The Hindu : Kerala News : Cashew export scene far from crispy

Online edition of India's National Newspaper
Wednesday, Nov 19, 2008
ePaper | Mobile/PDA Version

Kerala

Kerala

Cashew export scene far from crispy

Ignatius Pereira

Tough competition from Vietnam, slump in demand

U.S. buyers report a 20 per cent fall in demand
Exports stand at 95,000 tonnes as on October

KOLLAM: Cashew exports are in choppy waters facing tough competition from Vietnam and the global economic crisis.

In international market, the price of cashew kernels has dropped from $3.60 a pound (approximately Rs.360 a kg at the current exchange rate) at June-end to $2.20 (Rs.242) at present.

Industry sources attribute the fall to reduced cashew consumption in the U.S., coupled with an oversupply of kernels. Exporters say that U.S. buyers report a 20 per cent fall in demand. In Europe, the demand has gone down by 13 per cent.

Vietnam claims to have shattered India’s dominance in cashew exports. The Vietnam Cashew Association (Vinacas) says that in 2007, that country exported 1.53 lakh tonnes of kernels. Figures provided by the Cashew Export Promotion Council of India show that India exported only 1.14 lakh tonnes that year. India’s record is 1.25 lakh tonnes in 2004.

Vinacas statistics show that till October this year, Vietnam had exported 1.48 lakh tonnes. India’s exports stand at 95,000 tonnes.

But industry sources here dispute the Vietnam figures, alleging them to be slightly inflated, though the challenge from that country is undisputed. That challenge has resulted in oversupply.

Exporters say the global annual demand is in the vicinity of 2.5 lakh tonnes. But till October this year, 2.43 lakh tonnes have reached the international market when Vietnam and India’s exports are put together.

When the remaining two months’ exports reach the international market, the supply will reach more than 3 lakh tonnes.

Oversupply

With the economic crisis gripping the kernel market countries, the demand has fallen and that means, the oversupply will be in the vicinity of 75,000 tonnes this year, industry sources say.

But the problems for the Indian cashew industry started much before the economic crisis. The U.S. had rejected huge consignments because kernels were found contaminated with dichlorophenol. The rejected 60 container loads should have earned foreign exchange of Rs.30 crore.

Use of chemicals

Exporters here say unscrupulous processors based in two other States had used bleaching powder to give a shining finish to the kernels. On contact with the kernels, the powder turned into dichlorophenol.

This was mixed with cashew processed in Kollam and exported. However, the picking up of the domestic market has come as a silver lining.

Industry sources here say the cashew industry in Vietnam is under great financial stress. Vinacas has sought urgent support from the government in the form of tax concessions.

Printer friendly page
Send this article to Friends by E-Mail

Kerala

News Update

Stories in this Section