Cashew operators incur Rs 3-crore loss in April

Cashew processing operators in Palasa and Kasibugga, the largest cashew markets in the state, have incurred a loss of more than Rs 3 crore in April alone due to fall in prices. The 2006-07 cashew season began on April 1.

"Each cashew processing operator purchased 200-1,000 bags of nuts at Rs 3,200 a bag (each bag contains 80 kg), depending on their investment capacity. But the prices crashed to Rs 2,600 a bag and consequently, they lost more than Rs 3 crore in just one month," Malla Nooka Raju, president, Palasa Cashew Manufacturers Association, told Business Standard.

The fall in prices has proved to be advantageous for some big players who are purchasing nuts at the prevailing Rs 2,600 a bag, while the majority of operators, having burnt their fingers, are left with no finance to invest more. Due to this reason, small and medium operators have fallen on bad days. Besides, cashew kernel prices have dropped by Rs 75-70 a kg as compared to March.

"During March, we sold old stocks at Rs 300 a kg (jumbo size) and Rs 280 a kg (quality kernels). Now, we are selling the same at Rs 225 and Rs 210 a kg respectively," Raju said.

Last month, large stocks of new kernels reached the markets as Palasa and Kasibugga operators roasted more than 45,000 bags of cashew nuts. In addition to the glut, kernel yield also declined by 2 kg for each bag.

"Normally, each bag yields 24 kg of kernel after processing, but this season the yield slipped to 22 kg. This is another reason for the fall in revenues," he said.

Purchasing cashew at more than Rs 2,600-2,800 would be unprofitable for the processing units considering the fall in the rates of kernels. According to him, Most of the operators, who procured cashew at Rs 3,200 a bag, stand to lose heavily as compared to those who purchased a bag for Rs 2,600.

Even Kerala traders were importing nuts from other countries as they are cheaper than those in the Palasa and Kasibugga markets, Raju said, adding that this would lead to further fall in prices of both kernel and nuts.