The Cashew industry in Kollam district of Kerala has been facing severe crisis from past few months which has led to closure of several units.
The key issue that the MSME sector is facing is that it is mainly promoted by people having domain expertise in processing alone with limited capital and there is lack of access to raw material market and the market for finished products.
Talking to KNN, the Commercial Manager of Kerala State Cashew Development Corporation Ltd, V Saji said that there are various factors responsible for present crisis in the Cashew industry such as disparity in the prices of raw nuts and exported kernels, import duty on raw cashew and decline in export incentives.
He said in order to bring the industry out of the crisis, export incentives should be enhanced along with increase in indigenous production of cashews.
Quoting the other factors that have adversely affected the industry, the Cashew Export Promotion Council has found the 35 per cent hike in minimum wages that came into effect in March 2015 responsible for the crisis.
The import duty of raw cashew at 5 per cent and import of sub-standard processed cashew from Vietnam has also affected the domestic market in the country, it stated.
Further, the state has also not yet received the GST refund after the advent of new taxation system which made the situation worse for the industrial units.
Limited capital and inadequate supply of loans has also contributed to the lesser production quantity.
Source: knnindia.co.in