The Hindu Business Line : Raw cashew nut shortage fuels import dependence

In recent years, imports have gone up steadily, increasing the forex outgo. The rise in the raw nut prices in producing countries, on the one hand, and the drop in international market prices of the cashew kernels, on the other hand, narrowed the gap between forex earnings from exports and its outflow towards the cost of raw nut imports.

As against 3,55,556 tonnes, valued at Rs 950 crore in 2001-02, the raw nut imports in 2002-03 stood at 4,01,199 tonnes, valued at Rs 1,230.6 crore. During April to February 2003-04, it went up to 4,40,177 tonnes, worth Rs 1,363.56 crore, while the exports of cashew kernel during this period were 90,757 tonnes, valued at Rs 1,624.50 crore.

The raw nut requirement of the cashew processing industry was more than 10 lakh tonnes per annum and the availability from internal sources was around half of it, official sources at the Cashew Export Promotion Council of India (CEPC) told Business Line.

In spite of efforts, the industry could not find adequate raw cashew nuts to meet its requirements in full, forcing many units to remain closed either round the year or for a considerable part of the year.

To realise around Rs 2,000 crore of foreign exchange, the industry is spending over Rs 1,300 crore. The price of raw cashew nuts on a global level remains very high vis-à-vis the price of cashew kernels. India and Vietnam vie with each other to corner the available raw nut in the world, raising its price.

At the same time, the unit value of cashew kernels dropped to Rs 179 a kg during 2003-04 from Rs 188 the previous year.

In fact, Vietnam, which exported 63,000 tonnes of cashew kernel in 2002 and an estimated 80,000 tonnes in 2003, had become a major threat to Indian cashew exports, the officials said. Added to this is the almond lobby in the US. The tree-nut, which is the major crop in California, is promoted in a big way by the almond producers/buyers of California and the US Government doles out substantial subsidies and assistance for promoting the tree-nut.

"As more and more raw cashew nut-producing countries, such as Vietnam, are entering processing, there could be a shortage of it in the near future from foreign sources," industry sources said. Given this situation, there is an urgent need to increase indigenous production of raw nuts to make the country self-sufficient in raw cashew nuts, they added.

Vietnam processors, besides enjoying considerable governmental support, were able to procure uniform quality raw nuts indigenously at prices much lower than the Indian processor, the sources said.

During the Eighth Plan, provision for production development of cashew was Rs 45 crore, which was raised to Rs 70 crore in the Ninth Plan and Rs 127.41 crore in the 10th Plan, they said.

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