Cashew firms meet amid testing times

The domestic cashewnut industry, which is passing through a difficult phase, is trying to bring all the stakeholders on a common platform to face emerging challenges.

The main problems of the industry are shortage of raw nuts and competition from countries such as Vietnam.

To help stake holders handle these challenges successfully, the industry's leading trade body, the Karnataka Cashew Manufacturers Association (KCMA) has taken an initiative to hold a three-day convention-India Cashew Convention 2005-from 30 September to 2 October at Panaji, Goa.

The event, third of its kind, is being organised by Foretell Business Solutions Pvt Ltd, a Bangalore-based company engaged in the research and publication of commodities news. Goa Cashew Manufacturers Association is hosting the event. The event will be inaugurated by the chief minister of Goa.

The organisers expect the presence of processors, exporters, traders and brokers from major cashew growing and processing centres such as Kollam, Mangalore, Goa, Tamil Nadu, Andhra Pradesh and Orissa in the convention.

The convention will mainly focus on marketing kernels and raw cashew nut supply and quality. A real-time trade session among processors, brokers and buyers is also planned this time.

According to G Srivatsava, president, Foretell Business Solutions, the industry is facing major challenges like securing export markets, increasing domestic production of raw nuts, marketing and logistics.

At present,the country is facing raw cashew nut shortage.The country grows 3.50-5.50 lakh metric tonne raw cashew and imports around 5 lakh tonne. Cashew kernel production is around 2.3 lakh tonne, of which 1.2 lakh tonne are exported."There is a need to increase the production of raw nuts domestically.

Otherwise, India may lose its number one status in the international market," says Srivatsava.

While, Karnataka, Maharashtra, Andhra Pradesh are making efforts to increase the cultivation, Kerala is losing its numero uno status in production due to shift in plantations from cashew to rubber. Uttaranchal, Orissa, Jharkhand are adding new fields under cultivation.

Speaking to Business Standard Srivatsava says the industry is also facing severe competition from countries like Vietnam, which has emerged as the second largest exporter of cashew kernels in the last decade, beginning from scratch.

Till now India has been the leader in the world cashew kernel marekt. "To retain its position, India has to increase production as well as exports," he said.

The members of various trade associations are likely to come out with a unanimous understanding and impress upon the Union government to formulate a cashew policy to guide cultivation and the industry, he said.

Srivatsava said the industry is also trying to market the cashew kernel as a health food in the domestic market. "Cashewnut is a zero cholesterol nut and has tremendous health benefits," says Srivatsava.

Among other issues, the industry is facing is problem of logistics and VAT. While some states have implemented VAT,others have not. Lack of uniform tax polilcy is affecting the trade.

The members are also likely to arrive at a consensus on forming an all India federation of cashew industry.