Russia-Ukraine war hits hard Tanzania’s chili value chain
Exporters of the crop are shying away from the business
THURSDAY November 17, 2022
By Adam Ihucha
Tranquility News Correspondent, Tanzania
The war pitting Russia and Ukraine is raising its ugly head in Tanzania’s horticultural industry as the fight’s ripple effects have ruined the European market’s logistics and supply chain.
African Bird’s Eye Chili’s (ABEC) farmers in Tanzania are the latest victims of the EU markets crunch, thanks to the Russia and Ukraine war for disrupting logistics and supply chain.
ABEC grower from Arusha Emmanuel Laizer revealed that helpless farmers across the country are counting losses, as exporters have defaulted on their purchase commitments, leading thousands of metric tonnes of chili to lose the hot taste in their hands.
Official data shows Tanzania exported 72,950 metric tonnes of chili between 2016 and 2019, earning the economy a staggering $4.083 million, bolstering the spice’s position as one of emerging cash crops.
“We’ve recorded a booming ABEC yields, only to find ourselves in a quagmire, as the buyers we had signed the purchasing contracts with are not forthcoming to fulfill their obligation,” Laizer said.
It is likely that the buyers have defaulted on their purchase commitments or there might be a serious slow-down on the export-front, owing to the Russia-Ukraine war pushing cost of logistics high to the entire supply chain.
As a result, majority of crop exporters see the business as a risk venture at the moment, as the exorbitant logistics cost not only eats their profit margin, but also makes the crops uncompetitive at the global market.
The key exporter of ABEC Vitesse Company confessed in a statement that it had failed to honour its obligation due to the EU market crunch resulting from the Russia-Ukraine war.
“Since April 2022, the chili markets have been erratic, owing to the outbreak of war between Russia and Ukraine. We have seriously been affected because of over-reliance on the EU market,” reads part of the firm’s statement.
Vitesse, one of several off-takers who have been exporting ABEC to the EU market, has had purchasing pacts with hundreds of farmers across the country.
“The company would like to apologise for the losses incurred by farmers, particularly those who have purchasing contracts with us,” the firm’s statement reads in part.
In a move to save the farmers, as the EU market appears to be more volatile, the key driver of the horticulture industry, TAHA Group, is currently working extra time to explore alternative markets.
“This is a matter of grave concern, and we are currently making all means necessary to secure alternative markets to salvage the helpless farmers who have nowhere to sell their chili harvests,” said TAHA CEO Jacqueline Mkindi.
Dr Mkindi said in a statement that TAHA Group had developed a ‘contingency plan’ to respond to the chili crop marketing crisis that was threatening to bring the industry to its knees.
“We are working with Tanzania’s foreign missions in the East African Community (EAC), Southern Africa Development Community (SADC), Middle East and Asia and there are prospects of securing reliable markets for chili as part of the contingency plan to rescue farmers from the crisis,” the TAHA Group Chief said.
As if that was not enough, she said the TAHA Group marketing team was also spending sleepless nights, crossing fingers to explore other markets as an immediate measure for salvaging the helpless farmers currently left in dilemma.
MORE INFO: Bird’s eye chili
The African Bird’s Eye Chilli is popular among farmers because of its hardiness and low input costs. It can be grown in marginal areas. As a perennial plant, the African Bird’s Eye Chilli is productive for 2 to 3 years. This means you do not need to uproot the plants after each harvest. You can harvest for several years, before planting a new crop.
TAHA Group is also conducting an in-depth look at the crop to establish the exact volume of the ABEC lying without a market, facilitating the willing off-takers to purchase the consignments from growers and guiding farmers to grow alternative crops with readily available markets.
The horticultural industry champion in collaboration with the Ministry of Agriculture will also hold the chili stakeholders’ meeting early next week in Dodoma to chart out the way forwardΩ
