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  • Tanzania gains US market for value added cashew nuts 10/17/2022

    Oct 17th, 2022

    Existence of a ready-made US market for branded consumer packaged cashew nuts could mean less competition for Tanzania’s products at a better price, stakeholders told The Citizen on Friday. This may be the case because Tanzania will no longer have to compete with giants like Vietnam and India in the wholesale cashew nuts kennel market. The ready-made market, according to stakeholders who spoke to The Citizen, also poses a challenge to Tanzania to increase production, raise quality of the products and do away with huge idle processing capacity. The country has tried for 30 years to enter the US market, to no avail. Ward Holding Tanzania (WHT) president Godfrey Simbeye described the event as one of the greatest economic breakthroughs of cashew nut industrialisation since independence in 1961. He said the semi-processed cashew nuts were bought by WHT using the network of the Zanzibar-based YYTZ Agro-Processing Co. YYTZ thereafter dried, peeled off, and dried again, roasted and packaged cashew nuts kernels ready for shipment. The former Tanzania Private Sector Foundation (TPSF) executive director explained that the 7.5 MT of cashew nuts shipped to the US earlier this month was just a part of 50 metric tonnes of kernels bought from Tandahimba in Mtwara Region farmers at a price of 16,000 per kilogramme. But, according to him, value added Cashew Nuts Kennel (CNK) in the American market is traded at around $20-50 per kilo. “This shipment [7.5MT] is just the beginning. Many more tonnes will follow the trend,” noted Mr Simbeye, revealing that next month five more containers CNK of 7.5MT capacity each would be shipped to the US. According to him, in the current harvest season, WHT was expecting to buy 600 MT of semi-processed cashew nuts from farmers for the value addition process before shipping the same to the US market. “The fact that the market for cashew nuts is growing is good news to farmers. As a country, we need to plant, harvest and process more,” said Mr Simbeye. Statistics from the Cashew Nuts Board of Tanzania (CBT) shows that during the last harvest season, the country’s raw cashew nuts (RCN) annual production stood at 240,000 tonnes, of which only 14,000 tonnes were processed. CBT acting director general Francis Alfred underscored that unlike in the wholesale CNK market, the branded consumer packaged cashew nuts could penetrate the US market far more easily. He said Tanzania could not compete with Vietnam in the wholesale cashew nuts kennel market because Vietnam had large control of the supply chain and so its price. Official data have it that Vietnam commands 80 percent of about 190,000 MT of CNK that the US purchases annually. “But in the consumer packaged cashew nuts market, there is less competition and the profit margin is high compared to the end market,” asserted Mr Alfred. “The trickle-down effect on farmers is high. We would wish to sell more under this market approach. Our goal is to have a sustainable and reliable market,” added the CBT boss. Agricultural Non State Actors Forum (Ansaf) executive director Audax Rukonge said the new move by the American investor presents an opportunity for stakeholders to embark on initiatives geared to bolstering the processing of cashews. “The opportunity to export value-added CNK instead of RCN should be exploited by every Tanzanian who wishes to significantly contribute to the economy -- as it is a long awaited one,” recommended Mr Rukonge. He said Tanzania continues to lose over $180 million annually which is equivalent to Sh414 billion for exporting 90 percent of its annual harvest in a raw form. Mr Rukonge further expounded that opportunities for employment were being exported to Vietnam and India (Tanzania’s major RCN importers) due to failure to process the produce domestically. By securing the market for Tanzania CNK, the country’s brand opens other avenues for production of jam, biscuits, chocolates as well as hard shell liquid which is believed to be of higher monetary value than that of kernels. It is through industry that the country could unlock more products such as wine and hard drinks expected to be produced through such initiatives. “It is of great urgency that governments should create a better business environment for agro investors especially in value addition and increase productivity at the farm level,” suggested Mr Rukonge. Efforts to reach the ministry of Agriculture proved futile. But Agriculture deputy minister Antony Mavunde is on record as having said that the government was more than willing to provide the much-needed support to the sector. “To us agriculture equals business. The government is ready to partner with the private sector in the entire agricultural value chain so that we can take the sector to the next level,” he was quoted by a local media late last month. WHT chief operation officer Scott Karren said: “To address the opportunities in developing a supply chain to meet global demand, WHT has tapped into entrepreneurial spirit clearly evident among the existing processors in Tanzania.” WHT was established in January 2020 as a wholly owned subsidiary of Ward Holdings International LLC of the USA and began to advance an integrated supply chain model. The model is based on Market Driven Industrialisation (MDI) fundamentals to drive profitable and sustainable industrialisation of Tanzania’s high value crops, beginning with the cashew nut sub-sector. WHT’s core objective is to monetise agricultural products at higher economic values via transformative MDI initiative. The highest level of monetization is to sell consumer-packaged goods. WHT’s transformation project is focused on monetising cashew nuts, not via auction of RCNs, as is currently done, but rather as value added consumer- packaged goods sold directly into the global market.