Pierce Leslie Cashews and Coffee Ltd managing director A Sankar told The Financial Express that the high prices for raw cashewnut and the dwindling margins would have a reckoning effect on Indian exports.

In addition, the devaluation of currencies in competing countries like Indonesia and Brazil would make things worse.

According to an industry analyst, Indonesia is trying to build up its exports to India. In recent years, Indonesia has been subjected to vagaries of nature and it is feared that this might have affected the intrinsic quality of their raw cashew nuts, its maturity size and the growth of kernels inside the nut.

Indian importers are therefore not sold on imports from that country.However, a section of cashew kernel exporters in Karnataka said the economic turmoil and the subsequent devaluation of that country's currencyhad made their prices unattractive. Though the Indonesian price of raw cashewnut is low, its prospects are not promising.

Their efforts to increase their share to India were hardly likely to succeed, Sankar said.

Total production of raw nuts in India is about 1.5 lakh tonne of which 0.85 lakh tonne is produced in Kerala. While the domestic market consumes about 40 per cent of the total production, the remaining is being exported. Total import of raw nuts into India is about 5 to 6 lakh tonne.

While being the largest exporter of cashew kernels, India is also the largest import of raw cashewnuts, which is processed into kernels for exports.

India enjoys a 70 per cent share in the global cashew kernel market, followed by Brazil and Vietnam. Of the total exports, over 38 per cent shipments are to the US and an equal amount to Western European countries like the Netherlands, France, UK, Italy, Germany and Greece. About four per cent each are exported to Japan and Gulf countries.

According to Sankar,considering the forex revenue from cashew exports, the Union government should consider it a plantation industry. Cashew is the second largest agricultural industry where India has got world monopoly. ``State governments should take bold steps to give forest and wasteland to companies prepared to invest in cashew plantations,'' he added.

He opined that cashew processing in the country had moved from cottage industry to a highly hygienic processing of ready-to-eat product. Because of increasing input costs, domestic processors were not moving to this line of business.

In spite of excellent engineering infrastructure in the country, technical inputs were virtually zero.

``Cashew fraternity and trading councils have neglected this area and we must tie up with one of the technical institutions. Technology upgradation by way of mechanised processing has to be brought in.

If the cashew industry and trade councils close their eyes to this fact, India will be losing monopoly of cashew industry which it hasenjoyed during the last century,'' Sankar added.

Major corporates which are exporters in the country are Britannia Industries of Bangalore, Vijayalaxmi Cashews, Premier Cashews, the KJP group and KPP group of Quilon, Achal Industries and Kalbavees of Mangalore. Leading importers include Vijayalaxmi Cashews and the KJP group of Quilon, KV Subaraya Kamat of Mangalore.

Exports of cashew kernel were estimated to have increased to 65,491 tonne valued at US $323.83 million (Rs 1359.76 crore) during April '98-January '99 period of the last fiscal against shipments of 64,862 tonne valued at US $316.60 million (Rs 1,163.79 crore) during the same period of the previous fiscal.