King among the wide variety of nuts, the crunchy cashew is an important plantation crop grown mainly in the southern parts of the country. The cashew value chain generates income for growers, employment in processing units and of course foreign exchange earnings through exports.
About 10 lakh persons, mainly women, are engaged in this sector. India is the world's largest producer, importer and processor of raw cashew and largest exporter of cashew kernels. While area under cultivation has expanded to about nine lakh hectares, raw cashew output has been rising steadily and currently stands at seven lakh tonnes (lt). Maharashtra leads the race with 30 per cent of total national output followed by Andhra Pradesh, Orissa and Kerala.
Domestic and global demand for cashew nut has been growing steadily. As processing capacity exceeds available raw material, the country imports raw cashew mainly from African countries. In the last three years, the value of raw cashew imports has been in the $400-600 million range.
Cashew kernels intended for the export market are processed, graded, value-added products that often enjoy a premium because of size, colour and flavour profile. India's cashew kernel shipments have been in the region of 1.2-1.4 lt in recent years with value of around $550-650 million. The US, Europe and Japan are some of the major destinations for Indian cashew kernels.
Interestingly, rising incomes and changing lifestyle are driving domestic demand. Use of cashew as a table nut and as ingredient in sweets and confectionary is growing, pushing India's internal consumption higher. Spread of organised retail and marketing of cashew kernels in consumer packs is boosting volumes. The trend is likely to continue.
In recent years, the usual export to domestic consumption ratio of 60:40 has undergone a dramatic reversal and now stands at 40:60. To meet growing domestic demand, a large number of cashew processing units (currently estimated at 1,500) have been set up in different parts of the country with an estimated total processing capacity of 13 lt a year. To meet processing needs, raw cashew import volumes have been rising. In order to promote holistic growth of the horticulture sector including cashew, a national horticulture mission is under implementation since 2005-06. For increasing production and productivity, the mission is undertaking new plantations as also replanting old senile and uneconomic cashew gardens with high yielding varieties.
In addition are support programmes such as establishment of nurseries, IPM/INM, organic farming and so on. The potential of cashew as a premium food product or ingredient has not yet been fully tapped. It is necessary to design a growth oriented policy for the cashew sector with a long-term perspective. Infusion of supply chain efficiencies is of paramount importance. The policy must encourage yield enhancement, quality improvement, modernisation of processing units, enforcement of quality norms and exploration of new markets in addition to servicing the existing markets. An appropriate institutional mechanism for implementing such a policy needs to be put in place.
Source : Business Line