The Cashew Export Promotion Council of India (CEPCI) on Thursday urged the central government to initiate immediate steps to arrest the slide in the fortunes of the cashew industry in particular and exports in general.
"Unfavourable export policies have resulted in a fall of cashew exports from 41,955 tonnes in the first quarter of the last financial year to 30,319 tonnes during the same period in the current fiscal. In revenue terms, the export earnings slipped from Rs.2.1 crore to Rs.1.7 crore," CEPCI Chairman P. Sundaram told reporters here.
Set up in 1955 by the Government of India, CEPCI provides necessary institutional framework for performing different functions for promoting export of cashew kernels.
What hit the industry worst was the newly-introduced import duty, Sundaram pointed out. "As per the new norms, duty-free imports is possible only if kernels weighing 25 per cent of the raw nuts is imported and kernels worth 15 per cent more in value is exported within 18 months."
The CEPCI has submitted certain remedial measures to Union Finance Minister Arun Jaitley and Minister of State for Commerce & Industry Nirmala Sitharaman.
"The remedial measures include a special package for the cashew industry, similar to what was given to the textile sector in the past, and measures like rollback of the import duty imposed on raw nuts with retrospective effect from March 1, 2016, restoration of export incentives to five per cent, allowing unhindered processing to enable fulfilment of export contracts, etc.," said Chairman of the Federation of Indian Cashew Industry R.K. Bhoodes.
The overall picture of the cashew industry looks very grim, as out of the total production capacity of 20 lakh tonnes a year, the production of raw nuts in the country has now fallen to under 7 lakh tonnes, and the import of raw nuts is in the range of around 9 lakh tonnes.
Kerala leads the rest of the country with 85 per cent of country’s cashew exports, but due to huge cost of production, things are going from bad to worse.
"Until a decade back, India was the leading producer, exporter and consumer of cashew in the world, but now things have changed, and Vietnam is surging fast. The factor pushing Vietnam to the forefront is the cost of production — the cost of producing 80 kgs of cashew is around Rs.1,250 there, while in Kerala, it costs Rs.3,500. Likewise, the productivity from one acre there is 2,500 kg, while here it’s 700 kg," Sundaram observed.
CEPCI officials also said that even though there are 793 cashew factories in Kerala, barely 140 of them are operational.
"Factories outside Kerala concentrate on domestic supplies. While there are more than 3,000 factories, a majority of them are in the unorganised sector. There also, the cost of production is quite high," said Bhoodes.
CEPCI also welcomed the Kerala government’s decision to take up cultivation of cashew in states, like Maharashtra and Andhra Pradesh.
Maharashtra leads the rest of the country in terms of total area under cashew cultivation, which accounts for 32 per cent of the total 10 lakh hectare, while Kerala’s share is just 10 per cent.