Domestic raw cashew nut shortage may drop by 10-15%

Domestic availability of raw cashew nuts is likely to be down by almost 10% to 15% this season. Earlier estimates had predicted a much more severe fall of 30% to 40 % in the current season. But the cashew industry spokesmen are of the view that the crop will be better than the earlier estimates.
Global shortage
The slight decline in domestic availability has happened at a time when there is a global shortage of raw cashew nuts. Supplies from Ivory Coast fell due to the political unrest in that country. Industry spokesmen pointed out that Brazil has also entered the import market as there is a shortage in crop this year.
Brazil is a major supplier of cashew to the US market. The cashew-processing countries will compete to import raw cashew nuts from African countries. This would add to the shortage situation, the industry spokesmen said.
Price situation
Raw cashew nut prices have seen a sharp increase of almost 80% in the last one year due to the shortage in supply and competition among the cashew-processing countries. The cashew kernel prices have moved up from Rs 423 per kg in the beginning of this season to Rs 460 per kg as of now. Despite the high prices, the demand from various food industry segments has been steady. However, the industry representatives are of the view that in the retail market the demand has seen a decline.
Processing capacity
The demand for cashew kernels has been growing at a steady rate of 18% till last year. However, the processing capacity of the industry has come down by almost 25% due to non-availability of workers. Shortage of raw nuts has resulted in higher prices for cashew kernels.
Demand fall
Finally, the demand growth itself has contributed to the price escalation. It is thus the opposing pulls of higher demand and lower processing capacity that made cashew dearer in the market. Interestingly, the industry expects that the higher prices this year would lead to a fall in demand. They fear that the user-industries would start consuming substitutes like almonds wherever it is possible.

Source: http://economictimes.indiatimes.com/markets/commodities/domestic-raw-cashew-nut-shortage-may-drop-by-10-15/articleshow/8641749.cms