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  • Goan cashew industry loses crunch

    May 24th, 2020

    Cashew nut prices in the state have crashed leaving farmers worried. All in all, the current 2020 cashew season lacks flavour due to the looming presence COVID-19, reports Shoma Patnaik

    Coronavirus infection continues to play spoilsport on Goa’s cashew trade. On the heels of significantly decreasing the earnings of local growers the pandemic impact is now on the cashew processing industry in the state.

    Presently with local processing units worried over the market prospects of finished nuts they are unwilling to purchase raw material to add to their inventory. Consequently nut price is crashed with the biggest buyer Goa Bagayatdar, Ponda, quoting a rate of Rs 92 per kg from Rs 105 per kg, recently.

    Since the beginning of the season, nut price is come down over 30 per cent, from Rs 136 per kg to the current price of Rs 92 per kg. With the bearish trend expected to continue it is likely that cashew price will fall further.

    According to participants of Goa’s cashew industry, the ongoing cashew season that is at its fag end now is been a tough one for everybody. For the first time cashew price dropped below the minimum support price (MSP) of Rs 100 thanks to which the government had to step in and offer a higher MSP of Rs 25 per kg above the notified price of Rs 105 per kg.

    “Farmers are unhappy because in the 2019 season they earned satisfactorily while in the present season they have to depend on the government’s MSP. Even the MSP is no solution because it delays money at the hands of the farmer. Instead of receiving cash on hand at the time of selling they have to wait until the government goes through their application and clears the bill,” says Ulhas Umarye, managing director, Goa Bagayatdar.

    He adds that, the fall in cashew price is because of market forces as demand is poor from the processing industry. “On the whole lockdown is hit the cashew industry,” says Umarye. He explains that, thanks to lockdown farmers could not visit their plantations and harvest the crop in time. At the same time operations of the processing industry is disturbed and they are worried over the future.

    “Most processing units have stocks of finished cashews on hand. It cannot be sent to Mumbai or other consuming markets and they are not accepting cashews. The outside wholesale markets are closed and the Goan market is shrunk due to the absence of tourists,” says Rohit Zantye, secretary, Cashew Processors Association Goa .

    According to Zantye, the cashew processing industry is taking a huge risk while buying from farmers. “At least the farmers are getting support from the government. For us the local market is in doldrums. Tourism revival looks far way. With no demand from weddings, hotels, etc, we only have to look at the export market. In exports too there is uncertainty,” he claims.

    Processor AS Kamath, owner, Ajanta Industries, Ponda, says that, the industry is facing an overload of problems. “Our operations are affected due to the lockdown. The domestic market is down and on the export from no fresh orders are forthcoming. Overseas buyers have stalled payments. The payment from them is nil. Our cash flow is hit. It is difficult to meet the mandatory expenses. In the last 35 years I have never come across such as situation as caused by the lockdown.”

    According to members of the cashew industry, consumer behavior has changed and people are not eating as much cashews as before. They are preferring almonds. “In super markets cashews are not getting sold as much as almonds,” says Zantye,

    He says that, in Maharashtra and other states the cashew manufacturing industry prefers to keep factories closed instead of taking the risk of buying raw nuts. He explains that cashew market in the state is heavily reliant on tourist purchases. Further about 30 per cent of the nuts processed is broken pieces for which there is no local market. “The broken cashew market is crashed. Bulk of broken pieces are sold to mithai makers who anticipate dull sales due to fewer weddings in 2020,” points out Zantye.

      The cashew processing industry in Goa comprises about 40-odd units. Of them only five to six units are large with annual turnover above Rs 10 crore and employing more than 50 workers.

    About 15 units are considered in the medium category while majority of the industry is made up of small units having annual turnover in the range of Rs two crore or less.

    The industry over the years has modernized but the investment in automation is mostly by the large and medium units.

    Competition from imports of raw nuts from outside is beating down the price of cashew in Goa. The state also has the problem of unscrupulous retailers who are getting kernels from outside and selling in local stores.

    Meanwhile the state’s cashew production in 2018-19, decreased slightly to 27,588 tons from 28,012 tons in 2017-18. Overall trend in local production is stagnant. The cultivation is mainly in the talukas of Sattari, Pednem, Bicholim, Bardez and Sanguem. The cashew season in Goa extends from March- May (until the arrival of the monsoons). “Cashew is a hardy crop. But production is falling in the state as plantations are being razed by fires,” remarked Umarye.