Tanzania’s 2022/23 Cashew Marketing Year of to Tough Start, January Exports Bring Relief

Cashew Nut Kernel

Published Feb 14, 2023

Tanzania, the largest cashew producer in the Southern Hemisphere, could face oversupply as exports have been disappointing and demand from Vietnam and India remains slow. Over the last 5 years, the country exported an average of 99,051 mt of raw cashew nuts to Vietnam and India between September and December. This 2022/23 marketing year, exports reached only 25,298 mt over the same period. The situation improved slightly as strong exports of 49,282 mt to Vietnam were recorded in January. However, Tanzania's cashew industry could face tough times over the short term, as it will now have to compete with Northern Hemisphere cashew producers outside of its normal trading window.

Tanzania produces only around 5% of the globe’s cashews. However, it is the Southern Hemisphere’s largest cashew producer and plays an important role in the inventory management of large importers. The harvest in Tanzania starts in late September, and the peak export period is from October to March. During this time, Northern Hemisphere cashews are out of season, and importers like Vietnam turn to Tanzania to top up their inventories as needed. However, so far during Tanzania’s 2022/23 marketing year, exports have been disappointing and demand from Vietnam and India has been slow. The situation improved in January, as Vietnam made large purchases, albeit at low prices. Even with the jump in January, Tanzania could be stuck with huge inventories when Northern Hemisphere cashews are back in season.

On average, 98% of Tanzania’s raw cashew nut (RCN) exports are destined for Vietnam and India. Over the last 5 years, Tanzania exported an average of 149,913 mt between September and January. This 2022/23 MY, Tanzania exported only 25,298 mt between September and December and it could increase to around 90,000 mt when January's exports are added to the tally. According to Tridge’s representative in Tanzania, Linus Ndongwe, in January demand for quality cashews increased slightly, as a result of an increase in kernel prices. According to the Vietnam Cashew Association (VINACAS), Tanzania exported 49,282 mt of RCN to Vietnam in January. However, prices have been remarkably low. The unit value of these imports was only USD 1,348/mt compared to the unit value of USD 1,435/mt paid by Vietnamese importers in January 2021. Within Tanzania, where most cashews are sold through the country’s auction system, even premium cashews were sold at prices as low as TZS 1,650/kg (USD 0.71/kg) compared to TZS 2,150/kg (USD 0.92/kg) last year, as stated by Linus Ndongwe.

Source: VINACAS, Ministry of Commerce and Industry of India

Despite strong exports in January, Tanzania will be left with an oversupply of cashew nuts when the Northern Hemisphere crop starts coming in. Tanzania typically exports more than 85% of the crop between September and March, but this marketing year cashews will be in storage for a longer period. Long-term storage of cashews in Tanzania is possible given the high standards of union warehouses according to Linus Ndongwe, and due to the high value of cashews in the country, the cashew union storage facilities have been built to meet international standards. The country also has a modern warehouse receipt system, tracking ownership of cashews, which simplifies long-term storage. After cashews are harvested, farmers deliver their crops to Agricultural Marketing Cooperatives, which in turn deliver cashews to union warehouses where cashews are tested for quality and warehouse receipts are issued.

Even with the ability to store cashews at optimal conditions for an extended period, Tanzania’s cashew industry could be in trouble over the short term. The Northern Hemisphere produces more than 85% of the globe's cashews. With most of the globe’s processing taking place in Vietnam, their own cashews, followed by that of Cambodia and other nearby countries could be prioritized. Cashew prices are already hovering near their lowest levels in recent history, and now Tanzania would have to compete outside its normal export window.