India, the second largest exporter of cashew kernels in the world, witnessed stagnation in the exports of the commodity during the first quarter of this financial year. The country exported 25,862 tonnes, a marginal growth of 1.6 per cent over the corresponding quarter last financial year. This was largely due to the booming domestic consumption and shortage in the availability of raw nuts this year.
Exporters had to draw down to meet the domestic demand than export commitments. The local consumption is pegged at around 190,000 tonnes annually, while the exports are around 110,000 tonnes, industry sources said.
According to Kochi-based Cashew Export Promotion Council of India (CEPCI), the unit value realisation from exports was up by four per cent to Rs 276 a kg in the export market during the quarter. This was 26 per cent lower when compared to the domestic prices, which were ruling at Rs 375 a kg.
“The exporters are finding it remunerative to sell their produce in the domestic market for two reasons. Firstly, they are getting higher price realisation and faster turnaround. Secondly, the shortage of raw nuts has made exporters to limit their processing,” said Pankaj Sampath, a Mumbai-based exporter.
Historically, the cashewnut is consumed in India for making sweets. But in the last five years, it has been used as main ingredient in confectionary industry, ice creams and also consumed as snack nut, he said.
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Currently, India produces around 500,000 tonnes of raw cashew nuts, while it imports 700,000 tonnes for processing into kernels before exporting. After processing, the industry is left with around 300,000 tonnes of kernels, of which 110,000 tonnes are exported. The CEPCI expects around five per cent growth in the exports during the current financial year.
“Recession fears from buyers’ side and lack of parity for Indian exporters were not conducive for driving export during the whole of last year. Another reason could be attributed to aggressiveness on the part of Vietnam in the international market,” G Giridhar Prabhu, a Mangalore-based exporter said. Vietnam accounted for 170,000 tonnes during 2009.
Sampath said in order to increase exports from the country, the industry needs to raise the domestic raw nut production. Presently, there is no scientific and systematic way of growing cashew nuts. It is largely grown as a wild crop in many states. In the next five to seven years, the country needs to grow at least one million tonnes annually to meet the demand for both exports and domestic consumption, he said.
During the first quarter, the processors imported 231,804 tonnes, a drop of five per cent. In value terms, it was 15.5 per cent higher at Rs 208 crore compared to the year ago period. The processors had to shell out 14 per cent higher amount at Rs 41 a kg for import of raw nuts.
For the current year, the domestic crop is short by 10 per cent to 450,000 tonnes. This means the processing industry may have to import more raw nuts this year, added Sampath.