T&T Group to import more raw cashew nuts from Tanzania

A view of the auction held by the Tanzanian Government (Photo: VietnamPlus) 

Hanoi (VNA) - T&T Group, a Vietnamese industrial, real estate and finance conglomerate, defeated enterprises from India, China, Singapore, Kenya, and the United Arab Emirates (UAE) to win a bidding to purchase more than 13,600 tonnes out of over 20,000 tonnes of raw cashew nuts from Tanzania at an auction session held by the Tanzanian government on October 31.

This is the largest-ever successful bidding made by a Vietnamese company in buying raw cashew nuts from Tanzania, showing T&T Group's increasing position in the global competition after it won a big deal to purchase 176,000 tonnes of raw cashew nuts directly from the African country in late July this year.

According to the Cashew Nut Board of Tanzania (CBT), of the more than 20,000 tonnes, 13,181 tonnes were produced by the Tandahimba Newala Cooperative Union (Tanecu) and 7,278 tonnes by the Masasi and Mtwara Cooperative Union (Mamcu).

Notably, 28 buyers have ordered a total of 40,000 tonnes of raw cashew nuts of Tanecu, exceeding the amount of 13,181 tonnes being offered.

This showed a fierce competition in auctions to buy raw cashew nuts in the 2019-2020 crop.

Despite the great competition, T&T Group still signed a contract to buy more than 13,600 tonnes of the product, accounting for 68 percent of the total offered output.

This year, Tanzanian President Magufuli directed the country’s Ministry of Agriculture and the CBT to reform auction procedures in an "open" method rather than "closed" manner, with the aim of preventing corruption and taking advantage of loopholes of relevant laws for self-interest.

Accordingly, bidders were requested to show their ability to bid and relevant information must be registered through the CBT’s portal first.

Bid cards must clearly state name of the bidding companies, purchase prices, and quantity to buy. More importantly, boxes of bid cards will be placed in auction areas rather than at regional commission offices and districts as before.

This is part of efforts of the Tanzanian government to improve the transparency and carefully scan the ability of buyers.

The bidders were required to pay in full the value of the shipment they buy within 4 days. Cooperative unions of Tanzania will be obliged to return the money to local farmers 10 days after the successful bidding.

Talking to international press about the success of this auction, a representative of T&T Group said it won the bid thanks to understanding the market and mechanism of operation, its effective coordination of resources and long-term investment strategy in Tanzania.

The batches of raw cashew nuts with good quality and high capital recovery, and meeting export standards, are expected to be shipped to Vietnam in January 2020, to timely serve the needs of production and processing in Vietnam.

On July 30, 2019 in Tanzania, T&T Group and the Tanzanian government officially signed a contract to purchase 176,000 tonnes of Tanzanian raw cashew nuts in the 2018 crop.

As a country that imports raw cashew nuts and is the largest exporter of cashew nuts in the world, Vietnam plays a coordinating role as a bridge to build a global value chain for the cashew industry among countries that provide raw cashew nuts such as the Ivory Coast, Nigeria, Mozambique and Benin.

Vietnam produces and imports about 1.6 million tonnes of raw cashew nuts per year, of which domestic supply only meets nearly 25 percent of the total, causing severe raw material shortages for Vietnamese cashew businesses, according to recent market data. The majority of raw cashew nuts still depends on imports from African countries.

The contract with Tanzania not only brings a plentiful source of raw cashew nuts for the domestic cashew industry but also reinforces the position of Vietnam as a raw cashew importer and the largest cashew nut exporter in the world, accounting for 60 percent of global production, according to the Vietnam Cashew Association.

Previously, on March 20, T&T Group officially signed the first contract on the purchase of 50,000 tonnes of raw cashew nuts with a group of cashew exporters from the Ivory Coast and the Ivory Coast's Cotton and Cashew Council./.