The Hindu Business Line : Cashew exports may rise on Vietnam woes

Kochi, March 11 Sharp fall in production of raw cashew nuts coupled with high production cost in Vietnam, due to higher inflation rate, might result in increased demand coming to India.

The Indian exports so far have shown a marginal decline. However, the value of late has been better in dollar terms, Cashew Export Promotion Council of India (CEPC) sources told Business Line.

Processing capacity

Exports of cashew kernels during April-December 2007 stood at 86,312 tonnes valued at Rs 1,671.95 crore compared with 89,585 tonnes valued at Rs 1,866.64 crore in the corresponding period the previous year. The annual processing capacity of the Indian cashew industry is 12 lakh tonne of raw nuts and almost 50 per cent of it is still imported.

India has been a major buyer of raw cashew nuts from Vietnam till it has set up its own processing facilities few years back. At present, much of the Indian imports are from African countries.

According to the Vietnam Cashew Association (VCA), the country’s production of cashew nuts is about 3.5 lakh tonnes, much below the total capacity of processing plants of six tonnes. This has led the industry to import an additional 2 lakh tonnes of raw nuts for processing.

Inputs cost

There hasn’t been any corresponding increase in the selling prices so as to cover the rising inputs cost, he said. The increase in selling prices was at 25 per cent, whereas the rise in overall inputs cost was 40 per cent. According to the VCA official, the cost of materials had jumped by 40 per cent, labour by 30 to 40 per cent, packaging by 30 to 50 per cent and loan repayments by 25 to 30 per cent.

They said the weak US currency, which has dropped to below VND 16,000 against the dollar, had hit the cashew firms in Vietnam. Given this scenario, many producers and processors were said to be finding it difficult to fulfil their contract obligations with international buyers, the VCA acting chairman was quoted as saying.

According to reports, buyers from the European Union and the US are expected to arrive there to find out a solution for the delay in cashew shipments. The current cashew crop in Vietnam, according to VCA forecast, will be lower by 30 per cent — provided the present conditions prevailed.

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