Cashew exporters face supply crunch, want govt to help

The country’s cashew processing industry has a supply problem. The domestic capacity to process is 2.5 million tonnes a year. Home production of raw cashew is a third of this, at 700,000 to 800,000 tonnes.

A similar amount is imported, mainly from Africa. However, these countries are encouraging more of local processing, leaving much less for export in the raw form. “So, India’s domestic production will need to be augmented to two mt a year by 2025 for sustainability,” says the Cashew Export Promotion Council of India (CEPCI). It has suggested a three-phase plan to the central government. One is better pre-harvest management of the crop through proper manure and irrigation, to raise domestic production by 15 per cent. An area expansion of 25 per cent over and above the existing plantation of a million hectares over the next three years has also been proposed. Replantation of old trees with higher yielding varieties, to be replaced at 20 per cent a year, is another way of increasing production, says CEPCI. Based on the estimated yield, the plan is aimed at a target of 2.14 mt of raw cashew production by the year 2025, against the estimated demand of 2.19 mt that year. This would require cultivation in the traditionally growing states and non-traditional ones.

CEPCI data shows India accounts for about a fourth of world production of raw cashew. In 2016-17, this was estimated at 780,000 tonnes. Cultivation is undertaken in 17 states, covering 1.04 million hectares. India is the largest cashew processor in the world, processing about 1.6 mt of raw nut in a year. The processing industry's capacity utilisation is about 60 per cent, as the supply of raw cashew is only about 1.5 mt, both home output and import, according to CEPCI’s ‘Mission Plan’. Due to lower processing cost, India’s competitors can beat India in the international market by 15 per cent more on raw nut prices. To run the industry in India, exporters are forced to buy raw nuts at the same prices offered by competitors, CEPCI added.