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  • Cashew industry slipping into a crisis

    Nov 27th, 2019

    Mounting imports of cashew kernels have plunged the cashew industry into a crisis even as it is struggling to stay afloat in the global market amid rising price of raw nuts and the threat of withdrawal of export incentives. The commerce ministry recently asked the Cashew Export Promotion Council of India (CEPCI) to file an application on anti-dumping with director general of trade remedies (DGTR). “We will be meeting the DGTR official on Friday to discuss the issue,’’ said said R K Bhoodes, CEPCI chairman.

    He said monthly 500 to 600 tonnes of semi-finished or finished kernels are being dumped into the country, adversely affecting the cashew processing industry that employs 15 lakh workers, most of whom are women.

    “Large volumes of semi-finished kernels are dumped in India under advance authorisation and duty free tariff preference scheme from African countries by making use of export incentives and reduction in duties and levies there. The landed price of such kernels is 50 per cent the cost of kernels in India. These are mostly broken kernels which are generally not consumed in other countries,’’ Bhoodes pointed out. Besides, plain cashew nuts have been imported by misdeclaration as roasted cashew, which is duty-free, and finished kernels, which are re-exported as Indian cashew just by re-packing.

    India is currently the largest consumer of cashew globally at over 300,000 tonnes annually. “The sale that normally doubles during Diwali was only 25 per cent higher this year. Prices have dropped from about Rs 750 per kg to Rs 625 post Diwali with demand softened by rising import,’’ said K Prakash Rao, managing partner of Kalbavi Cashews.

    But the rates are still above export prices. Though export for April-September 2019 showed 7 per cent increase in volumes at 32845 tonnes , in terms of value there was 13 per cent fall to Rs 1859 crore year-on-year. Shipments have been hit in the second half by subdued demand in the global market.

    According to Rao, lower output in Tanzania, where the harvest has started, has already pushed up raw nut prices by 25 per cent to $1500 per tonne. India meets over 60 per cent of its raw nut requirement for processing through import and a higher price will raise the cost of production. “The exporters also fear withdrawal of incentives under merchandise export of India scheme (MEIS) after December. At present they get 5 per cent export incentive,’’ he said.