Mozambique’s Association of Cashew Industralists (AICAJU) said in a statement that it estimates its members will process around one third less this year compared to 2019.
“AICAJU estimates that cashew processing this year will not reach 35,000 tonnes, compared to around 52,000 tonnes processed last year,” the document reads.
The country currently has less than 10 primary processing plants in operation, with some expected to suspend working by August due to lack of raw material, adds AICAJU.
“This drop reflects the impact of a negative marketing trend in recent years, with the national industry has been processing less and less cashew since 2017,” the statement says, noting that in 2018 around 60,000 tonnes were processed in the country.
As reasons for the drop, it cites “the particularly adverse context in which the nation’s industrialists are operating.”
The scenario described is one of “growing aggressive and protected competition from international players such as India and Vietnam and the lack of updated measures to respond domestically.”
AICAJU argues that Asian processors are able to buy raw materials in Mozambique at “unfair” prices, so “distorting the market with a negative impact on the national industry, the processing value chain and, finally, state coffers.”
This year’s harvesting and marketing effort has also been affected by the Covid-19 pandemic, it said, “resulting in a significant drop in the sector”: the price of cashew nuts has fallen by more than 15% since the start of the crisis and by 25% from a year ago.
AICAJU describes as critical “the fostering of training mechanisms and support to producers for the development of cashew trees”, otherwise production will suffer further.
AICAJU represents 10 major plants and seven small and medium-sized industrial units.
It is estimated that the industry sustains around 1.4 million families in the country.
Cashew was in 2018 Mozambique’s 11th export product in terms of revenue, at US$14.8M (€13.6M), according to data from the country’s National Statistics Institute (INE).
Despite the current difficult situation, AICAJU says that it is “confident in the work that the government is doing and believes that, through consultation between the State, private sector and producers, it will be possible, in a timely manner, to implement measures to defend the sector, which will allow a fair 2020 operation for all stakeholders.”
Source: Lusa via Club of Mozambique