Prices drop as cashew season opens

Dar es Salaam. Cashew nut farmers could earn between Sh700 and Sh800 less from every kilogramme of their produce this year as buyers offer lower prices compared to last year.

The prices, revealed during the first auctions yesterday, are equivalent to a decrease of 24.7 per cent on average compared to what the government offered when it bought a kilogramme at Sh3,300 last season after buyers offered what were viewed as unrealistically low prices.

Over 20,000 tonnes of raw cashew nuts were yesterday auctioned by two cooperative unions at a minimum price of Sh2,409 and a maximum of Sh2,559 per kilogramme.

The auctions were conducted in Newala and Masasi towns by Tandahimba and Newala Cooperative Union (Tanecu) and Masasi and Mtwara Cooperative Union (Mamcu), respectively.

Cashewnut Board of Tanzania (CBT) acting director general Francis Alfred said Tanecu auctioned 13,181 tonnes of the crop, while Mamcu sold 7,278 tonnes.

“While Tanecu auctioned the merchandise at a minimum price of Sh2,409 and a maximum of Sh2,559 per kilo, Mamcu sold at a minimum price of Sh2,409 and maximum of Sh2,556 per kilogramme,” he said in a telephone interview.

According to him, 28 buyers participated in the Tanecu auction, while 27 attended the Mamcu auction.

Reports from Mtwara show that Tanecu has experienced a minimum price decline of Sh775 and maximum of Sh842, with Mamcu experiencing a minimum drop of Sh744 and maximum of Sh891 when prices are compared with the Sh3,300 offered by the government last season.

Mr Alfred said 75 companies have been registered to purchase cashew nuts this season, with 37 having been given licences after fulfilling requirements including depositing bid securities in the CBT account. “Eight companies out of the 37 have deposited over a billion shillings in order to participate in the just commenced season,” he said.

“Depositing large bid securities does not however signify that a large quantity of cashews will be purchased. However, the amount will be determined by market conditions.”

Mr Alfred said this means that companies were ready to purchase large quantities of the crop (over 3,000 tonnes).

According to him, 15 more companies have been registered this year compared to 60 companies registered in the 2018/19 season, expressing hope that more companies will be registered.

According to the 2019/20 regulations, buyers are required to deposit a Sh20 million bid security for 50 to 100 tonnes; Sh50 million for 101 to 250 tonnes and Sh100 million for 251 to 500 tonnes.

Regulations also demand that Sh300 million be deposited for 501 to 1,000 tonnes; Sh500 billion for 1,001 to 3,000 tonnes and Sh1 billion for over 3,001 tonnes.

“My call to cashew farmers is that they should sell their produce using the formal system and avoid informal trading. The government will ensure farmers are paid within ten days after auction,” Mr Alfred said.

He also urged farmers to maintain quality of the produce and avoid including stones and dried cashew apples, thus tarnishing the country’s image and reducing the competitiveness of Tanzanian cashew nuts in the international market.

Mr Alfred said unsold cashews in a given auction would be re-auctioned in the following auctions, noting that the produce would be pronounced sold upon farmers’ satisfaction with the offered price.

Yesterday, Amani Agricultural Marketing Cooperative Societies (Amcos) secretary Idrisa Mwanja said the auctions were attended by hundreds of farmers, buyers and cooperative leaders.

“At least 21 buyers have dropped their bid offers in the box until this afternoon as more stakeholders continue arriving for the auction,” he said.

Mr Mwanja added that no major changes have been recorded in both towns especially influx of people outside the district probably because it was the beginning of the season.