The Directorate-General of Foreign Trade has fixed a floor price for import of ‘broken’ and ‘whole’ cashew kernels. This is likely to provide the cashew industry relief from increasing shipments into the country over the last few years.
In a recent notification, the Directorate-General of Foreign Trade fixed the minimum price for import of ‘broken’ cashew kernels at Rs 288, and ‘whole’ cashew kernels at Rs 400 a kg.
Walter D’Souza, Chairman of Federation of Indian Export Organisations (southern region) and an exporter, told
Processing units in the country convert raw cashewnut into cashew kernels. These kernels are graded as ‘brokens’ and ‘wholes’.
While the ‘wholes’ are exported and consumed in domestic market, the ‘brokens’ are used in various domestic food items. (See Box)
Vietnamese threat K. Prakash Rao, owner of Kalbavi Cashews in Mangalore, said that a lot of cashew kernels, particularly ‘brokens’, from Vietnam were coming into the Indian market though under-invoicing of imports. This inferior quality material was killing the market for ‘brokens’ in the country, he said.
D’Souza said that there were also reports of imports being made through mis-declaration of either the price or the produce which is declared as animal or cattle feed.
brokens For Indian traders, imported cashew kernels – ‘brokens’ in particular – are attractive in terms of the return on investment, he said.
K. Pramod Kamath, Member of the Executive Committee of Karnataka Cashew Manufacturers’ Association, said that the association had pioneered efforts against unethical undervalued imports of cashew kernels more than three years ago.
Cashew processing units have seen prices of ‘brokens’ drop over the last three years. On an average, the price has decreased by over 20 per cent, he said.
Stating that the import of cashew kernels was unheard of seven years ago, G. Giridhar Prabhu, Proprietor of Achal Industries (cashew processor and exporter), said the import had a huge impact on the competitiveness in the market.
IMPACT This hit realisation, and in turn also the domestic price of raw cashewnut and ‘broken’ cashew kernels, he said. On the benefits of DGFT notification, Kamath hoped that there would be revival of demand for cashew kernels in India.
Cashew processors will be able to pay good price to domestic growers as realisation will improve, he said. Prabhu said that the export of cashew kernels have gone up by over 10,000 tonnes in the first half of the fiscal, and, therefore, earnings on the export front will be positive compared with the previous years.
If imports also drop, then the net contribution of the cashew sector is bound to increase, he said. D’Souza said that the industry was left high and dry with the free imports. The present levy would boost the industry, he said.
‘Broken’ but booming
Anything broken will have a below par value but not broken cashew nuts which find their way into biscuits, sweets such as kaju kathli and ice-creams.
Giving an overview of the market development for ‘broken’ cashew kernels in the country, G. Giridhar Prabhu says that the Indian market for broken kernels has developed over the last 10 years on the back of a growing economy.
The consumption of ‘broken’ cashew kernels is high in segments such as conventional sweets, confectionery, chocolates, ice cream industry, and, to a large extent, in restaurants and catering services.
Walter D’Souza said that the Indian cashew industry has steadily grown at an average rate of 10-12 per cent in the last five years. The higher rate of production was also due to semi-automation in the cashew processing in the absence of adequate workforce in the market.
The automation results in 10 per cent higher production of ‘broken’ cashew kernels, he said.
The global market for broken cashew kernel is not developed as in India, Prabhu said.
Prakash Rao said that India is the most viable converter of raw cashewnut in the world, as the country can realise the best price for its products. India has customised its products to suit each segment of the market, he said.