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History Of The Production Of
Cashew Nuts In Tanzania

Cashew production and trade have, for a long time now, played an important role in the Tanzanian economy. Ever since the sixties, cashews have been Tanzania's fourth-largest source of foreign exchange, after coffee, cotton, and sisal. Cashews are cultivated by more than a quarter of a million small farmers. Although cultivated throughout the coastal area, cashews have long been the main source of agricultural income even in the southernmost parts of the nation, including Lindi, Ruvuma, and Mtwara. The dissolution of the cashew production economy has had a significant negative effect on the standard of living in these regions. Cashew was probably introduced to Tanzania from Mozambique in the 16th century and was initially used to control soil erosion in the nation's coastal regions. Cashew groves grew naturally during this period, and there are no signs of any specialized production or commercial trade having taken place until late in the last century.

Between World War 2 and the early seventies, Tanzania developed one of the largest cashew nut industries, accounting for around thirty percent of the total global production and ranking among the top exporters. Cashews have become one of Tanzania's main sources of foreign exchange and have provided an important source of revenue for about a quarter of a million smallholder farmers. Tanzania's cashew trade was initially developed by private traders, although during the sixties, a multilevel marketing system comprising local cooperative societies, regional cooperative unions, and a national marketing board was imposed. In effect, the role of private traders being marginalized and ultimately completely abandoned.
This multilevel marketing system has not worked effectively. Rising marketing costs, as well as falling real farm gate prices, and the forced villagization of smallholder farmers, have significantly undermined the incentives to produce cashews. From the mid-1970s, the industry experienced a steady and dramatic decline. By the late 1980s, commercialized cashew production accounted for only a quarter of its production levels during the seventies, as most of the large government processing factories were inactive, and Tanzania's reputation for selling high-quality products was severely hit.
With the cashew industry on the verge of total collapse, the government of Tanzania announced in 1991 that the country’s cashew economy would be liberalized. This decision meant that private companies would once again be allowed to engage in trade. The liberalization of the cashew market was seen as a sort of 'test case'. The results of which would influence the speed and nature of institutional reforms in the processing and marketing of other major industrial crops in the region, especially coffee, cotton, and tobacco.

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The Current State Of Cashew Nuts Production In Tanzania

Cashew production in Tanzania ranks 16th in terms of the farm gate value it generates. However, cashews are an important export crop generating significant foreign exchange income. The area under production in recent years has ranged from eighty thousand to ninety thousand hectares. Production levels have decreased significantly from what they used to be in the early 2000s. Recently, there has appeared to have been a substantial upward trend. Traders said high prices for raw cashews are the main reason for the increase in production. Albeit, in general, there are several systemic constraints that prevent Tanzania from further increasing its production.
The main production regions are Mtwara, Lindi, Coast, as well as Ruvuma and Tanga. During the late 2000s, the Mtwara and Lindi regions produced more than eighty percent of the entire national production. The vast majority of the cashew production in Tanzania takes place in the districts of Mtwara, Nachingwea, Tandahimba, Newala, Mkuranag, and Masasi. Efforts have also been made to introduce cashew cultivation in areas like Iringa, Dodoma, and Singida, but the results have been rather poor.
More than eighty percent of plantation owners are smallholder farmers of around one hectare. They use their own labor or additional domestic labor. Considering the structure of land ownership and demographics, the majority of cashew farms are owned by older people. Many of these farmers are too poor to hire labor, apply pesticides, or invest in plantation rejuvenation. Meanwhile, young people have left the villages where most of the cashew production is located in search of better incomes and job opportunities in urban centers.
A minuscule proportion of cashew production in Tanzania takes place in medium to large-scale plantations that are owned by people who don’t live on the plantations themselves. This means that the plantations are managed by hired labor. Many of these are poorly managed, and some of them were abandoned when cashew production became less profitable. In order to bring these plantations back into production, they still need to be rehabilitated, and ownership issues need to be clarified.

The Nutritional Value Of Cashew Nuts Grown From Tanzania

Cashew kernels are the main commercial product. The kernel of a cashew nut from Tanzania contains

When it comes to vitamins, Tanzanian cashew nuts contain the main ones being A, D, and E. These cashew kernels also have a high percentage of polyunsaturated fatty acids, especially linoleic acid, and is an important source of sodium, calcium, potassium, magnesium, phosphorus, iron, copper, zinc, chlorine and selenium. Tanzanian cashew nuts are said to help lower blood cholesterol levels and control diabetes.

The Price Of Raw & Processed Cashew Nuts From Tanzania In 2021 - 2022

The three factors detailed below will affect the price of both raw and processed cashew nuts from Tanzania in 2021 - 2022.

The existing export tax reduces the prices of cooperatives at auction and farmers at the farm gate level. For the years where disincentives were passed along the value chain, it can be observed that before the warehouse receipt system was introduced, farmers would get a price in which the cost of the tax was not fully passed on to the farmers, while in recent years the deterrent is higher than the tax at export. The same thing is applicable even for wholesalers.
The introduction of the warehouse receipt system has led to increased disincentives for farmers and wholesalers. It has been observed that the share of the producer price over the price at the export level is declining, so the system does not seem to benefit farmers, even when it coincides with a period of increasing reference prices. However, auction prices seem to follow the evolution of export prices more closely. Thus, the problem that led to the introduction of WRS, the abundance of intermediaries and low producer prices, seems to persist even after the elimination of intermediaries.
Lastly, the increase in the export tax in 2011 (which was aimed at promoting the processing of raw cashew nuts produced within the country), although leading to an increase in disincentives for farmers, does not appear to have produced the expected results. Since the introduction of the export tax, it has been witnessed that the share of total exports covered by shelled cashews has been declining gradually.

Recent price increases have changed the situation in the sector, with the value of raw cashews nearly tripling. This was not only the result of competition between buyers but also a reflection of a tight supply situation prevailing in the international cashew nut markets due to the inadequacies of production in the Ivory Coast, as well as Vietnam and Brazil. The price growth was also convenient as the real price became higher than the indicative price (which was agreed upon at the stakeholder meeting and announced by the Cashew Council at the start of the harvest season). This has been a good incentive for farmers. The price of raw cashew nuts in Tanzania was 0.5 USD in early 2009, increasing to 0.8 USD towards the end of that year, and eventually, in 2010, this price hit a record high of 5 USD.

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The Typical Cashew Nut Production Season In Tanzania

Farm-level raw cashew is harvested over a period of about four months. For most plantations in Tanzania, this period happens to be between the months of October and February. The harvesting and drying process is simultaneous and continues until the nuts, after about three days of drying. Since 2007, the sale of cashews in the country has been organized through the warehouse receipt system, with auctioning taking place on a weekly or bi-weekly basis. This only takes place during the usual harvesting season for cashew nuts in Tanzania. The harvesting of cashew nuts in Tanzania takes place six months earlier than the Indian season. In this context, Indian processors are ready to buy raw cashew nuts from Tanzania even at a higher price, just to keep their operations running year-round. Owing to the differences in the cultivation cycle of the two countries, the demand for raw cashew nuts from Tanzania is quite high in India.

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