The Hindu Business Line : Price fall knocks off cashew exports' value

CASHEW exports during 2003-'04 are expected to touch last year's level in terms of quantity, but in terms of value, it is likely to drop on decline in the unit value.

Export of cashew kernels in the last fiscal is expected to touch the previous year's level of 1,04,000 tonnes. However, in terms of value, it is estimated to fall short of the 2002-'03 figure of Rs 1,933 crore.

Exports during April-February 2003-'04 stood at 90,757 tonnes valued at Rs 1,624 crore as against 94,911 tonnes worth Rs 1,780 crore previously.

Export in March 2004 is estimated to be over 10,000 tonnes, Mr Sasi Verma, Secretary, Cashew Export Promotion Council of India (CEPC), told Business Line. He said the unit value had dropped to Rs 179 a kg during 2003-'04 from Rs 188 the previous year.

Stiff competition from Vietnam, which had exported 63,000 tonnes of cashew kernel in 2002 and an estimated 80,000 tonnes in 2003, had become a major threat to Indian cashew exports, he said. Added to this is the almond lobby in the US.

The tree-nut, which is the major crop in California, is being promoted in a big way by Californialmond producers/buyers who get substantial subsidies and assistance from the Government.

They spend huge amounts on promotional activities, including propagation of almond's nutritional values. In contrast, there was hardly any activity to promote cashew kernels in these markets, Mr Verma said.

A study conducted in the US and Japan by TCS and KPMG, respectively suggested more promotional activities to highlight the nutritional value of cashew. However, no action had been taken so far, with Mr Verma stating that research on the cashew's nutritional value was required before embarking on a promotional venture.

Even this was yet to be initiated for want of financial support, he said.

In fact, because of the stringent methods introduced last year, the Market Development Assistance (MDA) would not be available for exporters with export turnover of over Rs 4 crore per year, for more than three participations in a particular fair/exhibition, and unless the CEPC official was accompanied by at least five exporters, he said. Consequently, the council had not been able to take up increased promotional efforts.

During 2002-'03, "we could attend only two fairs, and it is for the first time that we have not been able to participate in some of the important international food fairs," he said. As cashew is a high-value commodity and given the crisis situation in the industry, he said, the conditions for availing ourselves of MDA have to be suitably relaxed.

At the current price for raw cashew nuts, the parity price for cashew kernels worked out to about $2.00 per lb, while Indian exporters were able to realise only about $1.75 to $1.80 per lb, due to severe competition from Vietnam, Mr Verma said.

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