With the increasing cashew kernel imports from Vietnam and Tanzania posing a major threat to the domestic industry, cashew processors across the country have decided to join hands to form a national-level federation to fight the “menace.”
The decision was taken at a meeting of cashew processors from across the country here on June 15.
The meeting was convened at the initiative of the Kollam-based Cashew Manufacturers and Exporters Association. In the past Kerala, especially Kollam, was where the cashew processing industry was concentrated. But now, processing takes place in the States of Tamil Nadu, Karnataka, Maharashtra, Goa, Andhra Pradesh, West Bengal, and Odisha.
Vietnam, which earlier exported raw cashew to India, is now a major cashew-processing nation, posing a two-pronged threat to Indian cashew kernels. After giving Indian kernels a stiff competition in the international market, processors from Vietnam have dared their Indian competitors by entering the Indian market in a big way.
Though it may sound like taking coal to Newcastle, the reality is that a large quantity of the kernels now available in the northern markets of the country is from Vietnam. One of the main factors that facilitate this import spree is the low import duty on kernels. In addition to that, fraudulent methods are also used to import kernels under the guise of cattle and poultry feed. This is resulting in huge financial losses to the domestic industry, which in Kerala alone provides employment to more than 5 lakh women.
Cashew manufacturers from the Kollam-based association had taken up the issue with the Union Finance Minister P. Chidambaram and the latter, in April this year, had passed an order to hike the import duty of cashew kernels to 70 per cent. But the relief which this brought to the processing industry was short-lived.
In May through another notification, the import duty was slashed to 46.5 per cent by fixing a minimum import duty of Rs.60 on broken grades and Rs.75 on wholes. The manufacturers allege that this notification gives a clean chit to regularising all the undervalued imports of cashew kernels into the country.
Moreover, the minimum duty corresponds to an import price of Rs.133 a kg on broken grades and Rs.166 a kg on whole grade of cashew, as against the prevailing average market rate of Rs.288 and Rs.407, respectively. They said that imports into India had gone up by about 20 per cent after the notification came into force.
This has affected the industry, which brings annual foreign exchange earnings estimated at Rs.4,500 crore. The domestic trade is calculated at Rs.6,000 crore annually.
The cashew manufacturers said though the problem affected the industry all over the country, it was only the Kollam-based processors who had made a representation to the Union government.
If there was more political support for the issue from other States, the problem would get better attention in Delhi. Hence, the need for a national-level federation, the processors said.
The manufacturers said that the federation would be headquartered in Kollam, and have branch offices in Mangalore and Bhubaneswar.