (CBT) indicates that the country used to produce over 20 per cent of global cashew in the 1970s peaking at 145,000 tonnes in 1974, but then in 1980s collapsed to some three per cent before regaining to 158,000 tonnes in 2012.

Most of the Tanzania raw cashew crop that accounts to about 90 per cent is exported to other countries including India as raw crop and only a small portion of less than 10 per cent, is processed internally. Concerned with the situation, the government is seeking a way that would help cut back the loss the country incurs by exporting raw cashew.

The Ministry of Agriculture, Food and Cooperatives has been in talks with a British investor to set up processing plants that would help to control that loss. The Minister for Agriculture, Food and Cooperatives Eng Christopher Chiza pointed out that Tanzania has a substantial potential to extend production and increase the amount it exports by adding the value of domestically processed cashewnut beyond the current 10 per cent while also making use of by-products.

He said that most of the largescale cashew firms are export processor, with only few that are both processors and traders. The total installed cashew nut processing capacities for the large firms in Tanzania in 2012 was about 94,000 tonnes per season.

"The average capacity utilization rate for the large-scale cashew nut processing firms has been low at about 21 per cent last year, and failure to utilize full capacity is due to insufficient funds for purchasing raw cashewnut and meet production costs, poor managements skill and product market uncertainty," Eng Chiza explained.

Adding that; "Earlier, the country had about 12 factories for processing nuts but in 1990s all were sold to private firms to rescue the market of raw nuts produced, we thus struggle hard to ensure that we process cashew nuts locally as we are about to conclude talks with the investor.

"The government saw it wise to look for investor in cashew nuts processing factories to help curb losing a lot of economic gains by exporting raw nuts in the world markets," he noted. Bank's of Tanzania's Annual Report for 2010/2011 indicates that cashewnut sector is one among the main contributors in the exports basket for Tanzania standing at third position from tobacco and coffee.

The report says further that cashewnut contribution in the export earnings would have been even higher if the crop would have been processed before exporting. The export of raw nuts bears negative structural impacts on the industry such as the export of employment opportunities and the loss of income for other cashew by-products.

CBT statistics on cashew production since independence shows that the trend of production was increasing since independence and peaked to 145,080 tonnes in 1972/73 then started to decrease gradually recording as low as 16,400 tonnes in 1986/87. It was also revealed that production started to again in mid 1980s and in 2000/2001 a total of 122,289 tonnes were recorded.

As for 2012/2013, he said, the quantity of cashewnut collected as of February 9 this year stood at 121,703 tonnes. The increase of production was due to increased acreage, government subsidy on pesticides and adoption of good agricultural practices including weeding, pruning and spraying of pesticides.

Tanzania is also known to produce premium quality cashewnut fetching higher prices in the world markets compared to cashew from other countries in Africa and such quality is attributed to favourable weather and soil conditions the country enjoy s coupled with good agricultural practices exercised in the farms.

Trade data from Food and Agriculture Organization (FAO-2012) shows that Tanzania now exports over 150,000 tonnes of nuts per year compared to 65,000 tonnes ten years ago. The data further shows that Tanzania domestic consumption of cashew nuts also soared from an estimated 20,000 tonnes in 2010 to around 25,000 tonnes in 2012.

FAO Data indicates that there is significant growth in the trade, showing the increase in Indian output and the dramatic appearance of Vietnam as a supplier of nuts kernels to rival Brazil. These three exporters supply over 90 per cent of the kernel traded globally. Domestically, consumption of cashew in the country has also shot up.

The increasing domestic consumption of cashew kernels is due to improved distribution system through street vendors, shops, minimarkets and supermarkets. CBT Director General Mr Mfaume Juma recommended for the government to consider waiving taxes for machineries and spare parts earmarked for establishing and running of processing factories in the country to reduce costs to the investors in cashew nuts processing.

Concerned and determined to ensure that cashew nuts are locally processed and subsequently added value, Mr Juma noted that the government should also consider to provide more incentives to investors who have shown interest in establishing factories in agro-processing with particular emphasis to cashewnut sub sector from which the country is losing a lot of economic gains by exporting raw nuts in the world market.

CBT Director also appealed to the government to consider remitting 100 per cent of the export levy collected by Tanzania Revenue Authority (TRA) from exporters of raw Cashewnut to the Cashewnut Industry Development Trust Fund (CIDTF) to support establishment of new processing factories in the country as a way of achieving the target of locally processing all cashewnut produced in Tanzania within the next three years.

Cashew nuts provide an important source of income for some 250,000 smallholder farmers in Tanzania. They are especially important in the southern coastal region, where the districts of Mtwara, Lindi, and Ruvuma account for 80- 90 per cent of Tanzania's marketed cashew crop.

According to the East and Southern Africa Agribusiness Network (ESAANet), network aiming at facilitating increased regional exchange of information, average smallholder cashew farmer occupies about one to two hectares of cashew trees, sometimes intercropped with food crops, mainly cassava, grain staples and legumes. Large-scale private plantations occupy about 2,000 hectares in Lindi and Mtwara regions.

Most of the cashew was planted in the 1950s and 1960s, with a marked decline in planting since mid 1970s.



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