Global slump. Cashew exports for FY23 drop by a fifth on reduced demand, higher prices

India’s cashew exports have dropped by around 21 per cent in financial year-ended March 2023 on dip in overseas demand. Shipmentsdeclined to 59,581 tonnes during FY22-23 over previous year’s 75,450 tonnes.

Exporters attribute the decline in shipments to a global slump that hit cashew nut consumption across markets.

In rupee value terms, the decline in cashew kernel shipments was about 15 per cent at ₹2,868.72 crore compared to the previous year’s ₹3,377.40 crore. In dollar terms, the shipments were down by 21.41 per cent at $356 million over the previous year’s $453 million. However, the exports of cashew nutshell liquid have gone up to 17,249 tonnes from 4,944 tonnes.

J. Rajmohan Pillai, chairman of Beta Group which owns the brand NutKing, told businessline that exports could drop to an over two-decade low in the current financial year as traders continue to go slow on shipments due to falling prices in overseas markets.

“We have become less competitive in the overseas markets and we are focussing on the domestic market”, Pillai said.

On the rise in cashew nutshell liquid exports, there is a big demand from Japan as the commodity is mainly used for industrial purposes for the production of varnish, paints etc. and the production is minimal.

However, R.K. Bhoodes, former chairman of the Cashew Export Promotion Council, highlighted a host of factors for the weakening performance of Indian cashew in the global market which included a lack of export promotion activities by the Commerce Ministry in international fairs, unethical imports of finished kernels from Vietnam and African countries, and stoppage of several incentive schemes for exports by the government.

For instance, Bhoodes said CEPCI participated in the GulfFood show in Dubai in February with its own funds since West Asia is a single major destination for Indian cashew.

Import surge

According to him, the imports of finished kernels facilitated the availability of low-quality and low-priced cashew in the domestic market at a price less than the cost price in India. This has made it difficult for genuine processors or exporters to survive. India used to get premium prices in the international market due to its quality of produce.

Now, with increasing imports of finished kernels in SEZ/EOU and the same re-exported under the brand of Indian cashew at relatively low prices, the market for domestically produced cashew dropped owing to low quality and the availability at low prices.

The stoppage of financial assistance by the government has affected mechanisation of processing factories that resulted in high processing cost in India, making the products uncompetitive in the international market, he added.

Besides, the notification exempting SEZ/EOU from the purview of minimum import prices has led to a surge in imports of broken kernels at cheap prices. These imported kernels are moved to other units outside SEZ under the guise of job works and sold in the domestic market, he alleged.

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