Nod to resume operations a relief to cashew exporters

Partly processes kernel in factories susceptible to damage

The government nod to resume operations at cashew processing units has brought a big relief to exporters who are holding huge volumes of unprocessed stock.

According to the Cashew Export Promotion Council of India (CEPCI), cashew processing units across the country are holding around 1,50,000 tonnes of cashew kernels worth ₹9,000 crore in different stages of processing.

Since the partly processed kernels are prone to damage by infestation, reopening the factories to complete processing is the only way left for saving the stock.

Colour change

“Further, the colour changes of the kernels will make it unacceptable for the export market. All these have caused heavy damage to the cashew sector. In Kerala alone, the stock of cashew kernels exposed in different stages of processing is estimated at 17,000 tonnes worth ₹1,020 crore,” said a CEPCI official.

COVID-19 has hit the sector hard with dwindling shipments in the past couple of months with April registering almost zero export.

Competitiors

“This has also helped countries such as Vietnam and new comers of the African region to grab the Indian share in a big way. The industry is afraid of far-reaching adverse effects in the days ahead as the overseas market once lost is hard to recapture. It is the relationship with overseas buyers built up over years that got spoiled due to the non-perfomance,” he said.

While all stakeholders in the industry welcome the decision permitting processing units to operate with 50% workforce, they will have to strive hard in their efforts to recapture the lost export markets.

Smooth sail unlikely

They point out that though the present decision of the Central government has brought in a huge respite, there will not be any smooth sailing.

Due to the long exposure, the recovery rates of kernels are expected to be 50% only, causing heavy financial losses to the sector.

“The cashew sector was on the path to recovery from a big financial crisis. Further, a number of exporters had to suffer heavy losses in the forward forex booking due to depreciation of rupee against dollar, which could have been avoided if the export orders could be fulfilled,” he said.