Maputo, Mozambique — The MOCITA cashew processing factory, in Xai-Xai, capital of the southern Mozambican province of Gaza, is to close as from 30 April because of lack of raw material, making about 1,500 workers unemployed.

A further reason for the closure is the low prices for processed cashew kernels, on the world market. Current prices are the lowest for the past 15 years.

The decision to close down was announced by the factory's general director, Derek Higgo, who told a news conference on Thursday that the decision was taken in agreement between the company's management and the workers.

Because the management is aware that the factory may remain closed for a long time, all the workers are to be laid off and compensated.

It is estimated that the redundancy payments will cost the company about 1.2 million US dollars.

Higgo said that the resumption of activities is dependent on several factors, including an improvement of prices on the international market, and the quality and quantity of cashew nuts available from the peasants, which will determine the viability of the company.

MOCITA was the last of the sizeable cashew factories in southern Mozambique.