Indian cashew exports succumb to financial crisis; fall to lowest in at least six years.

The deep financial crisis and rising debt have hit one of India’s principal exports — cashew. Cashew exports from India touched the lowest in at least six years, at $644 million in the last financial year 2018-19, according to the RBI. India exported cashews worth $922 million in the preceding year. “Increasing losses due to high processing cost of cashew industry has forced almost 80 per cent of the cashew processing units to shut down in Kollam, a cashew production hub in Kerala,” S Kannan, Executive Director & Secretary, The Cashew Export Promotion Council of India (CEPCI) told Financial Express Online. Easy access to finished or semi-finished imported cashew kernels have also made it tougher for the Indian cashew industry to match with the low production cost of its foreign counterparts, he added.

To address this concern, the government, earlier this year, announced to hike the minimum import price for whole and broken cashew. The steps brought little joy to the cashew processing sector as low-quality cashew kernel shipments from Africa and ASEAN countries had hit the domestic industry in the recent past. The recent downturn in the cashew industry has affected not only the production and exports but also jobs of lakhs of people due to its large size.

The Indian cashew Industry is mostly export-oriented. There are around 4,000 processing units functioning in India at present under organised and unorganised sector with a processing capacity of 16.43 lakh mt per year, says the Directorate of Cashewnut and Cocoa Development. The production and productivity of cashew are highest in the state of Maharashtra, where the average productivity is 1262 Kg/ha. Andhra Pradesh and Odisha are the other two prominent states in the production of cashew in India.

India is a major exporter of cashew kernels and earns a sizeable amount of foreign exchange, however, India grows almost half of its cashew requirements for production and thus it depends heavily on import of raw nut from Asian and African Countries to bridge the gap of the industry.