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Africa’s move to process more cashews may hit Indian industry
Poor productivity of Indian cashew plantations is one of the major reasons behind the cashew nut processing sector performing at below capacity despite the enormous skill advantage. India produces 6-7 million tonne of raw cashews per annum and processes nearly 60% of the kernels consumed globally. “There is definitely a realisation in Africa that they need to process more nuts in their country and it can impact our processing industry. While the concerns are real, we may get more time as these countries are facing too many problems. Labour indiscipline, political unrest and unskilled labour are the major problems faced by the countries in developing their processing sector,” Pratap Nair of Vijayalakshmi Cashews told FE.
African Cashew Alliance (ACA), formed in 2005, is promoting and supporting processing ventures in producing countries. According to ACA, African farmers currently grow about 48% of the world’s cashews. Africa is now the largest producer of raw nuts with more than one million tonne production in 2012. However, processing in Africa remains low, with processing experts like India importing good volumes every year and re-exporting kernels to the US and European market at higher rates.
Indian productivity is lower by three to four times the productivity achieved by Vietnam. While Vietnam has hardly 10% of the world’s cashew farming area, it produces 34% of the world’s cashew. India, on the other hand, has the largest share of land under cashew (24%) but has a share of only 19% in total production. The productivity of Vietnam is 2.8 tonne of cashew nuts per hectare, while the average productivity in India is only 663 kg per hectare. Cashew is mainly cultivated in Maharashtra, Andhra Pradesh, Odisha, Kerala, Karnataka, and Tamil Nadu. To a limited extent, it is being cultivated in Chhattisgarh, the north-eastern states and Andaman & Nicobar Islands.
In India, cashew processing is a labour intensive process with women constituting almost 90% of the total labour. Labourers from Kerala are known for their skilled and delicate handling of the kernel with nuts retaining shape after value-addition. Over two-thirds of the processing units are in Kerala, while the rest are scattered across other states.
Together, these units have an annual processing capacity of over 8,00,000 tonne. Changing socio-economic factors, consequent to economic growth, have made mechanization of the sector imperative. Labourers are also finding the sector unattractive due to the nature of the job and poor remuneration compared to other sectors.
“Some Indian processors have moved to Africa to reap the cost advantage of transporting raw nuts. More processors may follow due to increasing labour and transportation costs. We may face competition for raw nuts as Vietnam develops its processing industry further,” Pratap Nair added.
Cashew nut exports in the last fiscal touched 1,13,260 tonne, valued at R4,975.96 crore, as per data by Cashew Export Promotion Council of India. The increase is 13% in terms of volume while the value has gone up by 23%.
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