Tanzania Sees 2015 Cashew Crop Dropping 40 Percent on Poor Rains

Tanzania’s cashew nut production could decline by 40 percent this year as poor rains in major growing areas hurt harvests in Africa’s fourth-largest producer.

Tanzania had estimated it would match the 200,000 tons achieved last year, but may only manage 120,000 tons in 2015, according to Cashewnut Board of Tanzania Director General Mfaume Mkanachapa Juma.

Cashews are Tanzania’s second-largest foreign exchange earning crop after tobacco, according to the Bank of Tanzania. At least 700,000 Tanzanian households rely on the crop for 75 percent of their annual income, according to the board.

“The cashew germination and flowering was very good, but the moisture stress in the soil resulted in shedding of flowers and they could not bear the final fruits,” Juma said Monday in an interview during an industry conference in the commercial capital, Dar es Salaam. “The season is underway now but looking at the collections, the speed and quantities in the warehouses, we don’t think that we can get there.”

Last month, Tanzania started a commodity exchange that is expected to improve sales through transparency, according to Juma.

The drop in production is driving demand, with average prices now at 2,700 shillings ($1.25) per kilogram from 1,800 shillings last year, he said.

Most of Tanzania’s produce is exported as raw nuts and authorities there want to establish more local processing from 40 small-scale factories that will also make by-products such as cashew nutshell liquid, that’s used in pharmaceuticals.

The country, East Africa’s largest economy after Kenya, is the continent’s fourth-largest producer of cashews behind Ivory Coast, Nigeria and Guinea-Bissau, according to the African Cashew Alliance, an industry lobby of kernel-trading companies.