The Hindu Business Line : Raw cashewnut supply seen declining

If the current trends in some of the cashew producing countries in Asia and Africa are any indication, there is a likelihood of decline in availability in the coming years.

In some of the countries efforts are being taken to revive the processing units, while in some others the farmers are shifting to other crops for better returns. When processing facilities come up in one or two producing countries in Africa there is a possibility of raw nuts from some of the main producers of the material in that continent who are the major main source of supply for Indian processors, being diverted to the units in their neighbouring countries.

Vietnam is a clear example of such a scenario. The South-East Asian nation which was initially the supplier of raw nuts became one of the major processor-exporter of cashew kernels at present. It is also a main importer of raw nuts from other producing countries in Asia and Africa, industry sources told Business Line.

AFRICAN OUTPUT

Therefore, in the changing world scenario such an eventuality taking place in a couple of cashew producing countries in Africa cannot be ruled out, official sources said. Vietnamese production was estimated at three lakh tonne (lt) against India's 5.73 lt in 2006. The major producers in Africa are Nigeria (2.16 lt), Tanzania (1lt), Ivory Coast (90,000 tonne), Guinea Bissau (81,000 tonne), Mozambique (58,000 tonne), Benin (40,000 tonne) and Kenya (10,000 tonne).

INDIAN OUTPUT

The Indian processors are, at present, importing mainly from these countries. Indian cashew industry has a total processing capacity of 12 lt of raw nuts. As against this, the indigenous availability hovers around 6 lt.

In fact, the indigenous production is only enough to meet the Indian domestic demand for cashew kernels of late, official sources pointed out. Thus, the requirements of almost 50 per cent of the industry are met by imports on a perpetual basis. So as to get rid of this situation increasing the indigenous production of raw nuts is important, they claimed. Absence of an umbrella organisation is pointed out to be the reason for the cashew sector's progress at a snail's pace, they added.

But, according to Dr K.A. Retheesh, Managing Director of Kerala Cashew Development Corporation (KSCDC), which has 30 factories all located in Kerala and employing 25,000 workers, to run the factories through out the year imports are essential.

He said it was a seasonal crop and "when the Indian crop is over it would be the harvesting season in Africa and thus the supply is spread through the year". Storing the raw nuts would result in the kernels losing its quality, he said.

Given this scenario the supply channels need to remain open, he said adding, at the same time as "our domestic demand for cashew kernels is growing at a higher rate we need to enhance our indigenous output of raw nuts".

PRICE REALISATIONS

According to overseas reports, cashew growers in Cambodia are shifting to other more profitable cash crops such as rubber and cassava as the cultivation of cashew has proved to be non-remunerative for them. In the absence of domestic processing plants to purchase the raw nuts farmers are compelled to sell their produce to the nearest buyer, Vietnam, where from the farmers are getting "a bad price" because of exploitation by middlemen.

In Africa, Tanzanian Cashew Board (CBT) said to have initiated steps to bring in "indicative prices" for raw nuts produced in that country. According to the CBT, the prices of first and second-class cashews would be Sh 675 and Sh 540 a kg respectively in the major cashew growing region of Mtwara, where bonded warehouse receipt systems would be introduced for buying the crop. The cashew buyers have been urged to purchase raw cashew nuts from the Cooperative unions' stores. Such a step, probably aimed at ensuring the growers of better price apart from regulating the exports, might put the overseas buyers in to difficulties, trading sources apprehended.

In Mombasa also steps are being taken to improve cashew cultivation apart from reviving the processing units in the African nation. The local demand there is projected at 50,000 tonne and as against this the production in Mombasa is 14,000 tonne.

KENYAN EXPORTS BANnED

Meanwhile, the Kenyan government has reportedly banned export of raw nuts. The local cashew processing industry there has urged the Kenyan government to ban "the exportation of raw cashew nuts to revive the industry". According to reports, Kenyan processors could handle only around 22,000 tonne of raw nuts and more than this quantity is exported to India.