Importing poor quality cashew seeds has caused a decline in our exports.
Vishwak started a cashew export business in January 2016. He runs Sree Krishna Prasad cashews in Udupi, Karnataka, which imports raw cashew seeds from Zimbabwe. The declining quality of the seeds has led to a decrease in the amount of cashew he used to export over the past few years.
Vishwak is not a unique case. According to the data from the Karnataka government, cashew exports fell from 188.42 million USD in 2017–18 to 90.29 million USD in 2020–21.
“There are several reasons why our cashew exports have been decreasing. Mainly, it depends upon the quality of the cashews and how and where we store them. It also depends on what quality the cashew is, like w400, w380, w360, w270, etc.; it is even based on the size too. Cashew is exported to countries like the Netherlands and the U.S,” said Vishwak.
He added that COVID was one of the reasons for the decline in cashew exports. Following the lock down, they implemented contactless deliveries as per the government guidelines. “We also preserve and sell the cashew’s pink layer, which is employed in the production of medicines,” he said.
Giridhar Prabhu, Vice Chairman of Cashew Export Promotion Council of India, Kollam and Hon Secretary and President of Karnataka Cashew Manufacturers Association, Mangalore, said, “Cashew exports were 1,40,000 tons seven years ago. India is behind countries like Vietnam and Cote d’Ivoire (West Africa) in terms of cashew exports. Rapid advances in mechanization, as well as the development of their technology and pasture development techniques, help them do better; foreign direct investment (FDI) is a major factor here. This is one of the reasons why countries like Vietnam and West Africa export more than India.”
He added, “India’s cost of doing business has gone up in the last five years in all sectors. As East and West Africa have developed their organizations, and the export has gone up from zero to well over 60,000 tons. India is now down to the third place. Indian consumption has also gone up in the last 12 years. If consumption goes up, the export is less.”
According to a report,India imports raw cashew for processing and selling in India, and it also exports a significant amount of shelled cashew to various nations. Due to strong domestic consumption, India’s shelled cashew exports fell in 2016. India accounts for more than half of global cashew imports, while exports account for less than ten per cent.
Karnataka is the fifth-largest exporter of cashews in the country. Coastal Karnataka accounts for 70 per cent of the state’s cashew crop. Dakshina Kannada is the state’s most populous district in terms of land area under agriculture and cashew cultivation. Mangalore has pioneered large-scale, labour-intensive cashew processing plants.
The cashew industry in Karnataka has grown, due to the development of the exporting community, particularly on the west coast, where rural units are producing 100,000 metric tons of cashew kernels. The Indian Council for Agriculture Research (ICAR) has approved around 20 new varieties of cashews developed by scientists. Moreover, the amenities provided by the New Mangalore Port Trust (NMPT) and regular container services make Karnataka competitive in import and export activity.
Manjunath, a cashew farmer from Andhra Pradesh, said that they get the money according to their cashew quality. “We mostly don’t get much profit or loss as we give our yield to the exporters through a middleman. So, if there is any profit on the crop, we don’t benefit much from it,” he said.
Giridhar said, “Cashew is a seasonal crop. If you want to grow more, you have to plan in advance for the next 30 years. Farmers are not keen on this as they think other alternatives are better. Landowners and farmers should be motivated, even if the government program is limited. We used to export to 60 countries in the world. Now we export to 40-45 countries in nominal quantities.”
The cashew nut is mostly shipped to the United States of America (USA) and Vietnam for a total of around 10.6 million USD. Norway, the United Arab Emirates (UAE), and Malaysia are additional customers.
As per a recent study.overall, the country has 3940 cashew processing facilities, totaling 1643 thousand metric tons (MT) with an average installed capacity of 0.4 thousand MT. With 55.8 per cent, Maharashtra has the most of them. Kerala, on the other hand, has the most installed capacity (36.5 per cent), followed by Karnataka (18.3 per cent).
Giridhar further said that India is still putting out the best cashews in the world. “There is an international demand for Indian cashew. To increase exports, production should be increased further. We want India to generate 2 million tonnes, but it only produces 4 lakh tonnes. Exports are not a concern. There is no issue for the industry,” he said.
Shifali Rai from Panchamiy Exports Karnataka, Puttur, Dakshina Kannada, said, “We currently stopped doing cashew exports but we import raw cashew nuts from African countries and also procure locally. During 2018-19 many cashew industries incurred huge losses due to a hefty increase in the raw material price but no proportionate increase in the price of the finished goods.””
She further added that they have also been impacted by COVID. “There is no authority to control the price of both the raw materials and finished goods. Sometimes we are forced to sell the goods at a lower price. Another challenge is getting the proper workforce in the nearby vicinity,” she said.
Traders and intermediaries control the raw cashew nut and kernel markets. Obtaining raw cashew is the most expensive part of the cashew processing industry’s operational expenditures. Even little increases in cashew pricing have a detrimental influence on the overall economics of cashew processing.
Krishna Raj, an economist from Institute for Social and Economic Change (ISEC), said, “The cashew-growing countries like Vietnam and Brazil are giving stiff competition to India and the importing countries are keeping strict quality restrictions to ensure they get good quality cashew. Cashew farming is labour intensive, and as the government has increased the minimum wage in recent years, it has become a financial burden on farmers who were already losing money.”
He added that the cashew tree is both environmentally friendly and nutritionally beneficial. However, how cashew nuts are processed determines their quality, and poorer grade cashew kernels are not popular for export. Most of the employees working in the cashew processing industry are women and any problems in the export or processing of cashews will indirectly affect women.