Tanzania: Farmers, buyers in cashew row

MAJOR cashew nuts buyers in the country say they stopped buying the commodity due to the fall of prices in the world market and the move left over 90,000 tones of the crop worth 110bn/- stranded in warehouses.

Olam's Senior Vice-President and Cluster Head for East Africa, Mr Sridhar Krishnan, told the 'Daily News' on Tuesday that prices in India, a major buyer of raw cashew nuts, had gone down by 40 per cent since last September.Mr Krishnan said the fall of prices in India was due to over supply in the market with cheaper cashew nuts from West Africa, particularly Ivory Coast and the depreciation of the Indian currency, Rupee.

"It is not true that buyers don't want to buy but they can't buy at higher prices while they know they can't sell in the world market," said Mr Krishnan, whose company bought 15,000 tonnes at 2,000/- per kilo for local processing.

He said when the prices were better in India the buyers bought as high as 2,000/- per kilo, but since the trend changed local buyers also changed their interest.He said while the Rupee depreciated, making imports expensive, Tanzanian shilling appreciated causing double impact to the price of the commodity.

According to N'Guessan Koffi Rodrigues, the Ivory Coast National Director of Perennial Crops, Ivory Coast is the world's second largest producer of cashew nuts.It produces about 350,000 metric tonnes of the cashews a year, of which about 98 per cent are shipped to India and Vietnam for processing. The remainder are processed locally and exported to Europe and the US, Rodrigues said.

Ivory Coast's nuts are mainly produced by about 250,000 small-scale farmers in the northern part of the country.The Cashew nuts Processors Association (CPA) Secretary General, Mr Joseph Haule said  the problem of cashews was accelerated by Members of Parliament from Lindi and Mtwara's failure to acknowledge expert opinion on the pricing of cashews.

Mr Haule said experts from select committee representing all stakeholders, based on world market trend, had proposed an indicative price of 950/- per kilo and farmers accepted, but MPs and councilors convinced farmers to sell at 1,200/- per kilo to co-operatives.

"Politicians convinced farmers to raise the  price without considering expert opinion. I think what they want is for the councils to get more money because they take five per cent on every kilo sold," Mr Haule said.In the 2010 season cashew nuts  sold at 800/- per kilo, according to Mr Haule.

Mr Haule whose CPA members bought their required quantities for local processing, said the association had written to the government to explain the situation.Mr Haule and Mr Krishnan called for swift measures to reduce the prices so that the stranded cashew nuts could be sold before the prices drop further in the world market as the Ivory Coast harvest season nears.

"As the short term solution the government must convene a stakeholders' meeting to get to the bottom of the matter," Mr Haule said, adding that if the prices will be reduced to 950/- per kilo, all stocks would be bought in a few days.They also said the long-term solution to this problem is for Tanzania to encourage more local processing of cashew nuts so that it could be sold in other markets such as Europe and the US.About 160,000 tones were produced this season up from 120,000 last season.

Source: http://dailynews.co.tz/index.php/local-news/2904-farmers-buyers-in-cashew-row