Strengthening of the Indian currency has dealt a serious blow to export of cashews, as revenue dropped by 10% in H1 compared to the same period last year. Competition from Vietnam has also contributed to the decline, which in quantity terms declined marginally by 1.8%. The decline has been persistent for six months and experts say that a recovery is unlikely given the macro situation.
India has seen volumes and value decline in the peak season of consumption in the US and the European and the lean season is not expected to help in recouping, traders said.
Earnings from export fell to Rs 1,097.06 crore for the first six months of the current fiscal, when compared to Rs 1,222.93 crore in the comparing period. Volumes declined to 57,157 tonne from 58,120 tonne in H1 of 2006-07, a Cashew Export Promotion Council official said. Unit realisation per kilogram of exports declined from Rs 210.04 per kg to Rs 191.94 in H1 of 2007-08.
The redeeming feature of the whole story has been the decline in the price of imported raw cashew kernels, which fell from Rs 30.36 per kg to Rs 24.44 per kg in 2007-08. The drop in input cost has helped the export sector withstand the impact of the currency appreciation to some extent. India imports raw cashew kernels for processing and re-exports. Of the world?s total production of 16.5 lakh tonne of cashew, India accounts for processing about two-thirds.