The Hindu Business Line : Cashew exports drop on weak global demand

SLIPPING EXPORTS: A woman buying cashew kernels from a roadside vendor in Thrissur, Kerala. Domesitc consumption of cashew is on the rise and, as a result, prices in the local markets are tending to increase. This has, in turn, been one of the problems affecting exports. — K.K.Mustafah

Kochi , July 13

Drop in demand in the world market resultant from competition from other tree nuts and cashew of other origins has pushed down the export of cashew kernels during the first quarter of the current fiscal.

The weak market conditions also led to sharp fall in unit value in the international market.

Exports during April - June 2006 fell to 29,273 tonnes from 32,326 tonnes in the same period in the previous fiscal.

Value showed a decline of Rs 127.01 crore to Rs 608.13 crore from Rs 735.14 crore.

Unit value dropped to Rs 207.75 a kg from Rs 227.41 a kg.

Exports decline

Industry sources in Kollam told Business Line that the fall in exports could be attributed to increased availability of raw nuts in cashew producing countries some of which were also processing and exporting. On the other hand, when some other tree nuts are promoted in the major overseas markets such as the US, the demand for cashew kernels faced a decline in consumption.

Therefore, a growth in demand has not been visible so far this year, they said.

In fact, exports in 2005-06 showed a decline when compared to the previous fiscal. The shipments in last financial year stood at 1,14,143 tonne valued at Rs 2,514.86 crore as against 1,26,667 tonne valued at Rs 2,709.24 crore in 2004-05.

Exports to the major market, the US also fell to 43,149 tonne valued at Rs 958.33 crore in 2005-06 from 61,546 tonne worth Rs 1,288.49 crore in 2004-05. Imports by the UK and Japan also showed a fall during this period.

Domestic market

There has been a consistent growth in the domestic demand, which is estimated at around 55,000 tonne a year. As most of the domestic supply is from the un-organised sector no statistics are available.

Major processor exporters are also marketing in the internal market in bulk and the prices are three per cent more than that of the export, the sources said. Average price of bulk at present is Rs 212 a Kg, they said. However, the sales have dropped recently due to some problems relating to the CST, they said.

Raw nut availability

The raw material availability in the country continued to be far below the demand of the processing industry, the sources . Almost 60 to 70 per cent of the raw nut production here is absorbed by the unorganised sector and hence "we have to depend on imports", they claimed. The indigenous production of raw nuts is estimated at five lakh tonne as against the requirement of the processing industry of over 10 lakh tonne, they said.

However, increase in output in other producing countries in Africa has reduced the prices of raw nuts. The landed cost of imported raw nuts fell to Rs 31.02 a Kg from Rs 39.08 a Kg in April-June 2005.

Imports of raw nuts during April-June 2006 also dropped to 1,20,864 tonne valued at Rs 374.97 crore from 1,55,641 tonne worth Rs 608.20 crore in the same period last fiscal.

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