Indian Market is $5.25/LB/Super White 320

Some cashew nuts contain a different peculiar oil which is not fit for human consumption. Usually, processors dispose these kinds of nuts and brown nuts as poultry or cattle feed. Lankan presidents tirade is against these kinds of reject cashew nuts, served to him on a flight.

According to him, the nuts supplied to him were not fit for even dogs.

Actually, there is a global shortage of white wholes and white pieces. Reasonable quality now needs a practical market. Instead of offering a realistic price, some buyers ask oily mix kernels and offer proportionate decrease in the prices. Such kernels mostly sell in tourist centers.

Indian cashew export earnings may fall

KOCHI: India stands to lose a significant share of over Rupees 5,000-crore annual export earnings of cashew as export of the nut heads for its worst fall in a decade with over 80 per cent of the factories in Kerala, which holds a major share of shipments, remaining closed.

The nut export has plunged by 34 per cent for four months to July in FY19 from a year earlier to 20,667 tonnes. Despite an increase in the unit value of cashew, the export earnings for the period have also slumped by 32 per cent to Rupees,1447 crore as per data of The Cashew Export Promotion Council of India (CEPCI). “Unless the Centre approves the revival package submitted by the industry and extends the time to meet the new input-output norms, the current trend may persist for the remaining year,’’ said S Kannan, CEPCI executive director.

In 2017-18, cashew export volumes had bucked the trend of the previous two years and registered a marginal rise in quantity at 84,352 tonnes. The value had shown a healthy rise of 13.5 per cent to Rupees5,871 crore.

While cashew processing takes place in as many as 16 states, the export is dominated by the processors from Kollam district in Kerala. But apart from some big ones, 700 out of 834 units have wound up business in the past 2-3 years, defaulting on bank loans.

The trouble began with the imposition of 9.36 per cent import duty to curtail misuse in 2016. This was followed by the rise in the price of raw nuts by over three times to touch $2,400 per tonne.

Ivory Coast: cashew nut slump on low prices but farmers are hopeful

A drop in the prices of cashew nut globally is impacting the operations of cashew nut farmers in Ivory Coast.

Rich in taste and filled with protein, the cashew nut is a familiar ingredient in meals, and other food products such as cashew butter.

But cashew nut farmers in Yamoussoukro, the political capital of Ivory Coast say they have been struggling to sell their yields, with an estimated 150,000 tonnes of stockpiles of bags lying around in warehouses.

We used to sell our cashew at a high price and would benefit from the sales. But I must say we have been experiencing some serious challenges this year.

“The cashew industry is really in bad shape, it’s in bad shape. We used to sell our cashew at a high price and would benefit from the sales. But I must say we have been experiencing some serious challenges this year. The price of cashew has been fixed at 500 francs (0.88 US cent) per kilo. Since February up to today, we have been experiencing a lot of challenges. We no longer have partners because they are all gone. Now we only have unreliable buyers who give us a very low price. Meaning 250 Francs (0.44 US cents), 200 Francs (0.35 US cents), despite the fact that our cashew is of high quality”; said Cashew nut farmer, Souleymane Bamba.

International prices for cashews have dropped by nearly half since March after consumers in the United States and Saudi Arabia objected to high prices.

Ivory Coast is the world’s top cashew nut producer with output of 770,000 tonnes expected this year.

Adama Coulibali is General Manager of the Ivory Coast cotton and cashew council.

“Unfortunately, we only have two clients. There is Vietnam, which takes around 70 per cent of cashew exports. India, which takes around 28 per cent of our exports, and Brazil which takes around 2 per cent. And when there are difficulties in a country like Vietnam, then it has a negative impact on our sales and exports”, he said.

Ivory Coast’s cashew sector employs about 450,000 growers and has been an important source of economic growth.

Authorities are hoping to increase the country’s processing capacity from the current 100,000 tonnes per year to at least 300,000 tons by 2020 in order to make the sector less vulnerable to international market swings, Coulibaly said.

Reuters

Current calculation of cashew processing in India

It is better to temporarily shut down the industry, instead of selling finished goods below the cost or buying raw material above the cost of production.

If the available raw cashew is of poor quality, then the only viable alternative is to increase the kernel market above the no loss level.

This is our simple calculation —

At present, the average import price of 21% filling raw cashew is ₹13500/Quintal.

If the wholesale price of W320 reaches ₹900/kilo, the average for 21 kilo may be 6% less, i.e around ₹846 as every grade is not a W320. There are many lower grades like BB, DW, Dotted grades and Red grades.

GST is 5% and interest factor may be 5%. After deducting 10% for these two costs, the figure comes to ₹761.4/kilo.

21 * 761.4 = 15989. If the by-products are worth ₹611, the final figure of all sales is ₹16600.

₹16600 – ₹3100 (Labour, Manufacturing, packing, commission, transportation, maintenance, depreciation and other expenses) = ₹13500/

“So the production cost of W320 is ₹900/kilo”

(Our calculation is approximate and also subject to quality of grading & region wise changes. Labour cost is 8-10% less in Vietnam but Indians get better quality nuts from Africa because of the distance factor)

Real Intention of Bearish Rumor Mongers is to Prevent Trade Defaults


Onset of festive season in India and Chinese vigilance on cross-border trade in almond and pistachios might cause some exporters to default contracts in cashew kernel. Vietnam’s export to EU and USA is on decline due to growing Chinese demand.

Earlier almonds, pistachios and cashew would flow without import duty in small vehicles across Vietnam Chinese border. But now, China has increased patrolling and has been levying heavy duty and penalties on almonds and pistachios as a consequence of trade war. So, only cashew is moving freely across border. Therefore small processors in Vietnam are the beneficiaries and have in turn stopped supplies to large exporters.

Therefore, some trade analysts are spreading bearish rumors to stop default in existing contracts but not to rock bottom the market, which is already at unrealistic low.

Cashew industrialists call for urgent revival package

Kerala small and medium cashew industrialists on Sunday requested the Centre and the state government to come out with a package to save the sector, which is facing a severe financial crisis.

The leaders of the joint protest council of cashew industrialists said they approached both the Centre and the state government seeking help to revive the sector, but in vain.

"It is high time that the Union and state governments stop the negative attitude towards the crisis in the cashew industry and sufferings of the entrepreneurs, as well as lakhs of workers in the sector," council convenor K Rajesh told .

As part of agitation to highlight their demands, the council would organise a protest rally to the Secretariat in Thiruvananthapuran on September 10, he said.

Their demands include steps to provide fresh soft loans to reopen factories, financial aid for semi-mechanisation of units and waiver of interest on loans for three years.