Cashew prices likely to spike this festival season
KOCHI: Cashew nuts may become dearer this festival season but the industry expects better sales as demand has started picking up.
Facing a setback in exports, the cashew industry is pinning its hopes on domestic sales, which had remained sluggish so far this year.
“The festival season will start by the end of the month and the market is looking up,’’ said G Sathish Nair, managing partner of India Food Exports, which produces the Delinut brand of cashew.
Last year, the Diwali sales of cashew nut had slumped owing to high imported raw nut prices and hiccups in the implementation of goods and services tax (GST). “Now all the hurdles are gone and GST has aided the sales as there is only a single tax,’’ said Nair.
India imports over 60per cent of the raw cashew nut required for processing.
The raw nut prices escalated last year forcing importers to cut down on shipments. “The raw nut prices have dropped by 30-35per cent globally in tandem with the fall in cashew kernel prices,’’ said Pankaj N Sampat, director of Samson Traders.
The retail cashew prices in India were around Rupee800 per kg last year during festival season as higher raw nut prices led to 20per cent drop in imports.
Though depreciation of the rupee has made imports costly, the fall in prices has offset the impact to an extent this year. The industry reckons that prices will move up slightly because of the demand. “The retail prices could go up by 5 to 10per cent,’’ said Nair.
India consumes nearly 3 lakh tonnes of cashew annually, over three times the quantity it exports, making the country the biggest consumer in the world. Cashew export shrunk from around 1.20 lakh tonnes earlier to 84,352 tonnes last year.
Cashew kernel prices which soared to a historical high of $5.40 per pound last year has declined to around $4.25 per pound now. “With processors in India and Vietnam facing funds crunch as the banks tightened credit outflow, they were unable to take advantage of cheaper raw nuts and export more kernels ,’’ said K Prakash Rao, managing partner of Kalbavi Cashew
Further, Iran, a major buyer, has gone slow on purchases of Indian cashews because of trade sanctions by the United States. These factors have caused exports to slacken.
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