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  • Processed Cashew Output likely to Increase

    Jan 3rd, 2020

    India’s processed cashew output will likely increase this year with the withdrawal of permission by the directorate general of foreign trade (DGFT) to import de-shelled cashew kernel under the advance licence programme. The decision was taken as local processors were hit by unbridled import of de-shelled or semi-processed cashew kernels through what traders said a misuse of the advance licence scheme. The incentive is otherwise meant for duty-free import of raw cashew for value addition and exports.

    “Such de-shelled kernels were being sold in the domestic market at half the price of the locally processed nuts. This has pushed the local cashew processing units to the verge of closure,’’ said RK Bhoodes, former chairman of the Cashew Export Promotion Council of India (CEPCI). Under the advance licence scheme announced in May 2018, about rs 100 crore worth of kernels may have come into the country. Last month alone, around 4,000 tonnes of de-shelled kernels reached India he said. To fulfil the export norms under the advance licence scheme, importers buy from the domestic market.

    Rising imports even hit local demand during Diwali, when usually the sales peak in the country. As a result, the prices dropped. “From around rs 700, the price has fallen to around rs 600 per kg,’’ said P Sundaran, managing dircetor of Sreelekshmi Cashew Company. India is the largest consumer of cashew nuts, at 300,000 tonnes annually

    The import of de-shelled cashew from those countries was helped by the duty-free tariff preference schemes, export incentives and reduction in duties and levies offered to boost the shipment of such kernels, Bhoodes said. Under the order of 2018, overseas growers often dumped broken kernels, which are produced more in fully mechanised processing. The export market largely consists of whole kernels. India has now fixed a minimum import price for whole and broken kernels and raised the import duty on cashew kernels to 70 per cent. However, the de-shelled kernel import continued unabated even after that. Most of the cashew processors turned to the domestic market as exports became unviable.

    “Countries such as Vietnam, with virtually no domestic consumption, are able to export its entire production at a rate cheaper than India. Even now, the Indian kernel is priced at $3.60 per pound against Vietnam’s $3.45 per pound,’’ said Pankaj N Sampat, director of Samson Traders.