Tanzania

Kenyan firm lost bid for Tanzania cashews despite higher price offer

Tanzanian cashew nuts
A Kenya company was among two private companies that bid for Tanzanian cashew nuts at a price above the minimum set by the government but were locked out. PHOTO | NMG 

Dar es Salaam.

A Kenyan company was among two private companies that bid for Tanzanian cashew nuts at a price above the minimum set by the government but were locked out.

The Kenyan company, Indopower Solutions, had offered to buy 100,000 tonnes at $1,535 a tonne, while Kerera from India bid for 30,000 tonnes of raw cashews at $1,650, an official report, seen by The Citizen, shows.

The price per kilo translates to TSh3,500 (Sh157.3) and TSh3,800 (Sh169.3) for the offer by the Kenyan and Indian companies respectively.

Tanzanian President John Magufuli had directed that farmers be paid a minimum price of TSh3,300 (Sh146.9) per kilo for their produce.

advertisement

The companies, however, did not get the opportunity to buy the cashews after the move by the government to lock out private buyers from the market.

The two were among nine private buyers who had shown interest in Tanzanian cashews and beat the set government deadline last month to provide their bids through the office of the Prime Minister.

The Tanzanian government, however, intervened to buy the entire produce itself after President Magufuli announced he was unsatisfied with the buyers’ response and speed.

Dr Magufuli had told the prospective buyers that if they thought the price was too high, the government would buy all the cashew nuts and seek a market for the crop.

He also said all the cashews would be processed locally.

Local companies

There were three local companies in the list who bid for between 500 to 100,000 tonnes for a price that was however not indicated in the report.

Other companies shown in the list are Vinacas from Vietnam, which would have bought the largest consignment of 220,000 tonnes at a price $1,250 per tonne, which is equivalent to TSh2,875 (Sh128) per kilo.

Tanzanian firms that bid were Jonasia Enterprises (100,000 tonnes), Biotan Company (500 tonnes) at a price of TSh3,013 (Sh134.2) per kilo. T.masasi Agro industries also from Tanzania wanted to buy 25,000 tonnes.

Other companies named in the report are Chino Sino Light from China (20,000 tonnes) and a Canadian company, Best Gourmet Cofee Co. Ltd, which wanted to buy 200 tonnes.

According to the report, Tanzania expects to harvest 270,000 tonnes of cashews this season from an earlier estimate of 210,000 tonnes. The harvest was 313,826 tonnes last year.

The reportwas drafted by a task force assembled by the government on the implementation of the cashew nut operation being overseen by the Tanzania Peoples Defence Force (TPDF).

It details several aspects of the cashew production and marketing sector to inform government decisions.

Sharp drop

The Tanzanian government first intervened in the marketing of cashew nuts when farmer associations and cooperative unions refused to sell their produce at the prevailing market price ranging from TSh1,900 (Sh84.6) to TSh2,717 (Sh121) per kilogramme, depending on the quality.

This was a sharp drop from an average of TSh3,600 (Sh160.3) offered last season. The highest price last season was said to have been TSh4,000 (Sh178.18) a kilo.

The government told The Citizen last week that it has already paid TSh50.02 billion (Sh2.23 billion) to 49,770 farmers from 199 verified farmer associations (Amcos), with agriculture minister Japhet Hasunga noting that a total of 228 Amcos had been verified.

Contacted by The Citizen, many of the locked out companies did not return answers sent to them via email. Ms Joyce Mmasi from Jonasia Enterprises said she couldn’t say anything on the matter.