Cashew Sector Still on Life Support

KOLLAM: The $800-million cashew export industry, which registered a negative growth of 6 per cent in the April-June quarter, is unlikely to recover in the coming quarters despite the optimism by the exporters. The data provided by the Cashew Export Promotion Council of India (CEPCI) shows that the total exports dipped to `1,122 crore in the April-June quarter this fiscal when compared to `1,199 crore reported in the corresponding quarter last year.

The unit value realisation from kernels was down by 12 per cent to $185 (`437) a kg in the export market during the quarter.

The total quantity of the exports also declined 15 per cent to 26,999 metric tones in the same period. The industry exports raw cashew kernels, roasted and salted kernels, cashew nut shell liquid or cadanol etc to different parts of the world with US, UAE and Netherlands remain the top buyers of Indian cashew.

The sector has been affected by the double whammy of global recession which resulted in the lesser demand for the exported kernels and spike in prices for imported raw cashew nuts in the international markets.

India imports close to 7.7 lakh metric tonnes of raw cashew a year with a major share coming from the African markets.

According to experts, the industry is unlikely to recover in the coming quarters. “The cashew industry is going through a cycle and is yet to bottom out. The variables which have been a hindrance to the growth of the industry are very much there,” said executive director of Cashew Export Promotion Council of India, Sasi Verma. The spurt in raw cashew resulted in the closure of many exporting units in the country during the April-May period.

Even the top exporter like Vijayalaxmi Cashew Co had to shut some of its 19 major export units in the state for 45 days in the period. An exporter and vice-chairman of Cashew Export Promotion Council, P Sundaran said that international prices of raw cashew is still going northwards of $1,300 per tonne.

The Kerala State Cashew Development Corporation which operates 30 factories in the state has tendered for the importing 1,000 metric tonnes of raw cashew from Guinea-Bissau at a rate of $1,425 a tonne while the price of 4,500 metric tonnes of cashew came from Ivory Coast on July 27 was priced at $969 per tonnes.

Notwithstanding the problems facing the industry, the exporters are positive about the industry in the medium term.

“There were some trade-related issues that affected the movement of cargo from the African countries and once that is sorted out, the raw cashews bought hedged at lower price will start to come in.

“The port deal with Tuticorin is also a positive,” said Sundaran.

Kollam-Tuticorin port deal

On July 21, the ports of Kollam and Tuticorin finalised a deal to transport cashew cargoes meant for importing and exporting through sea. It is considered to be a major breakthrough for the industry as Tuticorin port receives the maximum number of imported raw cashew in the country and the Kollam being the export hub of cashews with over 400 factories in the district. With this deal, 43,000 truck loads of cashews will take the sea route in the form of 460 ship movements between the ports a year, thereby saving the time and handling charges. One container of cargo if it goes by sea will save `5,000 for the merchant. Thus in the cargo handling alone, the cashew merchants are set to save more than `21 crore a year. The deal is expected to become operational by the end of the second quarter of the current fiscal.

- newindianexpress.com