The Hindu Business Line : Global cashew shortage pushes up Indian exports

Kochi, Aug 3 Short supply of cashew kernels in the world market has pushed up prices in recent months besides stepping up Indian exports during the first quarter of the current fiscal.

Total shipments during April-June 2008 stood at 30,578 tonnes valued at Rs 779.67 crore as against 28,876 tonnes worth Rs 560.57 crore during the same quarter of the previous year, registering an increase of Rs 219.1 crore. In dollar terms the rise was $51.2 million, Mr Sasi Verma, Secretary, Cashew Export Promotion Council of India said.

He said that the average unit price went up to Rs 254.98 a kg from Rs 188.63 a kg in the corresponding period last year. Meanwhile, industry sources in Kollam told Business Line that the current unit value of W-320 grade was Rs 330 a kg and it went up as high as Rs 400 a kg about a month ago.

They attributed the price rise to shortage of raw nuts in the producing countries and the consequent increase in raw nut price.

The very high price could discourage cashew importers in major overseas markets, they said.

Domestic demand

Demand from the domestic market continued to grow and the price here for W-320 is 10 per cent higher than that of the world market.

The preference here is for broken nuts and its price is 20 per cent higher than the international prices at $2.30-2.40 a pound. Therefore, most processors in the organised sector are also concentrating on the domestic market for higher return.

According to them, there has been a crop loss in most of the producing countries, including India’s competitor Vietnam, and the situation is likely to continue in 2009 also, depending on the Indian crop expected from February next. However, import of raw nuts by the industry has shown a substantial increase to 1,80,372 tonnes valued at Rs 693.41crore at a unit value of Rs 38.44 a kg as against 1,58,777 tonnes valued at Rs 25.99 a kg. May-June is the arrival time of the raw nuts bought abroad, industry sources said.

Vietnam crop loss

Meanwhile, a latest Vietnam report quoting Vietnam Cashew Association said that unfavourable climatic conditions led to a crop loss up to 50,000 tonnes in Binh Phuoc provice alone. According to the report, finding “foreign supply sources” had also become difficult following the sharp fall in indigenous production.

Cashew processors there used to import 1.5 lakh tonnes of raw cashew nuts from Cambodia and Africa during the first six months of the year and almost 50 per cent of it came from the Ivory Coast.

On the other hand, the price of imported raw nuts from producing countries in West Africa shot up to $900-1,300 a tonne in late-May and early-June, as against $820 a tonne early-May 2008, the report said.

Besides, banking problems were said to be a hurdle for importing raw nuts. Thus, rise in raw material cost coupled with increase in wages and interest rates had pushed up the processing cost, making the end product non-competitive in the world market, it claimed.

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