Why Tanzania is the World’s most important country in the global cashew economy
Cashew nuts are grown in the Southern part of Tanzania, on the opposite side of the border of the cashew-growing region of Mozambique. Cashew nuts originate from Brazil; Portuguese traders brought the seeds to Africa in the 16th century. The trees soon found their way to Mtwara region; an Indian Ocean port on trade routes once plied by David Livingstone. Tanzania is now the World’s 3rd largest producer of cashews and maybe the world’s most important, with production growing 450% between 2004–2017.
Getting back to Basics
With consumers becoming more health conscious, global demand is steadily growing for cashew kernels. But what these consumers seek is the crescent shaped kernel that comes out of the shell. To remove the shell, the raw seed must first be heated/steamed before cracking and then dried to remove the inner skin. This process yields the edible cashew nut that is easily recognizable to most consumers. At the moment 90% of the nuts produced in Tanzania are exported with the shell and being processed in India and Vietnam before being re-exported to the US and Europe.
But this was not always the case. Tanzania actually had two operating factories that processed most of the crop pre-independence. A company called Oltremare ran these factories; a formidable cashew equipment manufacturer from Italy and an influential figure in the shifting global cashew economy. The Vietnamese government actually commissioned a study of Oltremare’s machines when developing its own cashew industry. Vietnam now produces some of the best cashew processing equipment and is the largest cashew processor in the world, with a processing capacity of over 1.2million tones. They have successfully ridden the wave of growing cashew production in Africa, with annual imports of 1,000,000MT of Raw Cashew from Africa. As a continent it’s time we take back our processing, and it’s starting to happen now. Ivory Coast is leading the way with game-changing policy to attract investment in the processing sector; they are also the largest cashew producer in Africa. This is also not their first initiative to bring processing back to the continent; Ivory Coast is also the world’s largest cocoa producer. They have successfully increased the share of cocoa being processing in country.
How does Tanzania get back to processing all of it’s own cashews?
It starts with a vision to build a thriving cashew nut industry in Tanzania. I will give you a few reasons why Tanzania is the most important cashew producing country and how we can get the most value by processing our own crop.
Production of Raw Cashews Nuts in Tanzania has grown from 72,000MT in 2004 to 313,000MT in 2017, a 450% increase in that period. Production is also going to continue growing as Tanzania has embarked on an aggressive cashew-planting program in 13 of the 26 regions of the country. In 2017, 10 million cashew seedlings were distributed to farmers in regions that offer the right conditions for cashew production. Tanzania is home to one of the best cashew research programs in Africa; it is the first African country to release cashew hybrid varieties. These varieties offer superior processing characteristics; high out-turn, high yield, ease of peel removal. Tanzanian cashews are regarded as being one of the best quality origins in the world.
I recall when I visited Vietnam in 2015 to procure cashew-processing equipment; I visited one of the top-5 processing companies at the time. With a production capacity of 30,000MT per annum; this was a big operation. What stood out is the automation of the plant and the noticeable lack of labour. I knew at that moment that if you wanted to compete with the processors in Vietnam you had to invest in mechanization. If you want to be the best, you have to learn from the best! When the owner of the factory learned I was from Tanzania, the first thing he asked me was ‘How can you help me get raw cashews from Tanzania?’ He proceeded to tell me that ‘Tanzania has the best cashews, they are very big, white and my customers love them.’ This was validation that we have a high quality product, but we are yet to realize its true value.
The Best Cashew Research Program in Africa
In Tanzania, cashew breeding started in 1958 with germplasm collection from various countries in Asia and Africa. An active cashew breeding program took place in the mid-1980s when mass selection was carried out and a number of cashew clones were selected for further evaluations. Between 1991 and 2006 cashew hybrids developed by controlled hand pollination and half-sib of dwarf cashew types were evaluated at research substations in Nachingwea (Lindi Region) and Chambezi (Coast Region).
Out of these 22 elite cashew hybrids and 16 dwarf varieties were released and registered in 2016 and 2017 respectively. Tanzania became the first country in Africa to release commercial cashew varieties and cashew hybrids, which are widely available to growers.*
*sourced from Prof. Peter Massawe
With new plantings of 30 million trees in 3 years through the government seedling program and access to high quality planting material, Tanzania can reach production of upto 1,000,000MT p.a. in the next 7–10 years.
One of the considerations for a thriving cashew nut processing industry is access to quality raw materials. With Tanzania being a high quality origin and with production growing; this makes it very competitive in the global cashew economy.
Favourable Harvest Period
Tanzania is the largest cashew producer in the Southern Hemisphere, which harvests between October-February. This is advantageous as the majority of cashews are produced in the Northern hemisphere; Tanzania’s harvest occurs at a time that allows us to take advantage of the limited supply that is available at that time. This becomes an even bigger advantage as Tanzania continues to increase its share of global cashew production. The prospect of further value addition creates an even greater influence on the market during that time.
Declining Cashew Kernel Exports from India
India is the world’s largest producer of cashews; it is also the largest consumer of cashews. With rising incomes in India, consumption has continued to grow. This has led to a decrease in the quantity of cashew kernels that India exports to the international market. India’s Cashew kernel exports have declined 31% from 2006–2016. This has created a gap in supply of cashew kernels. Tanzania has an opportunity to fill this gap, which is presently being filled by Vietnam. Vietnam hegemony in the cashew nut processing sector is not sustainable as it relies too heavily on imported Raw Cashews from Africa. With an Africa-led push for industrialization and processing of it’s own raw materials the cashew processing landscape will change. Tanzania with its high quality cashews, growing production, favourable harvest period and proximity to Middle East and European markets has an advantage.
How do we get there? Processor focused policy.
Let’s take a look at an example of processor focused policy from Ivory Coast, the largest cashew producer in Africa. It leads Africa with a processing capacity of 109,500MT and commissioning of new mega-factories of 30,000MT+ p.a. capacity in 2018/19.
In addition to the above, Ivory Coast hosts a bi-annual International Cashew Processing Equipment and Technology Show (SIETTA). They invite all the cashew equipment manufacturers to showcase their equipment for Ivorians and Africans to see the latest technology and to encourage investment in the cashew processing sector.
I believe that with political will, anything is possible. What we have seen in the last few weeks with the cashew nut saga that has taken place in Tanzania is a renewed focus on cashew and the processing sector. Let us take this energy and channel it into effective policy that will support a thriving processing industry. The African Cashew Alliance will hold its next international conference in Tanzania in November 2019; this will be a great platform for young Tanzanians to learn about the industry and the opportunities. As an African Cashew Alliance Ambassador for Tanzania I will make sure that we have equipment manufacturers showcasing the latest cashew processing technology, we will provide the technical assistance and advice on establishing modern processing facilities. We have to start here and declare that by 2025 we will be processing 80% of what we produce. By 2030 we must be processing 100% of our production. With measurable, time-bound goals we will get there. It’s about time the world knew that Tanzania produces the world’s best cashews.
About Fahad Awadh: I am a young Tanzanian entrepreneur, co-Founder and Chief Cashew Officer at YYTZ Agro; focused on value addition and building an inclusive cashew nut value chain. Forbes’ 30 Most Promising Young Entrepreneurs in Africa in 2017 and 2018, African Cashew Alliance Ambassador for Tanzania, Winner of Best Young SME in Agriculture Award at African Development Bank’s — Africa Investment Forum. Interview with Forbes’ on my journey.