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The consumption of broken grades of cashew -- which was affected due shutdown of HoReCa (hotels, restaurants and catering) segment following the lockdown -- is yet to catch up, according to the cashew processors in the country.
K Prakash Rao, a partner at the Mangaluru-based Kalbavi Cashews, told BusinessLine that the biggest impact for the cashew sector post-lockdown was the drop in the demand for broken grades by 75 per cent as the HoReCa segment was completely down.
However, the processors hoped that sweetmeat manufacturing would come back to normalcy post-Raksha Bandhan. Unfortunately, it did not happen. The sweetmeat manufacturers are still struggling as consumption of sweets has declined sharply post-Covid. This has resulted in a 40 per cent drop in consumption of broken grades, he said.
Referring to the lockdown impact, Subraya Pai, former president of Karnataka Cashew Manufacturers’ Association (KCMA), said that broken cashew had started to pile up in the factories due to lack of demand from HoReCa segment, and there were only a few takers like biscuit manufacturers.
When the unlocking started in the country, big players began to sell the brokens at throwaway prices incurring huge losses, he said.
Bola Rahul Kamath, a proprietor of the Karkala-based Bola Surendra Kamath & Sons, said that demand is dull in segments such as gifting and sweets etc.
The reduction in the number of marriages or the scaling down of marriage celebrations have also affected the consumption pattern. Giving an instance, he said people used to provide dry fruits (where cashew is a major component) along with marriage invitations in the northern parts of the country. That is also reduced now, he said.
Prakash said that it took more than two months for the factories to re-open and get to work post-lockdown. But many could process only to 50 per cent of the capacity till July and August due to less workforce and due to the reduction in demand for broken grades.
“While India went through a lockdown for over 45 days, our competitors Vietnam did not have any such measures and they operated at full capacity. Their export performance has gone up significantly and they have further eaten out export markets. That will put additional pressure on the local markets now with increased availability,” he said.
The price of broken (splits) has come down from the pre-Covid level of ₹650 a kg to ₹575 a kg now, he said.
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