Domestic cashew market is growing faster than exports

KOCHI: Increasing domestic cashew consumption is affecting India's exports of the nut that is a rich source of anti-aging agents. With local demand increasing 15% annually, consumption in India has overtaken that of the US and Europe, the principal buyers of Indian cashew. 

"The annual Indian consumption is hovering around 2 lakh tonne compared with about 1.3 lakh tonne in the US and 80,000 tonne in Europe," said Pankaj N Sampat, director of Mumbai-based Samsons Traders. India's exports have been around 1.2 lakh tonne a year. 

With cashew's popularity increasing, its processing, which was limited to the four southern states, is spreading to other places. "Cashew has seen several new origins like Gujarat, West Bengal and Maharashtra in the past few years," said K Prakash Rao, managing partner of Kalbavi Cashews. This has increased the number of processors, putting pressure on the availability for processing systems, said Rao. The booming local market has hindered the growth of exports, he added. Cashew is a major foreign exchange earner for India. 

Though official figures are yet to come out, value of cashew exports in 2014-15 was estimated to have surpassed Rs 5,000 crore, achieved in the previous year. Till the end of February 2015, cashew worth Rs 4,986 crore was exported. 

Vietnam, a major producer, exports almost the entire production as its domestic consumption is marginal. 

The problems confronted by the export market - like the high price of imported raw cashew nuts, rising cost of production and a lower price in the world market - have also worked in favour of domestic consumption.

- India Times

read more

Cashew kernel market shows some buoyancy on tight supplies

KOCHI, APRIL 8:  

The global cashew market has shown some buoyancy last month and the trend is expected to remain in April, after remaining subdued in January and February.

“Reasonable activity was witnessed in March and most of the business was for shipments up to May/June. However, some business was done for shipments in the second half of 2015,” trade sources said.

Last month cashew kernel prices were – depending on the processor and shipment period – in the range for W240 from $3.65-3.85; W320 $3.40-3.60; W450 $3.15-3.25; SW320 $3.25-3.35; splits $2.90-3.10 and pieces $2.85-3 all per lb (fob).

“In the last 2-3 weeks, prices for WW320 and SW320 have moved to the higher end of the range with hardly any offers near the lower end of the range,” Pankaj N Sampat, a Mumbai-based dealer, told BusinessLine.

Broken grades continue to be tight supplied as yield per tonne of Raw Cashew Nuts (RCN) has come down to normal levels and even below normal for more efficient shellers, and usage, especially in Asia, has gone up, he said.

In the first quarter of 2015, Indian shellers have been served a double blow, he said.

First, a huge wage increase in Kerala which has made processing very uncompetitive.

And this week, a reduction in duty credit from 5 per cent to 2 per cent of FOB value for all exports after April 1.

Higher productivity and cheap labour has steered Vietnam to the top rung as the producer of RCN and exporter of cashew Kernel, pushing India to the second slot, he pointed out.

According to Pankaj, Northern Hemisphere crops, which are projected as 75 per cent of the world production, are currently being harvested.

Crops are expected to be good in most areas. There is, however, concern about lower quantity in some areas and lower kernel yields in some others.

Also, there is concern that logistic issues in some countries might delay the movement of RCN to Vietnam and India.

RCN prices were trending lower in February on expectation of good crops but started moving up from mid-March due to slow arrivals.

Currently, India and Vietnam RCN are trading in the range of $1,450-1,500 a tonne. Prices from West Africa are in the range of $ 1,100-1,300 a tonne c&f, depending on origin, quality, shipment period, payment terms.

-The Hindu

read more

State govt urged to formulate cashew policy

MLC Ivan D’Souza has urged the State government to formulate cashew policy to promote scientific cultivation of cashew and increase the production in the State. 

Briefing reporters, on Saturday, he said without scientific cultivation, growers are not getting the expected yield. With reduction in supply of cashewnuts, manufacturers have to depend on foreign countries to import. A total of 96,216 tonne cashewnuts are produced in the State. The area under cashew cultivation in Dakshina Kannada is 32,756 and total production is 21,062 tonne. There is a need to promote high yielding variety of cashewnuts to increase the production in the district. 

Budgetary allocation

Stating that the Centre has reduced budgetary allocations to the State by 30 to 35 per cent for implementing the welfare programmes including mid-day meals, he asked as how much the Centre has given to the State for carrying out Swacch Bharath Abhiyan. The farmers have not been given anything by the Centre in its budget as it has considered agriculture as a state subject. The State should receive same budgetary allocation which it used to receive during the tenure of previous UPA government, he added. 

Stating that the National Democratic Alliance government at the Centre has failed to initiate appropriate action to bring back the black money stashed in foreign banks, he said Prime Minister Narendra Modi has failed to fulfill the election promises. While campaigning for the Lok Sabha elections in 2014, Modi had said that, if voted to power, the NDA government would bring back the black money within 100 days of forming the Government. It was unfortunate that even after completing 10 months, the NDA government at the Centre had failed to put in serious efforts to bring back the black money. 

By brining in an amendment to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the Centre has proved that it is following anti-farmer policy. The Youth Congress in Dakshina Kannada district will take out a padayatre to create awareness among the people on the amendment on April 18. 

By opening zero balance account under Prime Minister’s Jan Dhan Yojana, the government has not done anything for the poor. In fact, the Jan Dhan Yojana was not a new scheme as it was implemented by the previous UPA government under financial inclusion. 

