Cashew kernel exports likely to be around 5 pct this year

Cashew kernel exports, which have been on a decline since last five years following intense competition from Vietnam is likely to be around 5 percent this calendar year (CY), Icra said in a report.

In CY12, India's exports stood at 1.02 lakh tonne, enjoying 27 percent market share compared to 58 percent of Vietnam, Icra assistant vice president, and head, mid-corporate ratings, R Srinivasan told PTI here.

"However, since then India's market share began declining and while the Indian cashew exports recorded a marginal decline at an annually 3 percent between CY2012 and CY2017, the exports from Vietnam grew at 10 annually during the same period," he said.

In CY17, India's share was 19 percent of global exports with 88,000 tonnes while Vietnam enjoys 74 percent, he added.

Lower cost of production aided by a higher degree of mechanisation and cheaper labour costs have aided the Vietnamese processors to become more competitive in the global market, the Icra report said.

To compete with Vietnam, the government should encourage mechanisation in the cashew processing sector through incentives, Srinivasan said.

He said, cashew output also needs to be boosted through high yield plant varieties.

"In fact, overall our cashew output is lower than other producing countries and there is a need for right crop varieties to boost production," he added.

The government has protected domestic industry by way of 45 percent import duty on cashew kernels, which has supported higher domestic price resulting in Indian processors focusing increasingly on the domestic market, Srinivasan said.

In terms of output, the world cashew kernel production is led by Vietnam and India. While in consumption, India has registered a stronger growth than the rest of the world and continues to be the largest market for cashew kernels, supported by its usage in traditional sweets and snacks.

Despite elevated price levels in the recent years, cashew kernel demand has sustained and the growth trend in both domestic and global demand is expected to continue going forward.

"We expect the domestic consumption to grow 6-8 percent this year," he added.