Tanzania plans to reactivate cashew expansion, targets 700,000 MT for the 2025/26 season

Cashew Nut Kernel

Tanzania

Published Dec 17, 2021

In 2019 Tanzania set ambitious targets of becoming the world's largest exporter of cashew nuts. These targets included increasing production from 313,826 MT in 2018/19, to reach an impressive 1 million MT in the 2023/24 season. These production targets fell flat for multiple reasons. However, recently these efforts were renewed as cashew seedlings are being distributed to farmers, and training for the cultivation of cashews is planned. The new target set by the government is to increase production to 700,000 MT in 2025/26.

The Tanzanian cashew industry

Tanzania is the southern hemisphere’s largest cashews producer and ranks around 6th overall. The cashew crop for 2020/21 season was 206,718 MT. Although it was the lowest crop in four years, cashew production has been expanding steadily over the last decade, from 121,135 MT ten years ago.

Nearly all cashews get exported in-shell, as there is little production capacity inside Tanzania (another industry targeted for development by Tanzania’s government). As a result, most cashews are exported to Vietnam and India, where they are processed further.

According to FAOSTAT figures, the area harvested in 2019 was a massive 980,363 ha, up from 433,746 ha 5 years before. Exports of in-shell cashews in 2020, was a huge 320,862 MT, according to ITC Trade Map data. Both production and export figures are reported on a raw cashew nut (RCN) basis, and it makes little sense that exports are so much higher than production. Virtually no imports into Tanzania are reported that could account for the difference. Nonetheless, both production and exports are earmarked for expansion as the potential of the cashew industry cannot be overstated.

Sources: FAOSTAT, Cashewnut Board of Tanzania, The Citizen, ITC Trade Map

Ambitious plans from 2019

In the 2018/2019 season, cashew nut production reached an impressive 313,826 MT. At this time the government of Tanzania announced plans to triple cashew nut production to more than a million MT over the following 5 years.

While these were ambitious plans, it wasn’t completely unrealistic. They were based on new plantings of 1.5 million new trees per year and more than 210,000 ha per year added to the area planted under cashews. Cashew nut trees take around 3 - 5 years to produce nuts. The Tanzania Cashew Nut Forum held in July 2019 set its eye on getting investors for the industry. Investment in processing capacity and increasing cashew yields from 0.3 MT/ha to 1.0 MT/ha were some of the key selling points.

These plans were only moderately successful as the focus was on increasing processing facilities, finding investors for the industry, and assuring fair prices to farmers, instead of providing inputs to farmers. In the end, little changed, and only around 1,500 MT of shelled cashews were exported in 2020, compared to 320,862 MT in-shell cashews. Government intervention prices did somewhat help farmers, who felt they were being exploited by traders before. However, another critique was that, while the government intervention in the industry provided farmers with higher prices, payment delays discouraged the rapid expansion of production. Add to that the global pandemic that disrupted nearly all industries in 2020, and for multiple other reasons, production targets were never reached.

Revision and reactivation of plans

After little came of the plans from 2019, the government now plans to reactivate the program, but with more conservative targets. Under the new projections, cashew production is forecast to expand to 700,000 MT by the 2025/26 season. There will also be a shift in the focus of government support and intervention. According to the Cashewnut Board of Tanzania (CBT), cashew saplings will be provided and distributed to farmers and UDS 87,000 (TZS 200 million) has been earmarked for this part of the project. The CBT expects 14.9 million cashew trees to be planted over the span of this project.

Should this project be successful, it will launch Tanzania into the top 4 or 5 cashew-producing countries. However, there are still many hurdles. Global input prices, especially that of fertilizer, have skyrocketed which could put farmers on the back foot. Furthermore, cashews are a medium to long-term investment and farmers will have to wait for 3 to 5 years to reap the benefits, which means they might opt for crops with shorter cashflow cycles instead.