Agri Business

DGFT suspends licence to export cashew kernels against import of shelled ones

AJ Vinayak Mangaluru | Updated on January 02, 2020 Published on January 02, 2020

Move will help small and medium cashew processors, feels industry

The Directorate General of Foreign Trade (DGFT) has issued a notice dated January 1, suspending the ad hoc norms approved in July 2018 for the export of cashew kernels (whole and pieces) against the import of shelled cashew kernels.

Terming it as a ‘new year gift’ by the government to the domestic cashew industry, Subraya Pai, President of the Karnataka Cashew Manufacturers’ Association (KCMA), told BusinessLine that the DGFT’s notice suspending the ad hoc input-output norm to import ‘Broma’ kernels (shelled and unpeeled) will help small and medium cashew processors to a great extent. (Broma is a process used in cashew processing).

Boost for SMEs

He said some of the multinational cashew processors were misusing the ad hoc norm, and dumping the broken cashews (pieces) in the domestic market. Following this dumping, the prices of brokens came down by almost ₹200 a kg in the last few months.

This affected small and medium cashew processors in the country, he said. Many of the industrial buyers stopped buying broken cashew from small and medium cashew processors as industrial buyers were getting it cheaper from multinational cashew processors.

There are around 3,000 cashew processing units in the country, employing around 10 lakh people in this sector, he said. A majority of them are small and medium enterprises providing jobs in rural areas, especially to women, in large numbers.

West African industry

Prakash Kalbavi, a cashew processor from Mangaluru, told BusinessLine that domestic market was exploited by some multinational processors using the loopholes, and they were dumping cheap quality kernels in India.

If the government had allowed the export of cashew kernels (whole and pieces) against the import of shelled cashew kernels, the cashew industry in India would have shifted to West Africa and thousands of women employees would have lost their jobs, he said, adding that it was more profitable to have one process of the manufacture done in Africa and the rest of it in India.

Gradually, cashew industry would have stabilised in Africa. India would lose out if this practice was allowed, he said. This step was essential to protect the future of the industry in India.

Subraya Pai thanked the government and said former Chairman of Cashew Export Promotion Council of India RK Boodesh and KCMA played a major role in bringing this issue to the notice of the government.

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Published on January 02, 2020
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