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Focus Area

1. Background

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

    Year
Region Data 2005/6 2006/7 2008/9 2009/10
Dar Es Salaam Area(‘000’ha) 3.99 2.68 1.51 2.55
Production(‘000’tons) 6.99 4.24 5.35 2.34
Yields(ton/ha) 1.68 1.58 3.54 0.92
Iringa Area(‘000’ha) 0.62 0.62 0 0
Production(‘000’tons) 0.1 0.08 0 0
Yields(ton/ha) 0.16 0.13 0 0
Lindi Area(‘000’ha) 33.39 34.19 27.92 26.07
Production(‘000’tons) 28.78 19.5 17.31 13.59
Yields(ton/ha) 0.86 0.57 0.62 0.52
Mbeya Area(‘000’ha) 0.62 0.58 0.3 3.56
Production(‘000’tons) 1.04 0.83 0.37 0.48
Yields(ton/ha) 1.68 1.43 1.23 0.14
Morogoro Area(‘000’ha) 0.12 0.03 0.49 0
Production(‘000’tons) 0.13 0.08 0.03 0
Yields(ton/ha) 1.05 2.49 0.06 0
Mtwara Area(‘000’ha) 0.39 211.48 192.81 0
Production(‘000’tons) 39.7 33.1 37.74 38.99
Yields(ton/ha) 0.17 0.16 0.2 0
Pwani Area(‘000’ha) 19.48 54.07 7.54 107.43
Production(‘000’tons) 6.59 19.96 13.21 15.53
Yields(ton/ha) 0.34 0.37 1.75 0.14
Ruvuma Area(‘000’ha) 27.96 54.09 7.75 41.87
Production(‘000’tons) 5.68 12.48 5.19 2.1
Yields(ton/ha) 0.2 0.23 0.67 0.05
Tanga Area(‘000’ha) 3.4 3.97 1.93 23.99
Production(‘000’tons) 1.91 1.96 2.21 1.13
Yields(ton/ha) 0.56 0.46 1.15  

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.

    Year
Region Data 2005/6 2006/7 2008/9 2009/10
Cashew Nuts Area(‘000’ha) 319.97 328.64 240.25 190.651
Production(‘000’tons) 90.65 92.23 81.42 74.17
Yields(ton/ha) 0.28 0.28 0.34 0.39

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

  • Establishmen of new cashewnut processing and packaging factories.
  • Increase and improve cashew nut processing capacity (quantity & quality).
  • Establishment of new cashewnut orchards in high potential regions and processing cashew-apples to make cashew apple juice, jams, chutneys, pickles and other preserves.
  • Purchase of raw cashew from small-scale farmers for processing and export.
  • Manufacture and distribution of small-scale mobile cashew processing machines.
  • Provision of extension and advisory services to small scale.
  • cashewnut farmers groups and estate farmers in the cashewnut sector.
  • Improvement in quality of cashewnut seedlings.
  • Pest and insect control on cashew nuts.
  • Establish and strengthen Cashewnut Farmers Association/ Marketing Cooperatives.
  • Improving access to credit facilities.
  • Improve Efficiency of cashew nut marketing system/ AMCOS.

 

4.  Financing needs in Cashew Nut Industry.

Entrepreneurs / farmer groups may seek financial assistance for:

  • Modernization and or expansion of cashew nut processing plants.
  • Upgrading of cashew nut processing equipment.
  • Diversification into new marketing channels.
  • Establishing of new cashew nut processing facilities (buildings, processing equipment and transport) for the domestic and export markets.
  • Provision of agro- phyto-sanitary services in the areas of diseases monitoring, control and prevention through the use of herbicides and pesticides.
  • Establishment of storage and transportation facilities for the cashew nut products.
  • Extension services through the establishment of training and research institutions for the cashew nut industry.
  • Purchasing of land to be used for expansion of cashew nut production.
  • The purchase of different inputs to facilitate intensification of cashew nuts production (seeds, fertilizers and agro-chemicals, even improved weeding).
  • Purchase of proper packaging materials (containers and plastic bags).
  • Construction of storage facilities, packaging and marketing equipments.

 

5. How can PASS help farmers in the Cashew Nuts Industry?

  • Through feasibility studies and business plans PASS can assist entrepreneur’s access to bank loans (financial linkages).
  • Assist in capacity building of farmers groups and entrepreneur management skills
  • Assist cashew nuts entrepreneurs with layout for design and equipment for cashew nuts processing plants.
  • Assist cashew nuts producers with market research, market linkages and assist cashew nuts factories in marketing strategies for improved retailing of cashew nuts products.
  • Organization of farmers into groups, which can be used as focal points for contract farming, input supply credit, produce-price negotiation and provision of advisory service.
  • Improve efficiency in management and accounting in cashewnut extraction, utilization of manpower and purchase of raw materials.
  • Support cashew nuts agribusinesses with inadequate amount of collateral / security for a commercial bank loan.
  • Assistance of eligible individuals and companies to access loan facilities for their viable investment through appraisal of loan write ups in line with specific bank’s terms and condition and linkages.

