Domestic industry far from absorbing cashew production in Mozambique

13 October 2009

Maputo, Mozambique, 13 Oct – The capacity to process cashew nuts in Mozambique is expected to total 60,000 tonnes within the next ten years, according to Mozambican newspaper Notícias.

The paper added that even so capacity would be below the capacity of 75,000 tonnes per year that Mozambique had before the collapse of the cashew industry at the end of the 1990s.

From an average of 90,000 tonnes of cashew nuts produced per year, Mozambique now processes between 25,000 and 30,000 tonnes per year, whilst the remainder is exported unprocessed to other countries.

A source from the national cashew institute (INCAJU) told the paper that in the last few years there had been increasing interest from investors, both national and foreign, in installing industries to process cashew nuts domestically.

Based on studies carried out recently, the source said that the country would not opt for the strategy of large factories that existed before the industry collapsed, saying that despite the advantage they had of economies of scale they also had disadvantages in terms of structure and fixed costs that are significant.

“Some of our competitirs, such as India for example, have teh advantage fo not having mega factories. Cashew nuts are processed on a family level and only go to the factories for finishing off and because of that it is able to get around those fixed costs,” said Santos Frijon, of INcaju’s economics department.

He also noted that this is the strategy that Mozambique had highlighted in order to focus on small and medium-sized units.

He also said that by opting for small units the country had managed to rise from a processing capacity of 3,000 tonnes in 2000, to around 30,000 tonnes currently.

From the point of view of employments, he said that small and medium sized units currently employed around 6,000 people, a number almost equal to those employed by the large units previously.

The cashew sector, which involves over 1 million families, some of which have cashew as their only source of income, is strategic for the Mozambican economy. (macauhub)