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African commodities house ETG is racing to halt the shipment of up to $60mn in pigeon peas and other foods from Mozambique, after accusing authorities of helping a local trader illegally seize its assets.
The Mauritius-headquartered group is trying to stop the export of goods seized by Mozambican food trading firm Royal Group, as a long-running dispute between the two companies escalates, people familiar with ETG’s plans said.
Mahesh Patel, ETG’s chair, wrote to Mozambique’s President Filipe Nyusi last month seeking his intervention over what he characterised as “widespread theft and expropriation of our property by the Royal Group Limitada, misusing state agencies”, in a letter seen by the Financial Times.
CMA-CGM, the Marseille-based shipping company set to transport the goods, did not respond to a request for comment. Royal Group did not provide a response for publication when approached for comment. Mozambique’s presidency did not respond to a request for comment.
Patel’s characterisation of the seizure could reignite concerns about corruption in Mozambique, one of the world’s poorest countries, which is still haunted by its $2bn “tuna bond” fraud scandal of the past decade.
ETG is one of Africa’s oldest and biggest agricultural traders. The group’s international shareholders include Japan’s Mitsui, the South African Public Investment Corporation, which is the continent’s largest fund manager, and Saudi Arabia’s Sabic chemicals company.
“In 40 years of operations across Africa we have never witnessed acts as malignant and damaging as this,” ETG said. The company added that it was calling for “an immediate cessation in hostilities” and for the release of its assets.
Most of Mozambique’s pigeon pea exports go to India, which is the world’s biggest consumer and producer of the protein-rich pulse used in dhal. However, low rainfall in India’s growing regions in recent years has hit local production of the key food staple.
The country will need to import 1.2bn tons in the harvest year ending in March this year, up from nearly 900mn tons in the previous year, according to government estimates. Mozambique provides around half of India’s pigeon pea imports, typically from small-scale farming.
Analysts say Mozambique’s agricultural exports have often been subject to political interference by members of Frelimo, Mozambique’s ruling party.
The dispute between ETG and its local rival dates back to 2022, when Royal Group accused competitors of incorrectly informing Indian authorities that the company had falsely certified a food shipment worth more than $60mn as free of genetically modified products.
All of the competitors settled the case except for ETG, which has since been fighting in the Mozambican courts against orders for its assets to be seized as part of a $60mn claim against the company.
After the civil court system ruled in ETG’s favour, Royal Group launched criminal proceedings in Mozambique last month that led to the arrest of an ETG employee, who was freed on bail, and which again permitted assets to be seized.
Drone footage and photographs reviewed by the FT appear to show goods being transferred out of ETG warehouses on to trucks and moved to other parts of the port of Nacala this month.
ETG’s lenders such as regional development banks were “deeply concerned” about the seizure in Mozambique because “much of the product stolen from our facilities was collateralised in their favour so they also have a direct interest,” Patel said in the letter to Nyusi.
Mozambican pigeon peas sold in Mumbai reached prices of 8,300 rupees ($100) per 100kg last week, up 4 per cent compared with a week earlier, amid rising demand from millers and limited supply.
Bimal Kothari, chair of the India Pulses and Grains Association, said that a pigeon pea trader in Mozambique was attempting to monopolise the export trade to India in order to drive up prices. He declined to name the trader.
“The Mozambique government knows the situation and despite this, they are indulging the wholly corrupt practice,” he said, adding that the association has asked the Indian government to suspend Mozambican pigeon pea imports in response.
Such a halt might drive up prices of the pulse in the country, Kothari added, but “even if there’s a scarcity, and Mozambique could have helped, we don’t want it at this cost. We won’t be held to ransom”.
Additional reporting by Sarah White in Paris
