African Countries’ Agricultural Trade Value Chain Assessment Case study: Tanzania (Cashew nut exports)

Vladimír KreplPetr KmentGabriela RajdlovaPatrick Kapila

DOI 10.7160/aol.2016.080105
No 1/2016, March
pp. 45-55

Krepl, V, Kment, P., Rajdlová, G. and Kapila, P. F. (2016) “African Countries’ Agricultural Trade Value Chain Assessment Case study: Tanzania (Cashew nut exports)", AGRIS on-line Papers in Economics and Informatics, Vol. 8, No. 1, pp. 45 - 55. ISSN 1804-1930. DOI 10.7160/aol.2016.080105.

Abstract

Sub-Saharan Africa lost its status as a net exporter of agricultural products in the early 1980s when prices for raw commodities fell and local production stagnated. Since then, agricultural imports have grown faster than agricultural exports. In order to get to the bottom of this critical issue, UNIDO in partnership with the AU, IFAD, AfDB, FAO, and UNECA, developed the African Agribusiness and Agro-Industries Development Initiative (3ADI). The major objective of the 3ADI is to increase private sector investment flows going into the agriculture sector in Africa by mobilizing resources for agribusiness and agro-industrial development from the domestic, regional or international financial systems. This formed the basis of research with the objective of assessing the value addition chain for some vital agricultural commodities in the 3ADI focus countries. UNIDO is developing several action plans in a few African countries – one of them is Tanzania. In the case of Tanzania, the findings show the potential in cashew nuts. The paper’s main goal is to propose a plan or set of steps leading to the improvement of added value generation in the area of agricultural trade in Tanzania. The paper is focused on one commodity Cashew-nuts. Tanzania boosts high volumes of local supply of this commodity, which is the key prerequisite for the value addition chain through local processing. The results from the analysis prove significant economic losses related to the current structure of Tanzanian trade in cashew nuts. The main problem of the current cashew nut trade activities is the very low added value of exported cashew nuts. The paper analyses the structure of value added activities related to the cashew nut trade and proposes a plan for increasing the share of processed cashew nuts at a much higher unit price in comparison to raw cashew nuts. The simulated development in the cashew sector in Tanzania to the year 2030 is based on two expectations a 5% increase of evaluation of particular steps and a 5% growth of processed cashew nuts export volume resulting in significant growth of export incomes and provides an important material stimulating discussion related to the importance of the transformation of the export structure from unprocessed raw products to processed – finalized products.

Keywords

Agribusiness, agricultural commodities, Africa, Tanzania, UNIDO 3ADI, local processing, value addition chain, cashew nuts, export, structure.

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