Kerala cashew exporters seek fresh working capital

By: | Published: August 31, 2018 1:34 AM

Distressed cashew exporters from Kerala have petitioned the central government to stop all recovery proceedings and help with fresh working capital.

Out of the 834 registered factories, around 700 are closed for the past two to three years, according to Sasidharan Achari of Kollam-based Mahalakshmi Cashew Industries.

Distressed cashew exporters from Kerala have petitioned the central government to stop all recovery proceedings and help with fresh working capital.
Out of the 834 registered factories, around 700 are closed for the past two to three years, according to Sasidharan Achari of Kollam-based Mahalakshmi Cashew Industries.

“Some banks have started taking possession of cashew entrepreneurs’ houses, factories and other collateral properties with a few banks having even sold collateral properties to certain Asset Recovery Companies on the pretext of SARFAESI. Two entrepreneurs recently committed suicide in Kollam and many cases of suicide attempts have been reported,” he added. India produces 6-7 million tonne raw cashew per annum and was till recently the leading supplier of kernels to the global markets.

The increasing cost of raw cashews imported from Western Africa and the higher processing charges in Kerala due to the relatively higher labor charges has compounded the problem.

“The exorbitant price of raw cashews with the entry of Vietnam and China into this sector and certain policies of our governments and lack of mechanization here paved the way for the present situation of the industry. Also, the introduction of 9.36% import duty in 2016 on raw cashew by the Central government and 36% wage hike unilaterally by the state government in 2015 augmented the downfall of the industry. Of late the import duty has been brought down to 2.5%,” Achari said.

“The 100 years old traditional industry of Kerala has been facing its worst crisis in the past four to five years, recording heavy losses and now it is on the verge of total collapse,” Nidheesh R Nair, another exporter from Kollam said.

“We are in grave crisis situation with uncertain future. In a series of meetings with the chief minister, RBI and SLBC, the SLBC agreed to extend the moratorium till 31st August 2018. We have no idea about what is in store after 31st August 2018,” Nideesh said.

Cashew Export Promotion Council of India (CEPCI) has sought an extension of the moratorium on proceeding further and initiating coercive actions by the banks against accounts declared as NPA till December this year.

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