- deccanherald.com

read more

For cashew exporters, foreign trade policy is a dampener

MANGALURU, APRIL 2:  

Cashew exporters view the new Foreign Trade Policy as a major blow to the industry. They feel the reduction of incentives available to cashew exports under Chapter 3 of the Foreign Trade Policy from 5 per cent to 2 per cent as the main reason for this.

Walter D’Souza, former president of the Cashew Export Promotion Council of India, told BusinessLine that scaling down of Chapter 3 benefits such as Vishesh Krishi Grameen Upaj Yojana (VKGUY) by 3 per cent under the new name of Merchandise Export from India Scheme (MEIS) will have far reaching repercussions on exports. 

Advantage Vietnam

Explaining this, K Prakash Rao of Kalbavi Cashews (an exporter from Mangaluru), said India has already lost the world’s largest cashew exporter tag to Vietnam.

Vietnam gained advantage from cheap labour and a jump in its raw cashew production.

Vietnam’s national average productivity of raw cashew nut is 2.1 tonnes a hectare against some 0.78 tonnes a hectare in India.

However, India had stayed put in global market because of the VKGUY benefit of 5 per cent.

“Markets are so competitive that every exporter in India factors this 5 per cent in his sale price and sells in the overseas market,” he said. D’Souza said that the scaling down of the VKGUY benefit had come into effect from April 1.

It is imperative that the earlier incentives are restored or at least continued until June 30, he said.

Export trades

Stating that most of the export trades take place three to six month in advance, B Rahul Kamath, President of Karnataka Cashew Manufacturers’ Association, said: “We would have made export commitments factoring 5 per cent benefits under Chapter 3. Overnight reduction in incentives cannot be factored, and exporters stand to lose heavily on the export commitments made by them.”

Prakash Rao said that by now most of the exporters have sold cashew kernels against this right up to October-November.

This sudden cut of 3 per cent will take the wind out of the exporters and may even result in many failing to keep their commitments. He said that 3 per cent drop in realisation will wipe out their working capital margin money and may result in upsetting the working of the industry this year.

Urging the Government to increase the benefits under MEIS for export of cashew kernels to 5 per cent, Kamath said this will go a long way in cherishing the ‘Make in India’ dream.

- The Hindu

read more

Karnataka cashew industry unhappy over foreign trade policy

MANGALURU, APRIL 2:  

The cashew industry has expressed displeasure over the Foreign Trade Policy 2015-20, which was announced by the Union Commerce Minister, Nirmala Sitharaman, in New Delhi on Wednesday.

B Rahul Kamath, President of Karnataka Cashew Manufacturers’ Association (KCMA), said the Government has reduced incentives available to cashew exports under Chapter 3 of FTP from 5 per cent to 2 per cent. This overnight decrease in incentive scheme will affect the entire cashew industry very severely.

Export trade commitments

Stating that most of the export trade takes place three to six months in advance, he said: “We would have made export commitments factoring 5 per cent benefits under Chapter 3. Overnight reduction in incentives cannot be factored, and exporters stand to lose heavily on the export commitments made by them.”

Stating that Vietnam has already cornered a major share in world cashew trade, he said China is also increasing its cashew processing base. The collapse of cashew industry will have a serious effect on the socio-economic condition of rural areas, he said.

Urging the Government to increase the benefits under MEIS (merchandise export from India scheme) for the export of cashew kernels to 5 per cent from 2 per cent, Kamath said this will go a long way in cherishing the ‘Make in India’ dream. “We will soon regain India’s past glory by being the world’s largest cashew exporter,” he said.

- The Hindu

read more

Kerala’s shortcut to cashew imports upsets trade unions

KOCHI, MARCH 30:  

The Kerala Government’s efforts in promoting raw cashew imports through Tuticorin with short sea shipping to Kollam Port, bypassing the major port of Kochi, have irked trade unions.

“The move will divert Kochi Port’s conventional cargo and cost the port dearer, affecting its revenue earnings substantially,” trade unions said while pointing out the under performance of Vallarpadam Terminal due to lack of cargo support from the hinterland.

Raw cashew shipments are a major commodity through Kochi bringing considerable revenue, with the port handling 12,000 TEUs per year, which is increasing consistently year on year. As per the figures available, Tuticorin Port imports 60 per cent of the 7.5 lakh tonnes of raw cashew imports and the remaining by Kochi.

The Cochin Port Joint Trade Union Forum has also taken strong exception to the Kerala Port Minister’s recent statement, saying that the Minister was well aware of the commercial importance of Kochi Port, which is striving hard to regain its past glory with the support of all stakeholders including the state government. According to unions, Kerala Ports department is close to inking a pact with neighbouring Tuticorin Port for the promotion of cashew imports utilising the Kollam Port facilities. The move, according to them, would eat away a major share of cashew imports of Kochi and reduce the existing job potential here.

Denying any such moves to torpedo the prospects of Kochi in cashew shipments, Kerala Port Minister K Babu told BusinessLine the initiatives taken by Kollam Port is part of their marketing strategy to remain competitive in the present day business environment.

Each port is free to take its own business strategies to attract cargo for their existence. This has been made possible after the government’s initiatives to promote coastal shipping movement in the state by improving the berthing facilities in minor ports at an investment of ₹120 crore and providing incentives for coastal cargo movement.

However, the Minister added that the government is ready to discuss the issues with the Kochi port management and trade unions to allay their fears. The state government is willing to roll out all possible help to Kochi Port to get its deserved share in raw cashew handling.

- The Hindu

read more