How India ruined an African country
Cashew nut farmers and traders in Guinea-Bissau have been left holding tonnes of produce after India slashed imports, and the low prices being offered are increasing hardship in the west African country.
“All of us — the farmers’ association, cashew nut producers and other operators — are trying to find a solution to this cashew nut export crisis,” said Mama Samba Embalo, the head of the Guinea-Bissau Farmers Association. “If we sell the cashew nuts at low prices, traders will not have the money to repay their bank loans.”
India, the top importer, has increased its domestic production. By July this year, exports reached 60,000 tonnes of cashew nuts.
This compared with more than 100,000 tonnes by the same time in 2011, he said. The proposed benchmark price of 250 CFA (30p) per kilogramme was not respected, and prices fell as low as 100 CFA. Around 120,000 tonnes of cashew nuts are still stockpiled and awaiting buyers, said trade director Diamantino Co.
The April coup that resulted in the overthrow of both interim prime minister and presidential candidate Carols Gomes Jr, and interim president Raimundo Pereira, disrupted cashew trade, increasing insecurity and making buyers reluctant to travel in the country.
The expected fall of world cashew prices due to the European debt crisis will also slow Guinea-Bissau’s economic performance in 2012, with inflation growing as a result of rising prices for imported goods, the African Development Bank (AfDB) said this year.
Guinea-Bissau is the world’s fourth largest exporter of cashew nuts, which bring in more than $60m a year. The sector employs more than 80% of the country’s 1.6 million people, and plantations cover nearly half the country. It is one of the poorest nations in the world and is ranked 176 out of 187 countries in last year’s Human Development Index.
The staple food is rice. Guinea-Bissau produces 40,000 tonnes a year, but it has to import a further 80,000 tonnes to meet domestic demand and is frequently hit by food insecurity.