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Cashew export earns some Rs 2300 cr forex every year
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Friday, 16 March, 2018, 08 : 00 AM [IST]
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Dr Parashram Jakappa Patil
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Introduction
India’s cashew export sector is playing an important role in international trade of India. Cashew export earns more than Rs 2,300 crore of foreign exchange every year. Indian cashew trade has tremendous export potential.
Production of Cashew
From the starting of the 19th century, cashew nut industry has been there in India. Since the beginning, cashew nut industry has been making tremendous progress in respect of cashew cultivation, cashew production, cashew processing, and cashew kernels export. Indian cashew nut industry has dominating position in the world cashew market.
In India, cashew is being grown in an area of 10.27 lakh hectare with a total production of 7.25 lakh MT of raw nuts and unit area productivity of 706 kg/ha. India is the largest producer of raw cashew nut contributing 20% of total global production.
The major distribution of cashew in India is in the states of Kerala, Karnataka, Goa and Maharashtra along the West Coast; Tamil Nadu, Andhra Pradesh and Orissa along the East Coast; and to some extent in the states of West Bengal, Chhattisgarh, Gujarat, Jharkhand and North- Eastern States. The production and productivity of cashew is highest in the state of Maharashtra. The highest average productivity of Maharashtra is 1,262 kg/ha. Andhra Pradesh and Orissa are the other two states in the second and third position followed by Maharashtra in the production of cashew in India.
Cashew Export Potential
The cashew nut industry has big export potential which is increasing the prospects of the industry. India is the major exporter of cashew kernels and earns a sizeable amount of foreign exchange to the tune of Rs 5,500 crore per annum. India exports cashew kernels to more than 60 countries mainly to USA, the UAE, Netherlands, Saudi Arabia and Japan. A total of 1.19 lakh MT of cashew kernels were exported to these countries in addition to other byproducts like cashew nut shell liquid and cardanol.
Export Specifications
Standard specifications for Indian cashew kernels for export have been laid down by the Government of India under the Export (Quality Control And Inspection) Act 1963.
Grades
Cashew kernels are graded into white/scorched wholes, pieces, splits, butts and so on depending on the shape, size and colour of the kernel. The Act prescribes 33 different grades of cashew kernels. Only 26 grades are commercially available and exported. They are as follows:
Scorched wholes are another grade of cashew kernels, which have a slight brown colour due to longer roasting. They have all the other characteristics of white kernels and have the same nutritional qualities. Butts, splits and pieces are priced lower and are ideal for cooking, preparation of sweets and savoury snacks.
QC and Pre-shipment
Exports of cashew kernels from India are normally subject to voluntary quality control and pre-shipment inspection. Inspection of cashews is being conducted under consignment-wise inspection. It is ensured that the product is processed and packed as per the standards prescribed, by drawing samples from the finished product. Export of roasted and salted cashew kernels are also normally subjected to voluntary quality control.
Packing and Standard Weight
Cashew kernels in bulk are packed in four gallon prime tins with a net weight of 11.34 kg (or 25 lb) in each tin. The filled tins are then vacuumised and filled with carbon-di-oxide gas and sealed. Two such tins of the same grade are packed in a carton for export. The net weight of each carton is thus 22.68 kg (50 lb). Some manufacturers also pack in tins of 10kg net to suit the requirements of buyers in certain markets. Recently, some exporters have started using flexible packs instead of tins as many buyers opt for new generation flexible packs.
Shipping Specifications
The overall dimensions of a carton are as follows:
Cashew shipments from India are mainly in 20ft containers which carry about 650-700 cartons. Requests for less than a container load are also accepted by exporters in India. Freight is charged per Cubic Metre on volume basis. Freight for full container load is fixed and the same is cheaper than the freight for part container load (LCL).
Contract Terms
1. Contracts are normally made on FOB or C&F basis.
2. Pricing in international trade in cashew is in US$ per lb. Current and forward price quotations in US$ and other currencies are available on request directly from member exporters of the council.
3. Business in cashew is done on an offer and acceptance basis between buyers and sellers by telephone, telex or cable, since the prices are subject to frequent fluctuations.
4. The cost of insurance is borne by the buyer.
5. At the time of contract, the month of shipment, grade, price and so on, are to be clearly indicated. Sometimes, exporters offer commodity for shipments upto six months in advance.
6. Export dealings are usually finalised on the basis of the opening of 100% irrevocable Letter of Credit by the buyer in favour of the shipper. The LC is opened immediately on execution of contract or one month prior to shipment.
Other Information
India is the largest producer and exporter of cashew kernels in the world. Over 65% of the world export of cashew kernels is accounted for by India. Indian cashews are consumed in as many as 60 countries all over the world, the major markets being the United States, the United Kingdom, Japan, the Netherlands, Australia, Canada, Germany, Hong Kong, Singapore, New Zealand and the Middle-East. The Indian cashew kernel is well acclaimed for its quality, taste and appearance.
Members of the Cashew Export Promotion Council of India, who are manufacturers and exporters of cashew kernels are the major sources for cashews from India. Indian cashews are available with prominent importers in USA, Canada, Japan, the Middle-East, Singapore, Australia, the UK and other EEC (European Economic Community) countries. There are regular shipping facilities from India to all ports of the world. Major shipments from India take place through Cochin port. Other ports are Tuticorin, Mangalore, Madras and Bombay. Regular services of container ships are available from Indian ports on India-USA, India-UK/Continent, India-Australia, India-Japan, India-Middle-East and India-Singapore routes.
