Dar es Salaam — The agreement between the government and a Kenyan company to purchase 100,000 tonnes of cashews appears to have collapsed, with a state agency looking for new buyers for the crop.
Tanzania Trade Development Authority (Tantrade) yesterday invited bids for the purchase of 220,000 tonnes of raw cashews and 240 tonnes of processed nuts from interested parties.
In January, the Cereals and Other Produce Board signed an agreement with Indo Power Solutions from Kenya to purchase 100,000 tonnes of raw cashew nuts for Sh418 billion ($180.2 million).
The government then said the quantity was part of 221,060 tonnes it was looking to sell in the 2018/19 season. Yesterday's announcement by Tantrade means 820 tonnes has so far been sold since January.
The permanent secretary for the Industry and Trade Ministry, Prof Joseph Buchweishaija, as well as an insider at the Cereals and Other Crops Board told The Citizen that the Kenyan deal has not materialised so far.
"We neither received any documents to prove that any payments have been made nor trucks transporting the commodity. This means that the commodity hasn't been sold and that's why we, through Tantrade, are looking for buyers," said Prof Buchweishaija in a phone interview with The Citizen.
A source at the crops board who wished to remain anonymous as he was not the official spokesperson on the matter, separately confirmed no cashews had been sold to the said Kenyan company.
Tantrade director general Edwin Rutageruka (pictured) told The Citizen yesterday that the authority was looking for buyers from among hotel owners, industries, shops, private and public institutions to submit their requests. He said they are currently in discussions with several interested parties to purchase the commodity.
According to him, Tantrade is mandated to look for markets for agricultural and other products produced in the country.
"This is a common practice, we don't only promote cashews but we do the same to other products," he said when asked if that wasn't the role of the crops board. He said the board's role is to buy produce from the farmers. Mr Rutageruka said the price for the cashews will be determined by the amount of the product that a buyer will be interested in.
In the January 30 agreement signed publicly with Indo Power Solutions, the Kenyan firm was to pay Sh3,300 per kilo of cashew nuts. The deal was signed by the crops board and the firm's chief executive Brian Mutembei. The signing in Arusha was witnessed by two Tanzanian ministers.
However, the Kenyan media would later report that Indo Power Solutions appeared to be a briefcase company whose ability to raise the billions to see the deal through was questioned. It is unknown why the company has so far failed to honour the deal with Tanzania.
In November, President John Magufuli directed that the government buys all the cashews from farmers to protect them from poor prices by private buyers who were then locked out.
The government said it would pay the farmer Sh3,300 per kilo of the produce at a time when the disbanded Cashewnuts Board had proposed less than Sh2000 per kilo.
Farmers in the country have so far been paid over Sh550 billion for their harvest which is now in the hands of the government.