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  • Cashew processors outline challenges, opportunities 08/16/2022

    Aug 16th, 2022

    Cashew processors have outlined a number of challenges that negatively impacts domestic processing including multiple taxations, over-regulations and unpredictable supplies of Raw Cashew Nuts (RCN). The challenges were disclosed on Friday during the Tanzania Association of Cashewnut Processors (TACP) second Annual General Meeting (AGM) held in Dar es Salaam. Opening the meeting, TACP chairman Bahati Mayoma said processors are facing multiple taxation and levies some of which discourage processing. “For instance, while importers are rarely asked to test for kernels radioactive contamination, processors are required by custom’s law to provide certificate of radiation test that costs up to 0.2 percent of the Free On Board (FOB),” he said. He said such a requirement imposed by the government of product origin has continued to make an already fragile industry to struggle in the international competition. Mr Mayoma said local banks also continue to charge high interest rates than competitors, making the price of Tanzania kernels higher than from rival exporting countries. “This has in turn delayed processors to timely sell their produce and sometimes defaulted due to over maturity of loans secured from financial institutions,” he said. Externally, Mr Mahoma said domestic processors have been facing stiff competition from RCN exporters with chances of exporting from different countries at cheap price, therefore upsetting the prices in Tanzania. “Our competitors do not need to retain stocks throughout the year as it adds to operation costs. Instead, they continue buying from different countries taking the advantage of difference in RCN harvests seasonality,” he said. Detailing the TACP achievement since its inception in 2020/21, Mr Mahoma said the number of processing firms has increased from 10 to 23 in the 2021/22 and processing firms have been allowed to enter contract farming with cashew farmers. Furthermore, he said TACP is currently discussing with the government through the Cashewnut Board of Tanzania (CBT) on the possibility of getting subsidy from the export levy that will enable them to reduce production costs and increase competitiveness. “It is my hope that this year’s AGM will come up with solutions to tackle challenges facing TACP through constructive debate. We encourage everybody to contribute and share experiences that will move us to the bright tomorrow,” he said. The CBT senior marketing officer, Mr Hamidu Mponda, said the government will continue to improve cashews markets, noting that domestic processing was the topmost country’s priority because processed cashews live longer, increase revenue and create more jobs. He defended cashew auctions, saying the marketing system has strengthened productivity, improved farmers cooperation and income of individual farmers. “It is true that there are several challenges facing cashew processors in the international market including increased competition. CBT has also understood the disadvantage of exporting RCN that apart from losing foreign currency, the country is also exporting jobs,” said Mr Mponda. The government is looking on the best ways of enabling processors to better compete in the international markets, according to him. But, the TACP secretary general, Mr John Akros said the association supports the government’s target to increase domestic processing to 60 percent reaching 2025. “This is despite the decrease in domestic processing to below 10 percent due to challenges outlined by TACP,” he said. Mr Akros from the Akros Company said his company harvested less than 10,000 tonnes last year, anticipated to reach 30,000 tonnes reaching 2024 and 70,000 tonnes in 2025. The AGM gathered different stakeholders including district officials, union leaders, bankers, quality assurance officers, regulators, promoters, friend associations, among others.