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KOCHI: The local market has turned saviour for the domestic cashew industry, after Vietnam dented India's hopes in the global cashew market, through competitive pricing and aggressive marketing.
Indian cashew has been out priced in the international market in the first five months of the current year.
Predictably, Indian cashew export has shrunk 12% to 46,240 tonne in the April-August period. The export turnover at Rs 2,031 crore saw a comparatively lower decline at 4% as the unit price had gone up.
"We saw a record export last year with the US buying more Indian cashew. This time around, so far, the cashew kernel imports to the US from Vietnam have been 20% higher. The cashew crop in Vietnam was better and it has been selling aggressively in the global market,'' said Hari Krishnan R Nair, managing director of Western India Cashew Company.
Vietnam's gain has been the Indian cashew market's loss. Vietnam has been able to offer competitive prices because of a comaparitively lower production cost. Indian cashew exports touched an all-time high of Rs 4,976 crore in 2013-14. But the increased demand from the local market has to an extent compensated for the setback in the global market. As the festival season approaches, sales have picked up. It is the cashew brokens that have been a big draw.
"The price for a box of cashew (22.68 kg) is in the range of Rs 9,500, up Rs 1,500 over the same time last year. We expect good sales till Diwali. The current price matches the rate at which we imported the raw cashew,'' said P Somarajan, proprietor of Kailas Cashew Exports.
India meets 50 to 60% of the cashew required for processing through import of raw cashew from Africa and Asia. Raw cash ew imports till the end of August have gone up by 19% to 579,215 tonne.
The cashew season in West Africa is almost over and all eyes are on Indonesia, where the season has begun.
"In the last 15 days, the export prospects have been looking up for India with a shortage looming in the world market. Even Vietnam does not seem to have enough raw cashew supply. India may be at an advantage here as it is well stocked for the next two to three months,'' said K Prakash Rao, managing partner of Kalbavi Cashews. He felt that India may catch up in exports in the coming months.
Since Indonesia is the sole supplier, raw cashew prices have zoomed to $1,500 per tonne from around $1,000 in West Africa. India, too, may have to buy cashews at a higher price later.
Hari Krishnan R Nair said that the Chinese president visiting India gives a golden opportunity for the country to press for removal of 10% duty on Indian cashew kernels in China. Cashew from Vietnam to China doesn't attract duty.

- India Times