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  • Exports hit, but cashew industry gets support from domestic market 02/06/2023

    Feb 6th, 2023

    A booming local market is keeping the Indian cashew industry happy as exports take a hit in the wake of inflation and recession threats. The rising health awareness after COVID-19 has boosted cashew consumption in the country, helping the industry to make up for the dwindling exports. India has been the largest consumer of cashew for the last few years. Value addition and e-commerce platforms have further aided growth in the local consumption of the nut. After the pandemic, the annual domestic consumption of cashew rose by 1 lakh tonnes to 3 lakh tonnes. The industry now reckons that it is closing in on 4 lakh tonnes. One noticeable change in the consumption pattern after the pandemic is the increasing demand for split or broken cashews. ``The sweet and confectionery industry, and the hotel, restaurant and catering (HORECA) segments are driving the demand for broken cashew,’’ said Prakash Rao, managing partner of Kalbavi Cashews. Cashew exports plunge deeper to 38% in September at $22.71 million Cashew exports plunge deeper to 38% in September at $22.71 million Why dry fruits could be the perfect gift this Diwali | Dry fruit demand up 10% Why dry fruits could be the perfect gift this Diwali | Dry fruit demand up 10% Cashew nut consumption in India soars, making up for a decline in exports Cashew nut consumption in India soars, making up for a decline in exports Price of brokens overtake whole cashew. Earlier, whole cashew used to be costlier than brokens, with a difference of Rs 50 per kg. Now, at Rs 660 -680 per kg, the price of brokens is around Rs 20- 30 higher than that of whole cashew. “The Indian market has become price-sensitive and premium cashews are not selling well,’’ Rao said. According to him, India’s cashew processing capacity has increased to around 1.8 million tonne per annum (MTPA). “We have been able to scale up the processing capacity without affecting quality, unlike Vietnam, where the processing cost is cheaper but the quality is not as good as Indian nuts. Besides, our higher buying power may be a threat to the large raw cashew- producing countries like Ivory Coast and Benin, which are trying to establish themselves as manufacturing hubs.’’ With domestic prices higher by nearly Rs 100 per kg over export prices, the focus of the industry has shifted to the local market. “From an 80:20 ratio in favour of exports earlier, it has become 50:50 with around half of the processors now catering to the domestic market,’’ said Prakash Nair, vice president of Vijayalakshmi Cashews, a major brand in the country. Processing industry spreads wings From the labour-intensive cashew markets in south India, the processing industry has now spread to the north and western parts of the country. “Mechanisation has made cashew-processing easier, especially for the supply of brokens in the local market,’’ Nair said. Kerala, which used to be the hub of cashew processing, has now fallen behind, with many units remaining closed. A surge in processing capacity has raised the country’s dependence on the import of raw cashew nuts. Cashew production in India has not shown much increase in the last few years and touched 7.5 lakh tonnes in 2020-21. But raw cashew imports reached 9.39 lakh tonnes. In the current year, while cashew production is expected to remain around 8 lakh tonnes, raw cashew import is expected to be higher. “The import may reach 1.1 million tonnes,’’ Rao said. A fall in raw cashew nut prices globally, in recent months, may help the processing industry in India. Raw nut prices have dropped by $200-300 to around $1,300 per tonne, with the largest cashew exporter Vietnam not selling aggressively. “Vietnam’s exports to the US and China have been hit by recession and pandemic threats. So the country did not buy much raw nuts from Africa and has been managing with its local production and supply from Cambodia,’’ Nair pointed out. India’s cashew has recorded a sharp fall this year. India exported 75,423 tonnes of cashew kernels in FY21, according to the Agricultural and Processed Food Products Export Development Authority (Apeda). This year, from April to November, the exports stood at just 29,301 tonnes. The industry is expecting a 15-20 percent slide from the previous year.