Tanzania is Africa’s largest cashew nut grower after Mozambique and Ivory Coast, and the world’s eighth biggest producer. The Cashew nut Board of Tanzania (CBT) reports that Tanzania in 2012 produced about 158,000 metric tons of cashew nuts. Out of this 88% is exported as raw nuts, while 12% is processed internally, leaving a lot of value added and employment opportunities with the importing countries.
Cashew nuts provide an important source of income for 250,000 smallholder farmers in Tanzania. Main production areas are the districts of Mtwara, Lindi, and Ruvuma. They account for 80-90% of Tanzania’s marketed cashew nut crop. Cashew nuts are the source of three-quarters of total cash incomes of farmers in these districts.
2. Production, Processing and Marketing.
2.1. Location & Production
The sub-sector contributes 18% of Tanzania’s merchandise export earnings. The average smallholder cashew farmer occupies about one to two hectares of cashew nut 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. Currently the majority of harvested cashew nuts are purchased raw, exported and processed abroad, mainly in India. This is then re-exported to different countries around the world at a higher price than the original one.
Failure to utilize full capacity is due to insufficient fund for purchasingthe raw cashew nuts and meeting production. Currently there are only three working plants located in Mtwara, Dar es Salaam and Newala which can process not more than 20,000 tons per year.
Table 1: Cashewnut Area ('000'ha), Production ('000'tons) and Yield (tons/ha) by Region
|Dar Es Salaam||Area(‘000’ha)||3.99||2.68||1.51||2.55|
Source: www.tanzania.go.tz/agriculture, 2013
2.2. Processing of Cashew Nut.
The total installed cashew nut processing capacities in Tanzania was about 42,800 (2009/10) and 94,000 (2011/12) tons per season. In 2013, the annual processing capacity is 136,700 tons at 25 plants, with a capacity range of between 300 and 12,000 tons per plant (TCB/Daily Nation, 6 -9-2013).
The average capacity utilization for the large scale cashew nut processing firms has been low at about 21 % last year.costs together with product market uncertainty.
The investment of new processing plants, besides new employment opportunities, would lead to a USD 110 Million in annual average income (Tanzania Cashewnut Board-website: www.cashewnut-tz.org).
Table 2. National Data on Production Trends of Cashew Nuts.
Source: www.tanzania.go.tz/agriculture, 2013- Note that there is no area planted for Mtwara Region (2009-2010) in above data. This could also not be found on the mentioned website. Therefore yield figures in table 2 are probably too high. The production of cashew nuts in Mtwara is much higher in the 2007-08 latest figures of the Tanzania Cashewnut Board (62 Tons) in comparison to the data from Ministry of Agriculture (37.7 ton).
There is a lot of scope for improved efficiency in management and accounting in cashewnut processing from the extraction phase till the utilization of manpower and machineries and the purchase of raw materials.
2.3. Cashewnut Marketing
Farmers sell their cashew nuts under the Warehouse Receipt System (WRS) whereby farmers are paid 70% of the value of their cashew nuts sold through co-operatives and others are not paid at all. The global demand increases with 9% per year and Africa, which produces 43% of cashew nuts, is the only region that can supply this. This makes the cashew nut in Africa, especially the one from Tanzania highly demanded and good marketable.
Tanzania cashewnut is also easy to market due to its high quality and value. Research shows that Tanzania produces one of the best cashew nuts in the world, which is mainly exported to India. Around 85% of Tanzanian cashewnuts are sold in-shell and 99% of these cashewnuts produced in Tanzania go to India which is currently also the largest producer of cashew in the world. However, as India does not have enough cashew nuts for the domestic market, it has to import from East Africa. The India imported price (CIF) is much higher than the Tanzanian exported price (FOB). This is of course caused by cost, insurance and freight charges and the exporters trading margin.
Tanzania explores new cashewnut markets in other countries. The Cashewnut Board of Tanzania (CBT) enhances a transparent auction system, rationalizing costs in the marketing system between producers, organized in primary cooperatives, who sell their produce to Cooperative Unions, making use of the Warehouse Receipt System and finally ensuring raw cashew nut exports.
3. Potential for Investment in Cashew Nut Industry
4. Financing needs in Cashew Nut Industry.
Entrepreneurs / farmer groups may seek financial assistance for:
5. How can PASS help farmers in the Cashew Nuts Industry?