Cashew nut farmers are putting on broad smiles as price for the crop has risen by about 6.5 per cent during the past two weeks of the ongoing marketing season. The price rise could be attributed to a slower supply amid a high demand for the produce from buyers.
During the first day of the crop auctioning this season on October 31, 2019, over 20,000 tonnes of Raw Cashew Nut (RCN) was auctioned by Tandahimba and Newala Cooperative Union (Tanecu) as well as the Masasi and Mtwara Cooperative Union (Mamcu) at a minimum price of Sh2,409 and a maximum price of Sh2,559 per kilogram.
That was equivalent to a decrease of 24.7 per cent on average compared to what the government offered when it bought one kilogram at Sh3,300 after buyers offered only Sh1,500 per kilogram.
But in a thigh of relief to farmers, the prices has since appreciated to a maximum of Sh2,727 maximum and a minimum of Sh2,510 per kilogram.
Reports from the Cashew nut Board of Tanzania (CBT) show that eight auctions have taken place in various growing regions and that over 50,000 tonnes of the product have been sold.
Reports show that it was an auction by Ruangwa, Nachingwea and Liwale Cooperative Union (Runali) on November 10, 2019 that yielded a maximum price of Sh2,727 per kilogram.
The auction was held at Hulia Village in Liwale District.
It was the auction by Mamcu on November 3, 2019 in Michiga Village in Masasi that recorded the lowest price of Sh2510 per kilo.
Buyers are demanding nearly 200,000 tonnes in the auctions but farmers supplied only over 50,000 tonnes of the produce, available reports show. Reports show that buyers were in need of procuring over 48,244 tonnes during the second auction held by Mamcu on November 3, this year but only 13,629.3 tonnes was supplied.
In total, Mamcu has supplied 20,907.3 tonnes for sale including 7,278 tonnes sold during the first auction held on October 31, 2019.
Buyers wanted 49,190 tonnes of the produce during the second auction that was held on November 3, but only 13,155 tonnes could be supplied.
“Buyers bade for 4,342.7 tonnes of cashews during the second auction by Runali. However, only 438.7 tonnes was availed,” reports read.
Tunduru Agriculture Marketing Cooperative Union (Tamcu) took its 1,124.8 tonnes of cashews for auctioning on November 3, 2019 but buyers demanded at least 10,802 tonnes of the produce.
Lindi Mwambao also sold 1,963.002 tonnes of the produce on November 9, 2019 to nine buyers who offered a maximum and minimum price of Sh2,701 and Sh2541 per kilogram respectively.
It was the first auction for Lindi Mwambao after after postponement of its earlier auction that was slated for November 1, 2019 due to insufficient quantity of the merchandise.
Cooperative union leaders believe with low supply, prices will keep escalating.
“This is because of declining harvests registered in various cashew growing regions. For instance, Mamcu provided 13,000 tonnes during the second round of the auctions, despite demands for nearly 50,000 tonnes,” Mamcu general manager, Mr Protence Rwiza, told The Citizen yesterday.
He said although many buyers have been registered by the CBT, they export to the same major dealer outside the country, something which reduce competition, hence leading to lowering of prices.
“They mainly differ in the quantity and timeframe for the product to be delivered, hence those contracted to supply a large amount within a short period render a large market competition and provide better prices,” he said.
Tanecu chairman, Shaibu Aifai, said farmers expected prices would hit over Sh3,500, noting however that they were disappointed with the ongoing trend.
“We are experiencing poor harvests this season, something that would increase buyers’ competition and benefit our farmers. But, things are going the opposite,” he said.
He said farmers were frustrated because they were of the view that there was a limited time before December when buyers usually shift to other markets.
Mr Hamis Halfani, a farmer from Tandahimba said price should reach at least Sh3,500 per kilo for farmers to benefit, noting that they incur costs of production costs.
The CBT acting director general, Mr Francis Alfred, said there was no reason to worry, saying price will continue increasing as buyers demand remains high.