Business Export Potential
1. Export of cashew nut shell liquid/cardanol from India stood at 11,422 MT, valued at Rs 44 crore (US$6.75 million) during 2016-2017, while exports of cashew kernels stood at 82,302 MT (provisional) in FY 2016-17, valued at Rs 5,168.78 crore (US$793.91 million).
2. Export earnings from cashew and allied products during FY 2016-17 stood at Rs 5,077 crore (US$780.41 million).
3. India accounts for about 65% of global cashew exports.
4. India exports cashew kernels to over 60 countries. Its major markets are the US, the Netherlands, Japan, Spain, France, Germany, the UK as well as Middle-East countries such as the UAE and Saudi Arabia.
Cashew Export Schemes
Financial Support Schemes
Market Development Assistant Schemes for Exporters; Market Access Initiative Schemes for Exports
Non-Financial Schemes
Buyer-Sellers Meet; Trade Delegations; International Fairs; Workshop; Education and Training; Publications; Research and Development; Visa Recommendations
Conclusion
Indian cashew business has import as well as export potential. It is one of the significant industries which is giving valuable foreign exchange to Government of India over decades although there is competition in the Indian cashew nut industry to maintain its strong position in world cashew economy.
References
1. Jafee Steven (1994), ‘Private Trader Response to Market Liberalizations in Tanzania’s Cashew Nut Industry’, the World Bank Agricultural and Natural Resources Department Agricultural Policies Division.
2. Kumar Vijay Praveen, (2004), ‘Consumer Perspective on Cashew Procurement’,Indian Cashew Convention 2004 , Raddission White Sands Ressorts Goa , In continuation of konkan cashew festival 2003.
3. Krishanaswmamy.Brijesh, (Olam Expots), (2004),’Supply and Demand Dynamics 2004 Beyond Raw Cashew nuts and Kernels’, Indian Cashew Convention 2004, Radisson White Sands Ressort Goa, in continuation of the konkan cashew festival 2003.
4. Minas K Papademtriou, Edward M Herath (1998), ‘Integrated Production Practices of Cashew in Asia’, Food and Agricultures Organization of the United Nations, Regional Office for Asia and the Pacific Bangkok, Thailand.
5. Margaret Mcmillan, Dani Roderick and Karen Horn Welch (2002), ‘When Economic Reform Goes Wrong: Cashew in Mozambique’, National Bureau of Economic Research 1050 Massachusetts Avenue Cambridge, MA02138.
6. Mole, Paulo Nicua (2000), ‘Economic Analysis of Smallholder Cashew Development Mozambique’s Northern Provinces of Nampula’, Michigan State University.
7. Manojkuma.Meera ,(2004), ‘Managing the Price for Cashew’, Indian Cashew Convention 2004, Radission White Sands Ressort Goa , In continutation of the konkan cashew festival 2003 .
8. Mahajan, S.S. and Patil, (2009), ‘Role of Cashew nut Industry in Development of Hilly Region In Kolhapur District’, National Conference on Development of Hilly Region : The Problems and Potentials.
9. Nair Hari, (2004) ‘Marketing Nutrition – for Cashew,’ Indian Cashew Cashew Convention 2004, Raddission White Sands Ressorts Goa, In continuation of the konkan cashew festive 2003.
10. Naik Amita Namdeo, Kovlagi.A.K. and Wader.L.K., (2006). ‘Marketing of Cashew Kernels in North District of Goa’ Indian Journal Agriculture Marketing” publication of Indian Society of Agriculture Marketing 112-A Rachna Vishwa K T Nagar Kutol Road Nagpur.
11. Pillai Anu, (2004) ‘Increasing Domestic Kernels Consmpations’, Indian Cashew Convention 2004, Raddission White Sands Ressorts Goa, In continuation of konkan cashew festival 2003.
12. Rao Bhaskara.V, Swamy K. R. M. and Bhat.M.G. (2006), ‘Cashew, published in V.A. Parthasarathy, P.K.Chattopadhyay and T.K. Bose (Ed.), Plantation Crops, Paratha Sankar Basu, Kolkata.
13. Ramaswamy.P, ( 1967 ) ‘Mechanization in Cashew Processing and Its Implications for Indian Cashew Industry’, Indian Journal Agriculture Marketing ,Published by the Directorate of Marketing and Inspection, Ministry of Food, Agriculture Community Development & Cooperation (Department of Agriculture), Government of India, Nagpur.
14. Prabhu.G.Giridhar, (2004) ‘Cashew International Market Dynamics 2004’, Indian Cashew Convention 2004, Radisson White Sands Resort Goa, In continuation of the konkan cashew festival 2003.
15. Sandhu.H.K. (1982), ‘An Econometric Analysis of Indian Export – Share of Cashew Kernels in the World Trade’, Indian Journal of Agricultural Economics, 42nd Annual Conference of the Indian Society of Agriculture Economics, Patanagar, (Nainital).
(The author is social scientist and chairman, The Institute for Natural Resources, Kolhapur, Maharashtra. He can contacted at
patilparashram9@gmail.com)
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