Date:29/11/2004 URL: http://www.thehindubusinessline.com/2004/11/29/stories/2004112900881300.htm

Back Steady decline in unit price of export cashew

Vinson Kurian

Thiruvananthapuram , Nov. 28

THERE has been a steady decline in the unit price of export cashew from Rs 267 per kg in 1999-2000 to Rs 179 per kg in 2003-04, according to a review of the sector undertaken by the WTO (World Trade Organisation) Cell of the State Agriculture Department.

The decline in unit price has been attributed to stiff competition from Vietnam and improved raw nut production in East and West Africa.

Between 1995-96 and 1999-00, cashew kernel exports rose by 37.6 per cent whereas between 2000-01 and 2003-04, the increase was only 13 per cent in quantity terms. In value terms, exports of kernels had declined by 12 per cent during the same period.

Exports of cashew kernels increased from 70,334 tonnes in 1995-96 to over one lakh tonnes in 2003-04. (It is estimated that 100 kg of cashewnuts will yield around 23 kg of cashew kernels.)

Imports of raw nuts looked up by 11.9 per cent during the period of 1995-96 through 2000-01 (from 2.22 lakh tonnes to 2.49 lakh tonnes). However, between 2001-02 and 2003-04, they increased by 27 per cent (from 3.5 lakh tonnes to 4.5 lakh tonnes). In value terms, the imports rose 47 per cent between 2001-02 and 2003-04 as compared to 23 per cent between 1995-96 and 2000-01.

Domestic output lags: Raw nuts are imported to meet the demands of the processing industry, which has an installed capacity of 10 lakh tonnes. As against this, the domestic production during the last year (2003-04) amounted to only 5.3 lakh tonnes.

Removal of quantitative restrictions on imports in 2001 may have encouraged import of raw nuts in larger quantities but it has also entailed a decrease in the unit price of imports from Rs 46.90 per kg in 1999-2000 to Rs 30.90 per kg in 2003-04. Raw nuts were freely importable at zero duty even before the removal of quantitative restrictions in April 2001. The surge in imports could be due to the reduced domestic production as compared to the export demand.

During April- September this year, exports of cashew kernels have increased by 50 per cent in value terms and 35 per cent in quantity terms as compared to the corresponding period last year. The unit value of exports increased from Rs 180.68 per kg last year to Rs 200.82 per kg during April-September 2004.

Demand for tree nuts: The increased consumption of tree nuts in the US and the EU and awareness about the nutritional benefits of cashew have helped in boosting exports, the review said.

Imports of raw nuts during April-Sept 2004 have increased by 41 per cent in quantity terms and 58 per cent in value terms. The net gain in exports during the period is Rs 31.83 crore (export earnings of Rs 1231.83 crore less value of imports of Rs1200 crore).