'King of nuts' languishing due to fall in demand

By M.Raghuram

MANGALORE, AUG. 24. This coastal city, which is a major producer of cashew kernels, has an in-built market mechanism to feel the pulse of the global cashew market -- a fact, which has been accepted not only by the growers and importers but also by agricultural scientists who specialise in cashew plantating.

Recent reports on the cashew global markets show that the year 2000 was bad for cashew trade, and 2001 will probably be the same or only marginally better if consumption levels continue to decline. The indications are grave as the major importer of cashew, the United States of America, recorded $ 1.67 per pound of cashew kernals, lowest in 16 years.

Like any other agricultural and horticultural produce that has taken a nosedive in the post-liberalisation period, cashew has had its pitfalls. Especially in 2000, the global cashew market behaved strangely indicating an artificial decrease in consumption and export. The global market trends, which rule the Indian cashew market, resulted in the cashew prices declining to the levels of 1983-84. This has been revealed in the report compiled by Mr. Giridhar Prabhu in a special academic paper. Mr. Prabhu is a former vice-chairman of the Cashew Export Promotion Council and a member of the Steering Committee in the Directorate of Cashew and Cocoa Development.

The paper traces the reason for the alarming fall in prices to the decrease in consmption in India, Europe, and a few other countries, while U.S. has maintained its conventional level of consumption all through 2000. However, the analysis shows that there has been a 11 per cent decline in sale of cashew kernals to the U.S. from India. Indian exports to U.S. in 1999 were to the tune of 2,143,700 cartons each containing 22.68 kg. of cashew kernals. Last year exports came down to 1,905,200 cartons against the secone largest exporter Brazil's 1,078,500 cartons in 2000 (720,600 in 1999). Brazil earned 50 per cent more in exports and India lost by 11 per cent.

Threat to Indian cashew export has come from the most unexpected quarters. While Indian cashew industrialists were strengthening their production, cashew manufacturers in Vietnam took a short cut and imported the raw cashew, processed it with the help of cheap labour and exported it to the First World countries.

Mr. Prakash Kalbavi, Secretary of the Mangalore Cashew Manufacturers' Association (MCMA) feels that Indian manufacturers may be technically sound and efficient but the Vietnamese are faster in their market operations. This is the reason why they could increase their exports to the European Union from 1,272 tonnes of cashew kernal in 1999 to 2,407 tonnes in 2000. Vietnam also increased its cashew forex earnings from sales to the U.S. by 161 per cent by increasing exports from 170,600 tonnes in 1999 to 446,000 tonnes in 2000.

Mr. Giridhar Prabhu apprehends that at this rate the country's forex earnings from cashew would come down drastically. Estimates showed that Rs. 750 crore would be loss from the decrease in exports. India currently earned Rs. 2,500 crore from cashew exports, which could come down to Rs. 1,750 crore. This estimate was made on the assumption that the volume of exports remained unchanged.

Mr. Kalbavi told The Hindu that with four lakh tonnes of production, Indian cashewnut exports had "too little to consolidate." Crop forecast, estimation, and scientific methods of crop enhancement were yet to be taken up. The MCMA had planned to hold a series of brain-storming sessions throughout the country to mobilise industry support in the form of production of value-added products for export as well as for the domestic market, he added.

On the other hand, government organisations such as the Karnataka Cashew Development Corporation were getting a record low yield of only 100 kg. of cashew per hectare, and 27,000 hectares of land were under the KCDC cashew plantations in Uttara Kannada, Udupi and Dakshina Kannada districts. According to cashew export managers, India should have, at least six to seven lakh tonnes of cashew to be ``comfortable'' both in production and exports.

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