Cashew Sector Foresees a Tough 2023 Higher prices for raw cashew, surging processing cost and declining export prices impact the sector

With falling exports, the cashew industry fears a challenging year ahead amid global slump and high raw material prices.

Industry sources pointed out that the disruptions in production and supply chain are still continuing and they attributed the reason to the impact of Russia-Ukraine conflict, inflation and recession.

J Rajmohan Pillai, chairman of Beta Group, the owners of NutKing brand, told that reduced spending on discretionary items like cashew nuts has hit the industry badly. China was a major cashew market and its zero Covid policy adopted last year disrupted shipments there. “Last year was challenging and the situation is expected to continue this year”, he said.

High prices

The sector is now facing a situation with higher prices for raw cashew, surging processing cost and declining export prices. The price for W320 grade cashew nuts is now in the range of $2,5-2,6 against $2,95-3,1 last year. The raw nut price is now in the range of $1,240 per tonne against $1,200 last year.

There has also been a delay in receiving shipments of raw cashew. Usually, at the beginning of the year, businesses signed contracts for at least until the third quarter. But this year, most importers in the US and EU do not plan to import cashew until the end of the second quarter, Pillai said.

Amid lower demand and export prices, he said the processors and allied businesses are in no rush to import raw cashew especially when its prices remain high.

Pratap Nair, Managing Director, Vijayalakshmi Cashew Company said Indian domestic consumption of cashew nut is right now encouraging whereas the international scenario is not so conducive, especially in Europe, due to the Ukraine conflict. The emerging situation has resulted in declining disposable income leading to waning priority for cashew nuts among consumers.

Coupled with this is the delayed crop in Africa and in India due to climatic changes. The delayed crop may lead to a short crop and it has to be seen whether the prices will be stable or not this year. Nair said cashew prices have bottomed out and there is no chance for going down further as all the negative factors have already factored into it.

RK Bhoodes, former chairman of Cashew Export Promotion Council of India, stressed the need for reinstating incentive schemes for exports to remain competitive in West Asian market, a major buyer for Indian cashew. Due to lack of funds, the sector is not participating in overseas fairs. The Council is participating by mobilising its own way, he added.

The Cashew nuts W240 prices were recorded at $8,78 per kg FOB.

Source: The Hindu Business line

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