Tanzania – Kenyan registered firm, Indo Power Solutions Ltd has entered into an agreement with the Tanzanian government to purchase 100,000 tonnes of cashew nuts valued at $180.2 million.
This comes a few days after the Tanzanian Government unveiled plans of selling 200,000 tonnes of cashew nuts in its warehouses was
Indo Power was among nine private buyers that bid to buy the crop from farmers last year but the plans did not come to be after President John Magufuli ordered the Agricultural Development Bank to purchase the country’s entire output.
The deal was signed between the Cereals and Other Produce Board director Hussein Mansour and Indo Power’s chief executive Brian Mutembei.
However, Indo Power is not known to trade in or process cashew nuts and currently there is no company in the region with the capacity to process 100,000 tonnes.
Moreover, despite being the leading producer of the commodity in East Africa, Tanzania’s factories have a capacity to process about 50,000 tonnes annually.
According to the East African, Indo Power will directly pay the central bank for the raw cashew nuts before the commencement of shipping the produce to Kenya.
Industry and Trade Minister Joseph
Tanzania produced about 240,000 tonnes of cashew nuts during the 2017/2018 season, of which the government bought 213,000 tonnes for which it paid farmers US$180.2 million.
By the time the country struck the deal, traders were sceptical over the strategy by which Tanzania would get its cashews to the main buyers in India and Vietnam before an influx of the commodity from other major producers in South Africa and West Africa later in the year.
The bulk of the raw cashew nuts, which are yet to be shelled, are shipped from Tanzania and other African countries to be processed, mainly in Vietnam and India.
Earlier on, minister of agriculture, Japhet Hasunga said that the government was contemplating bulk sales of cashew nuts as opposed to small scale processors.
According to Bank of Tanzania, the subsector brought in $340.9 million in foreign exchange in 2017 — superseding earnings from coffee, cotton, tea, cloves and sisal combined at $270 million.