Tanzania’s Cashew Nut Industry: A Billion-Dollar Opportunity Awaits Economic Transformation
In 2024, global raw cashew nut production reached an estimated 5 million tonnes, with Africa contributing 60 percent of the world’s supply. Tanzania stands at the forefront of this agricultural sector, projected to produce over half a million tonnes in 2025, yet facing significant economic challenges.
Currently, 87.5 percent of Tanzania’s raw cashews are exported to Asian markets, predominantly India and Vietnam, where they are processed and resold to Europe at nearly 4.5 times the original value. This export model could cost Tanzania $1.73 billion by 2030 and prevent around 800,000 farmers from escaping poverty.
The cashew’s journey in Tanzania traces back to 16th-century Portuguese traders who introduced the crop along East Africa’s coastline. Today, a single acre with 50 mature cashew trees can generate approximately $600 annually, with farmers waiting three to nine years for peak production.
The global cashew market presents a $12 billion opportunity, growing at 5.3 percent annually. While raw nuts sell for $1,200 per tonne, processed kernels can fetch up to $25,000 per tonne. Tanzania could generate an additional $200 million by developing local processing capabilities.
Four critical challenges impede Tanzania’s cashew value chain:
1. Capital Requirements: Establishing a 4,000-tonne processing plant demands $1.5 million, with additional working capital needed for raw nut purchases.
2. Competitive Disadvantages: Higher energy costs and lower labor productivity compared to Asian competitors challenge local processing efforts.
3. Market Control: Global kernel trade is dominated by international conglomerates controlling 65 percent of the market.
4. Policy Inconsistency: Unpredictable export bans and fluctuating tax incentives create investment uncertainty.
Learning from Vietnam’s successful model, Tanzania can transform its cashew sector through strategic interventions:
– Implement supportive government policies
– Invest in affordable processing technologies
– Establish farmer-processor cooperative networks
– Develop a phased value addition strategy
The message is clear: Tanzania must choose economic sovereignty or continue exporting raw potential. The future of its cashew industry depends on embracing value-added processing and breaking free from neo-colonial economic structures.
The cashew industry’s fundamental rule remains: process or perish.