 

1. Background

Tanzania has increased the amount of honey produced from 4,860 tons (2001) to 9,380 tons of honey in 2012 with a value of TZS 49.76 billion (USD 30,160,000). This is an increase of 93%. Likewise, the amount of bee wax produced increased from 324 tons (2001) to 625 tons of honey in 2012 with a value of TZS 6.08 billion (USD 3,687,500). This is also a 92% increase. These quantities are only 7% of the existing potential in the beekeeping industry. 

Tanzania has the potential of producing 138,000 metric tons of honey and 9,200 metric tons of bee wax with a estimated potential value of respectively TZS 133.3 billion (or US$ 80,787,878.78) and TZS 35.5 billion (or US$ 21,515,151.51) annually. 

More than half of honey produced in the country is consumed locally as food. The prices in the rural areas, range from USD 1.5 to 2.5 per kg. In cities, range from USD 2.7 to 4.2 per kg. Bee wax is only for a small fraction consumed locally. In the rural areas 1kg of beeswax is selling between 2.5 to 3 USD. 

The main buyers of Tanzania’s honey are EU, Oman, UAE, Kenya, Rwanda, Uganda and Iran. The main buyers of beeswax are Japan, USA, and Germany. The prices of honey for export range from US$ 1.8 to 2.5 per kg (TZS 2970-4125/kg). The price of beeswax for export range from US$ 4.5 to 5.1 per kg (TZS 7425-8415/kg)

Export of Honey and Bee wax (in kg) in the Year 2007-2011

Product 2007 2008 2009 2010 2011
Honey(kg) 156,012 612,960 485,842 428,825 578,783
Beeswax(kg) 320,660 580,154 556,000 568,260 548,325

 Source: Paper presented during Api Expo Africa 2012 in Addis Ababa Ethiopia by Gladness Allan Mkamba , Ministry of Natural Resources and Tourism Tanzania, 2012

 

 2. Honey and Bee wax Production and Export Statistics

Export Weight, Value and Destination Markets for Honey and Bee wax (in kg and in TZS) in the Year 2011

January - December, 2011
Product Net weight(kg) Value (TZS) Average value per kg Distination Countries
Honey 578783 2, 742,129,443 3.2 Germany, Kenya,Netherland,Oman,Rwanda,Uganda, S/Africa
Bee wax 548325 4, 880,089,104 5.9 DRC, Germany, Japan,USA,Mozambique

 Source: Paper presented during Api Expo Africa 2012 in Addis Ababa Ethiopia by Gladness Allan Mkamba , Ministry of Natural Resources and Tourism Tanzania, 2012

 

Possible Location of the Beekeeping Industry & Production of Honey and Bee wax

Location Available Infrastructure
Zone Region
Western Tabora, Rukwa ,Shinyanga Kigoma Good roads and Central Railway line network with easy access to large markets in the Lake Region countries
Southern Lindi, Iringa, Ruvuma, Mbeya TAZARA railway line and DarTunduma Highway and the proposed Mtwara Corridor provide easy access to a potentially large market in Zambia, Malawi, Mozambique and other Southern African countries. There is also a deep-sea port at Mtwara.
NorthEastern Kagera, Manyara, Tanga, Kilimanjaro, Arusha Easy export routes to Europe and other countries including Kenya and Uganda. Access to Kilimanjaro International Airport and a deep sea port at Tanga.
Central Singida, Dodoma Access to Central Railway line leading to export markets in the DRC, Rwanda and Burundi.
Eastern Coast, Morogoro, Dar es Salaam Ready access to export infrastructure including the deep sea port of Dar-es-Salaam and the Dares-Salaam International Airport, as well as access to a large and expanding domestic market for honey

 

  3. Potential for Investment in Beekeeping Industry

     (Honey and Bee wax Production , Processing and Marketing Infrastructure) .

 Currently the Tanzania has 38.8 million ha of forests and woodlands available. Tanzania has both stinging and non- stinging honeybees coupled with existence of    indigenous knowledge in beekeeping.

 3.1. Increase in Production and Expansion of Area for Honey and Bee wax Production and Intensify Honey and Beeswax Production and Extraction (towards Higher Yield).

