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Mozambique - Agricultural Production and Exports

Mozambique's Key Agricultural Production and Exports: A Vital Economic Driver

Agriculture is the backbone of Mozambique's economy, employing 70% of the workforce and contributing 20% to GDP, making it a cornerstone for livelihoods and economic growth. Despite challenges like climate vulnerability, limited mechanization, and governance issues, the sector supports food security and drives export revenues through crops like cashew nuts, cotton, sugar, tobacco, and sesame seeds. With a strategic 2,700-km Indian Ocean coastline and trade agreements like the African Continental Free Trade Area (AfCFTA), Mozambique's agricultural exports are gaining global traction. This blog provides insights into Mozambique's key agricultural production and exports, their economic significance, trade dynamics, and future potential, highlighting their role in regional and global markets.

Overview of Agricultural Production

Mozambique's agricultural sector is predominantly smallholder-based, with 97% of farmers operating on less than 10 hectares, cultivating 5.1 million hectares of arable land (12% of total land). The sector is divided into subsistence and commercial farming, with key production areas in the fertile provinces of Zambezia, Nampula, Tete, and Sofala. The tropical climate supports diverse crops, but 80% of production relies on rain-fed agriculture, making it vulnerable to floods and cyclones (e.g., Cyclone Idai, 2019).

Key Crops and Production

  • Cassava: The leading staple crop, with 6.5 million tonnes produced annually (2023), primarily for domestic consumption. Grown across Zambezia and Nampula, it ensures food security for 60% of rural households.

  • Maize: Produces 2.1 million tonnes, a staple for 70% of the population, with surplus in Manica and Tete sold locally. Limited exports due to domestic demand.

  • Cashew Nuts: A major cash crop, with 145,000 tonnes of raw nuts (2023), making Mozambique a top-10 global producer. Nampula accounts for 60% of production.

  • Cotton: Yields 100,000 tonnes of seed cotton, grown in Nampula and Cabo Delgado, supporting textile exports and rural incomes.

  • Sugar: Produces 400,000 tonnes, mainly in Sofala and Maputo provinces, with large-scale plantations like Tongaat Hulett driving exports.

  • Tobacco: Generates 70,000 tonnes, primarily in Tete and Niassa, a key export crop for smallholders.

  • Sesame Seeds: Produces 120,000 tonnes, with Nampula as the hub, driven by demand from Asia.

  • Pigeon Peas: Yields 150,000 tonnes, grown in Zambezia and Nampula, a niche export to India.

  • Tea: Produces 23,000 tonnes in Gurue, Zambezia, with commercial estates targeting regional markets.

  • Fisheries: Contributes 500,000 tonnes of seafood (prawns, crab, lobster), with Sofala and Nampula as key coastal hubs, supporting exports to Europe and Asia.

Production Challenges

  • Climate Vulnerability: Cyclones and floods damage 10% of crops annually, costing 1.1% of GDP. Only 5% of farmland is irrigated, limiting resilience.

  • Low Mechanization: 80% of farmers use hand tools, reducing yields (e.g., maize at 1.2 tonnes/hectare vs. global average of 5 tonnes).

  • Access to Inputs: Only 20% of farmers access fertilizers and improved seeds, constrained by high costs and weak distribution networks.

  • Land Tenure Issues: Informal land rights deter investment, with 70% of farmers lacking formal titles, complicating commercial expansion.

Agricultural Exports

Agricultural exports are a critical component of Mozambique's $8.27 billion total exports (2023), contributing 3.36% ($278 million), though dwarfed by minerals (57%). Key export markets include India (21.1%), South Africa (18.3%), UK (11.9%), and China (5.2%), with regional trade bolstered by SADC and AfCFTA.

Key Export Commodities

  • Cashew Nuts: $50 million (2023), exported raw to India and Vietnam, with Nampula as the hub. Mozambique ranks among the top African exporters, though processing is limited (only 10% processed locally).

  • Cotton: $40 million, mainly to India and Bangladesh, with Nampula and Cabo Delgado supplying lint and seed cotton.

  • Sugar: $60 million, exported to the EU (under EU-SADC EPA), South Africa, and the U.S. (via AGOA), with Sofala's plantations driving volumes.

  • Tobacco: $70 million, primarily to Zimbabwe and South Africa for regional processing, with Tete leading production.

  • Sesame Seeds: $30 million, exported to China and Japan, with Nampula benefiting from high Asian demand.

  • Pigeon Peas: $20 million, a key export to India under the Duty-Free Tariff Preference (DFTP) scheme, grown in Zambezia.

  • Fisheries (Prawns, Lobster): $50 million, exported to the EU (Spain, Portugal) and Asia (China), with Beira as a key port.

  • Tea: $10 million, shipped to South Africa and the UK, with Gurue estates targeting premium markets.

