Guinea Bissau: State may lose some 30 pct of expected revenue with fall in cashew prices

10 February 2009

Bissau, Guinea Bissau, 10 Feb – The world financial crisis is affecting Guinea Bissau’s main export, the cashew nut, which will have a negative impact on the State Budget said the country’s director general for Trade and Competition Monday in Bissau.

Jaimantino Có told Portuguese news agency, Lusa that the global crisis had brought about a revision of the reference price for the purchase of Guinean cashews on the Indian market, which should mean a fall in predicted revenue of 20 to 30 percent.

According the to Guinea Bissau’s director general of Trade and Competition, before the international crisis, exporters (mainly Indian) were buying Guinean cashew nuts based on a resale contract of about US$700 per ton, but with the crisis they have had to lower this to US$500 per ton.

Based on calculation made before the economic crisis, the Guinean government was counting on around US$80 million, from the export of around 110,000 tons of cashew.

“But the current situation, we will also have to alter our predicted revenue,” said Jaimantino Có, emphasising that the situation could “significantly” affect the State Budget”

Based on “optimistic” calculations, he admitted that Guinea Bissau runs the risk of losing “anywhere between US$20 and US$30 million” as a result of the lowering of the cashew price on the Indian market, the main cashew buyer. (macauhub)