  • Preserve places with natural trees suitable for placement of bee hives
  • Open up large scale apiaries in high potential areas & conservation areas
  • Effective beekeeping extension services to beekeepers, honey processors.
  • New technology, like top beehives; Better refine and extraction equipment.
  • Provide equipment and tools for improved honey and bee wax production such as high efficiency beehives, protective clothes & gear, sieves, filters, proper containers, etc.
  • Training of beekeepers, especially on quality standards (TBS/TFDA) and possible contamination of final products and traceability.

 

3.2.Potential for Investment in Extraction and Processing of Honey and Bee wax

  • Manufacturing and distributing beekeeping equipment and tools to improve the processing operational efficiency.
  • Establishing (large-scale) beeswax processing plants and honey packaging factories.
  • Training of processors of honey and bee wax nationwide.
  • Certification of quality honey by TFDA/TBS could improve the quality of produce and gain the trust of potential buyers.
  • Effective processing training to honey and bee wax processors, manufacturers and users of beekeeping extraction and processing equipment.
  • Improve management and accounting on efficiency in honey and bee wax extraction and processing, and the rational hire and use of manpower.
  • Entrepreneurs with improved processing facilities should also invest in proper containers, grading and labeling of their refined final product to support marketing efforts.

 

3.3. Potential for Investment in Marketing of Honey and Bee wax

  • Clean refined honey in proper labeled containers with TFDA/TBS certification, are highly demanded in the market due to its natural origin (‘healthy organic produce’)
  • To a lesser extent, this also applies to bee wax.
  • Proper labeling and branding of quality honey could favor certain (export) markets.
  • Develop wholesale export markets for honey and beeswax.
  • Develop retail markets for bee products in the domestic market.
  • Appropriate processing and packaging facilities for bee products.
  • Effective training in marketing of honey and bee wax products.
  • Organize a ready market for bee products like honey and bee wax (in Tanzania and abroad).
  • Small processors , such as women groups, should coordinate among them on a marketing strategy, as each small processor cannot afford to do a marketing campaign on its own.
  • Good marketing strategies have to be thought off before investing in marketing infrastructure and employees: storage, containers, grading and labeling, market research, a sales related salary and incentive structure (bonus).

 

3.4. Implementing the Traceability System for Beekeeping Products

  • The Government trained about 500 beekeepers and beekeeping extension agents on traceability.
  • Few groups and associations have started to implement the system.
  • Tanzania developed honey standard since the year 2006 which comply with the EU and Codex Standards.
  • Processing groups, cooperatives, exporting companies are liable to comply with the standard.
  • Developing and implementing chemical residue monitoring plan.
  • Tanzania submitted to the EU chemical residue monitoring plan for honey since 2001 to get permission to sell honeyin the EU member countries.
  • The Government has been using average of TZS 60 mil (2011/2012 - 64mil) to collect samples of honey yearly and send to QSI laboratory in Germany to be analysed and submit the report of analysis to EU.

 

 4. Financing the needs of the entrepreneur in the Honey and Bee wax industry 

Entrepreneurs / beekeeping groups may seek financial assistance for:

  • The purchase of quality bee hives and other inputs for honey and bee wax production.
  • The purchase of processing equipment, tools and packaging materials.
  • To improve the efficiency in honey extraction and the production of bee wax.
  • Purchase of newer / higher quality processing machines.
  • The modernization and or expansion of production and marketing facilities.
  • Purchase transport units and other relevant transport and processing equipments.
  • Grading, packaging, labeling, branding, and other marketing equipments.
  • Construction and/or expansion of storage facilities.

 

5. How can PASS help Farmers in the Honey and Bee wax industry

Entrepreneurs / bee keeping groups may seek financial assistance for:

  • Through feasibility studies and business plans PASS can assist entrepreneurs access to bank loans (financial linkages).
  • Capacity building of bee keeping groups and entrepreneur management skills.
  • The purchase of quality bee hives and other inputs for honey and bee wax production.
  • The purchase of processing equipment, tools and packaging materials.
  • To improve the efficiency of honey extraction and production of bee wax.
  • Purchase of new / higher quality processing machines (tools & equipment)
  • The modernization and/or expansion of production and marketing facilities.
  • Purchase transport and other relevant transport and processing equipments.
  • Packaging, grading and marketing equipment.
  • Purchase of marketing equipment (grading, sorting and weighing scales) and construct and/or expand storage facilities.
  • Market research and assistance to market linkages for producers and buyers.
  • Support beekeeping entrepreneurs and/or their associations with inadequate amount of collateral / security for a commercial bank loan.

 

PASS’s core business is to provide advisory and financial services (mainly financial linkage with/out credit guarantee). In this PASS prepares presents to commercial banks and thereafter supports those investments with credit guarantee fund. PASS collaborates with commercial partners banks and with many community partner banks.

 

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