Maputo, 03 Oct (AIM) – The Mozambican government has set the reference price for raw cashew nuts at 35 meticais (around 54 US cents, at the current exchange rate) per kilo, for the 2023/24 agricultural campaign.
This is lower than the 37 meticais a kilo reference price used in the 2022/2023 marketing year.
That price was the consensus reached among the producers and the buyers when weighing up all the production costs and the profit margin, set at 15 percent, in accordance with Mozambican law.
In the 2021/2022 agricultural campaign, according to government data, cashew growers received gross income of 5.7 billion meticais (equivalent to about 90 million dollars). Revenue from the export of processed cashew kernels plus unprocessed nuts was 107 million dollars.
According to Ilídio Dias, representing the cashew nut producers, although the new price does not satisfy the producers, it was accepted after considering the dynamics of the market.
“At first there was no consensus, but the producers ended up accepting the fall from 37 to 35 meticais a kilo. So I wouldn’t say that we’re satisfied, because even 37 meticais didn’t correspond to the real cost of the product”, Dias said, adding that the price was set by the government on the basis of international market conditions.
He added that when the campaign actually begins, the market will be able to better assess whether or not the price set is effective.
Currently, India and Vietnam are the main destinations for cashew nuts purchased in Mozambique, and hence they exert a great deal of influence on market prices.
In Mozambique, cashew production is considered strategic for the economy, as it is a source of income for more than 1.4 million smallholder farmers, as well as generating other types of services, such as spraying.
In May, the Mozambican parliament, the Assembly of the Republic, passed the first reading of a government bill on the cashew industry, reversing policies imposed by the World Bank which, in the late 1990s, came close to destroying the industry.
At that time, the Bank, as one of its conditions for loans, insisted that the government end all forms of protection for the industry, and concentrate instead on exporting raw, unprocessed nuts (mainly to India).
Before the World Bank’s interference, Mozambique was processing around 50,000 tonnes of cashew nuts a year. After the Bank’s diktat, the figure fell to 8,000 tonnes. All the large processing factories closed, and thousands of cashew workers lost their jobs.
(AIM)
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