Tanzania Shuts Cashew Auctions, State Takes Over Purchases
(Bloomberg) -- Tanzania President John Magufuli ordered all cashew auctions closed and said the government will buy the crop from farmers at a 10 percent premium of what it requires traders to pay.
The state-owned Tanzania Agriculture Development Bank will buy the nuts at 3,300 shillings ($1.45) a kilogram, compared with the 3,000 shillings reserve price set by the government for auctions, Magufuli said at a swearing-in ceremony for two ministers. Traders have boycotted the auctions and insisted on paying 1,550 shillings, which farmers say is insufficient to cover costs.
The president replaced his agriculture and trade ministers over the weekend, saying that even with prices falling globally, the ministries and government agencies have failed to protect farmers from exploitation. The nuts are the nation’s leading agricultural export by value and earned $340.9 million in the year through March 2017, according to the central bank.
“It’s true the price of cashews has dropped in India and Vietnam, but our bodies, such as the commodity exchange and Tantrade, have not bothered to help farmers,” he said in the commercial hub of Dar es Salaam after inaugurating Japhet Ngailonga Hasunga as agriculture minister and Joseph George Kakunda as trade, industry and investment minister. “There has been a coordinated attempt by traders to frustrate farmers so that prices can fall.”
Traders have purchased 90,000 metric tons so far and that the government will buy what’s left over, Magufuli said. Army trucks will transport the cashews from collection points across the coast to a warehouse in Lindi town in southeastern Tanzania, where they will be processed and sold to international buyers.
The cashew harvest this year is expected to range between 210,000 tons and 220,000 tons, Magufuli said. Production rose 18 percent to 313,826 tons in the 2017-18 season, according to the Cashew Board.
“Our cashews are first class and should attract better prices in the international markets,” Magufuli said.
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