India’s cashew kernel exports to the US have steadily been declining for the past four years. The emergence of Vietnam as the leading exporter, shortage of raw nuts in the country and rising domestic consumption are the main reasons.
The US share in India’s cashew kernel exports has declined from a high of 42,694 tonnes in 2007-08 to 30,100 tonnes in 2010-11, a drop of 29.4 per cent. In 2009-10, the US imported 117,000 tonnes, of which India’s share was 30,000 tonnes. In 2010-11, US imported 126,000 tonnes, while India’s share accounted for 30,100 tonnes.
“Export of cashew kernels to the US has stagnated over the past two years after witnessing decline in the previous two years (from 2007-08 to 2008-09). During this time, Vietnam replaced India as the major supplier to the US, mainly due to the low prices it offered. However, Indian exporters have made rapid strides in exporting to other countries like Japan and the West Asian countries in the past few years,” Pankaj Sampath of Samsons Trading Co, a Mumbai-based trading company said.
In value terms, Indian cashew exporters have also witnessed a decline in their realisation due to appreciation of the rupee against the dollar during this period. As compared to a realisation of Rs 838 crore in 2007-08 and Rs 975 crore in 2008-09, exporters earned Rs 806 crore in 2009-10.
The declining trend in exports to the US is likely to continue for 2011-12 . According to export data for the first four months of the finnacial year, the US imported around 7,000 tonnes of kernels valued at about Rs 275 crore.
“At one time, the US was the largest consumer of cashew kernels. However, over the last couple of years, India has overtaken the US in terms of consumption of kernels. Traditionally, every exporter who wants to make his presence in the international market will look at the US as a potential market and so did Vietnam when it started exporting in 2003. It offered kernels at lower prices compared to India and gradually captured the US market, overtaking India,” Giridhar Prabhu, managing director, Achal Cashew, an exporter from Mangalore, said.
Of an estimated 250,000 tonnes of kernels annually produced by India, around 110,000 tonnes are exported, while the remaining are consumed internally.
Explaining the reason for decline in India’s exports to the US, he said India has diversified its export basket over recent years by exporting to about 65 countries. West Asia and Japan have emerged as the important markets for Indian exporters, apart from the US. Whereas Vietnam exports only to the US, he said.
Apart from the US, Australia is another importer that has reduced its dependence on India for cashew kernels. Its imports from India have declined from 90 per cent to 10 per cent of its total requirement over the last few years.
“There is an urgent need to increase the availability of raw nuts for Indian exporters to utilise their installed capacity of around 1.8 million tonnes annually. Presently, the country produces around 500,000 tonnes of raw cashew nuts, while it imports about 700,000 tonnes,” Sampath said.
However, for the current financial year, the import of raw nuts are likely to decline by around 100,000 tonnes, as Vietnam and Brazil have increased their buying this year. Vientam is likely to import around 325,000 tonnes, while Brazil may import about 40,000 tonnes. This scenario will further affect India’s processing industry, he added.
