Tanzania government is struggling to get buyers for cashew nuts it unilaterally bought from farmers after a November 2018 price standoff with private buyers.
Government opted to buy all harvests after private buyers failed to up their prices at the request of the president John Pombe Magufuli.
The army subsequently collected all the harvests from farmers in the country’s southern region. President Magufuli doubled the price of a kilo of cashew nut from 1,500 to 3,300 shillings, or a little over $1.
Three months on, the Trade and Industry Minister Joseph Kakunda says the government has realised that it lacked capacity to process all the nuts. They are now in search of buyers for 200,000 tonnes of the product.
Government says the money it is seeking from the sale will be used to boost processing capacity for the next harvest. The Minister also disclosed that payment to farmers was advanced as promised.
“We will buy all the cashew nuts, they will be collected by our army, and we will find a market for it as a government,” Magufuli was on record as saying at the time.
Magufuli insisted that the country had the money to buy the nuts and had ordered a multi-sectorial team comprising the army, the country’s agriculture development bank and relevant agencies to handle the issue.
Majority of Tanzania’s cashew is usually exported in its raw form for processing in India and Vietnam before it is re-exported to the US and Europe.
Government’s decision was been criticized by businessmen and the opposition who denounce an interference in trade liberalization. But the government has defended its decision to keep one of the country’s main export crops.
Tanzania expects a production of 210,000 to 220,000 tonnes for the year 2018.