SO Tanzania is already an official supplier of soybeans to China.
This has come after the two countries signed a bilateral agreement last year that opened the door to both sides to cement their ties through agricultural trade. While the deal expressed China’s commitment to buy Tanzanian produce, it gives an onus for Tanzania to up its game. It is interesting that China is by far the world’s leading importer of the crop.
In 2019 alone it managed to ship in a total of 88.6 million metric tonnes, nearly 85 per cent of it came from two countries; Brazil and United States of America. The beauty that comes with these agreements is that they shield prospective suppliers with market uncertainty.
That is to say, Tanzanian farmers will be able to produce and export to the Asian nation even if some more competitors will emerge, no quantitative restrictions or related measures will be imposed on them at any time. The commendable move has come at a critical time when Tanzania is still finding its way from the shortage of animal feed and inadequate edible oil.
Whereas the latter seems to have many alternative options as sunflower and palm oils production is booming in various parts of the country, the growing livestock sector is literally hell-bent on protein-rich soya. This means that local demand is high and is poised to continue to expand even further. Well, so many questions may rise, why is China courting a “nonplayer” to the extent of inking this important deal?
Apparently, China is doing that for two reasons; First, to try finding a replacement for United States of America a long time supplier who, in the past four years, has signalled a quick shift from a trusted trade partner to potential enemy and given the fact that these soybeans are essential in feeding swine industry in China the country doesn’t want to play with people’s lovely food.
Secondly, this may be an opportunity for China to brighten its image in Africa, from the one that is characterised by exporting everything from manufactured products to food and largely importing minerals making a balance of trade gap too big. Naturally, there is no sane country will be happy with trading with a partner who has a very huge balance of trade like the one between China and African countries.
This expansion will help give China a fairer view than not. Am trying to mention those reasons so we can be able to predict the sustainability of the deal. This brings me to the gist of today subject, how do we seize the China market? Production is the first thing that we must address, especially in terms of quantity and consistency.
Tanzanian production of soybean is still on its infant stage as only less than 15,000 tonnes is produced per year. Thus, to say that Tanzania’s entrance will bring much difference to Chinese market at the moment will be to deny the fact that we are still pygmies in the soybean global trade.
But that doesn’t mean we will be in that state forever especially if we will take heed to a necessary nugget that I will try to put down here below. Let’s start by addressing the seed problem. The level of improved seeds application is very low in this country and this is beyond soybeans, it cuts across the entire agricultural sector.
This makes productivity a target too high to be hit. There is looming need to improve private sector engagement in this issue. Exporting companies that are in this business – through their sector associations – can do a very big job if they don’t stay idle and keep on playing the off-takers role alone.
They can multiply the released seeds, engage in a proper agreement with farmers in the ecological zones capable of supporting soybeans growth, and supply them at a relatively lower price. It may not need to reach to the contractual farming level – as some people have negative view of this – but at least their presence will help improve the situation.
On the same note, public institutions mandated to improve seed welfare, like Tanzania Agricultural Research Institute (TARI) and its various centres, Tanzania Official Seed Certification Institute (TOSCI), Agriculture Seed Agency (ASA) and so many others should unclench their fists welcoming these important players in a more credible way.
Ruvuma and Njombe regions are famed with production of these crops, unfortunately it appears as if those are the only areas that can support soybeans germination. Sort of awareness creation has to be created by the above mentioned institutions, first to the regions and districts with potential to produce them and secondly to cooperatives that are keen enough to embrace new opportunities.
A well-crafted concerted efforts not only will help ensuring enough supply, it will help taming malpractice committed by some of the players as we have seen in some other value chains, and ensuring that our quality is one that is of high standard.
In this way, our newly gained market will be one to get the much needed foreign currency and a catalyst to suffice our domestic market. Next time, we will come speak about the trading structure but for now let’s iron out the root of the problem – availability of the needed crops.