Export Trends

  • Growth: Agricultural exports rose by $162.9 million in 2022, driven by sesame, pigeon peas, and cashews, with a 24% annualized growth to India (2017–2022).

  • Regional Trade: 25% of exports stay within SADC, with South Africa importing sugar and tobacco, boosted by the SADC Free Trade Area.

  • AfCFTA Impact: The 2025 AfCFTA shipment to Kenya via Nacala Port signals SME export potential, with agricultural goods projected to grow 20% by 2030 ($1.6 billion).

  • Disruptions: The 2024 post-election unrest disrupted Maputo Port, delaying $50 million in agricultural exports, particularly cashews and sugar.

Export Challenges

  • Non-Tariff Barriers: Strict phytosanitary standards in China and the EU limit exports, with only 10% of potential met for sesame and prawns.

  • Processing Capacity: 90% of cashews and 80% of cotton are exported raw, losing value-added opportunities (e.g., processed cashews could add $100 million).

  • Logistics: Only 19% of 30,562-km roads are paved, increasing transport costs by 15%. Port delays at Nacala and Beira add 20% to export times.

  • Governance Issues: Corruption (e.g., 2023 pigeon pea export restrictions in Nampula) and the 2016 "hidden debt" scandal ($2 billion) deter buyers and investors.

Economic Significance

Agriculture is central to Mozambique's economy, supporting rural livelihoods and export revenues, with significant regional and global impacts.

Domestic Impact

  • Employment: Provides jobs for 70% of the workforce (15 million people), reducing rural poverty (70% of population).

  • Food Security: Staples like cassava and maize feed 80% of households, with surplus maize supporting urban markets.

  • Income Generation: Cash crops like tobacco and cotton generate $200 million annually for smallholders, boosting rural economies in Nampula and Tete.

Regional Role

  • Trade Hub: Exports to SADC neighbors (South Africa, Zimbabwe) strengthen regional value chains, with sugar and tobacco integrated into South African processing industries.

  • Corridor Efficiency: The Maputo, Beira, and Nacala corridors facilitate agricultural trade, with Beira handling 2.1 million tons of cargo (2019), including tobacco for Zimbabwe.

  • Integration: The 2023 Tripartite Agreement (Mozambique, Malawi, Zambia) enhances Nacala's role, enabling Malawi's tea exports and reducing regional trade costs by 10%.

Global Role

  • Market Access: Trade agreements (EU-SADC EPA, UK-SACU-Mozambique EPA, AGOA, China's zero-tariff policy 2024) grant duty-free access to key markets, boosting cashew and sugar exports.

  • Export Revenue: Agricultural exports contribute $278 million (3.36% of total exports), with potential to reach $500 million by 2030 under AfCFTA's tariff reductions.

  • FDI Attraction: The sector attracts $500 million in FDI annually, with initiatives like ProSAVANA (Japan-Brazil) and SUSTENTA targeting agro-processing.

Future Opportunities

Mozambique's agricultural sector holds significant growth potential, driven by trade agreements, investments, and regional integration.

  • Value Addition: Processing cashews (only 10% processed) and cotton could add $150 million in export value, following Vietnam's cashew model. The 2024 FOCAC Summit pledged $100 million for Mozambican agro-processing.

  • AfCFTA Expansion: Tariff-free access to 1.4 billion consumers could boost exports by 20% ($1.6 billion) by 2030, with sesame and pigeon peas targeting Nigeria and Kenya.

  • Climate-Resilient Agriculture: Investments like the $537 million MCC Compact II (2023) for Zambezia's irrigation and roads can increase yields by 30%, mitigating flood risks (1.1% of GDP).

  • Chinese Market Access: China's zero-tariff policy (2024) opens its $1 trillion food market, with sesame and cashew exports projected to grow 25% ($75 million).

  • SME Empowerment: Programs like SUSTENTA and AfCFTA's Guided Trade Initiative support women-led SMEs, with the 2025 Kenya shipment creating 5,000 jobs.

Conclusion

Mozambique's agricultural sector, employing 70% of the workforce and generating $278 million in exports, is a vital economic driver, producing cassava, cashew nuts, cotton, sugar, tobacco, and sesame seeds. Key exports to India, South Africa, and China leverage the Maputo, Beira, and Nacala corridors, with SADC and AfCFTA enhancing market access. Despite challenges—climate risks, low processing capacity, and 2024 unrest disrupting $50 million in exports—initiatives like ProSAVANA, SUSTENTA, and China's zero-tariff policy signal robust potential. By investing in value addition, irrigation, and logistics, Mozambique can boost agricultural exports to $500 million by 2030, solidifying its role as a regional trade hub and global supplier, while reducing rural poverty and fostering inclusive growth.