In a letter made available to The Banker, the companies said mid last year the companies (names withheld) hired Chinese researchers who observed that development of cashew nut industry in Tanzania is mainly stymied by its natural features.
In the letter, the processing companies say that if the importation ban will not be lifted they will be forced to close shop because they incur losses every year.
The letter also quoted research findings by Irish consultant James Fitzpatrick hired by the government through the Ministry of Industry, Trade and Investment some years back to find challenges the sector faces in the country.
“The harvesting season of cashew nut is from October to November while in most other major origin countries, including West Africa, India, Indonesia and Vietnam, the harvest season starts in February.
“Therefore foreign buyers would gather in Tanzania to purchase cashew nuts in October and November, and consequently, the selling price increases due to fierce competition,” the companies lamented in the letter.
It further said that as a result the profit margin of the business shrinks tremendously, causing massive losses.
“Our study shows that operating a cashew nut plant Tanzania costs four times more than in other origin countries.
That’s why in the past decade, many state-owned and factories in Tanzania survived briefly. The most recent example is the factory in Lindi which closed shop last year,” the letters says.
Due to the above mentioned problems, the companies have proposed that the government lift the ban on importing raw cashew nuts during the off season in Tanzania from February to September.
The companies believe that the lifting of the ban would help the industry in the country to grow faster and stronger.
“Because importing would allow local processing factories to buy plenty of cashew nuts at competitive prices during off season for all year operations.
“This will help attract more investment in the industry and create more jobs and increase government revenue collection.
With increased local processing capacity, cashew nut farmers will also be motivated to produce during the cashew nut season,” the letter said.
The companies further advised the government to borrow a leaf from countries like Vietnam and India who permit importation of the crop from all over the world, saying the aim is to protect employment of their people and also increase taxation.
“We have not yet closed shop but we hope the government will heed to our advice and lift the ban. Vietnamese factories are buying the crop from West Africa while our factories remain redundant,” he said.
The Cashew nut Board of Tanzania (CBT) did respond to questions from The Banker when sought for comment.
An official from a local cashew nut processing factory who preferred anonymity said that his company employs 300 people at the moment but they could have hired more if the government lifted the ban.
The spokesperson from the Ministry of Industry, Trade and Investment could also not be reached for commented when contacted.
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