Crunch time for cashew sector as demand falls

KOCHI: The cashew industry is facing a double whammy as it grapples with shrinking consumption due to liquidity crunch while it is unable to cash in on the depreciation of rupee due to the fall in global prices. India is the largest consumer of cashew in the world, but consumption has taken a hit owing to the liquidity crunch following demonetisation.

“Sales have dropped, which could be temporary . Since it is the marriage season, it could pick up some time later,'' said Hari Krishnan R Nair, managing director of Western India Cashew Co.The industry was hoping to take advan tage of the depreciation of rupee through exports. But cashew kernel prices have fallen after ruling high for several weeks, putting paid to the industry's hopes.

“Cashew prices, which were at around $4.90 per pound, have dropped to $4.50 per pound. It makes exports unviable since the raw nuts have been bought at high prices,'' said Pankaj N Sampat, director of Mumbai-based Samson Traders. More than 60% of the raw nuts required for processing are imported mostly from African countries.

With active purchases by Vietnam, the prices had shot up to a historic $2,450 per tonne a few months ago. At that rate, the exporters needed to get over $4.80 to $4.90 to break even.