Mozambique’s cashew industry has received another setback after Singapore food distributor, Olam International, announced that it was pulling out of the market because China was cutting back on cashew imports.
This comes as pressure from depressed cashew demand also weighs on the agricultural sectors of Ghana and Vietnam.
The development is widely anticipated to heavily impact peasant farmers of the nut variety in a country where climate incidents and the coronavirus have contributed to dwindling production, almost fortuitously given the decrease in global demand for cashews.
Of the 17 plants processing cashew kernels across Mozambique, only 10 are still in operation, with the Condor Anacardium plant in Macia west of Xai-Xai being the most profitable.
Mozambique though is forging ahead with a $1.5-million loan to its cashew industry in a bid to buoy plants like Condor Anarcadium, threatened by liquidation if dwindling exports continue on their downward trend.
On a visit to the plant, which employs about 700 people, on Wednesday, the country’s minister for agriculture, Celsio Correia, however said that Mozambique’s cashew market was showing strong recovery following a difficult period last year.
To date already 130 000 tonnes have been exported for the 2020-21 year.
It is expected – some say hoped for – that Mozambique’s current export season will even top previous benchmark figures of 150 000 tonnes of cashews exported for the 2019-20 season.
Correia told reporters that Olam’s announcement was news to him but of no concern as it had happened before.
It’s not unusual for the distributor to invest in and divest from Mozambique’s food production market.
Of greater importance is maintaining relations with a company that imports about 30% of the cooking oil produced in Mozambique.