Cashew exporters eyeing thriving China market

  • 21-May-2019
  • Cashew exporters eyeing thriving China market

Indian cashew exporters are now looking at China in a big way, thanks to changing food habits and rising consumption of cashew among the affluent population there.

However, the current import duty of 10 per cent on cashew kernels is a limiting factor for them to penetrate the Chinese market. At the same time, cashew kernels from Vietnam attract no duty. India's direct exports to China is very negligible at present. The Cashew Export Promotion Council of India (CEPCI) has requested the central government to take up the matter with China for reducing the import duty so that India can successfully compete with Vietnam and Cambodia, which enjoy tariff concessions and free border trade.

S Kannan, secretary, CEPCI, said the estimated Chinese imports of cashew kernel is around 55,000 tonnes and India’s share in it is minimal, hardly one per cent. However, in recent months, exports are growing at a faster pace. CEPCI has approached the Commerce Ministry to include Indian cashew kernel to qualify for tariff concessions .

The growing market potential, India’s negligible share in imports, excess processing capacity and rural employment generation are a few contributing factors to include cashew kernel to qualify for tariff concessions. Along with cashew kernels, he said, cashew nut shell liquid which is currently exported to China for industrial applications/paint industries is also eligible for inclusion in the items of duty-free import by China.

There are about 5,000 processing units in India with an annual capacity of around 30 lakh tonnes. Given the employment potential and traditional processing capabilities, the industry is utilising only about 7.5 lakh tonnes of raw cashew nuts produced domestically and also importing 8-9 lakh tonnes for processing. With this total raw nuts availability, the sector is in a position to meet only about 55-60 per cent of its processing capacity, Kannan said.

However, sources in the trade pointed out that India’s cashew exports have come down drastically during April, 2018-January, 2019, to 55,272 tonnes, valued at ?3,731 crore. The figure during the corresponding period of the previous year was 73,810 tonnes, valued at ?5,131 crore.

The competition from Vietnam has already impacted Indian cashew exports to the US, which was a major market till 2013-14. The cashew shipments to the US has now dwindled to 40 per cent as lower production cost is benefiting Vietnam.

The UAE, has now emerged as the single largest market for Indian cashew with 18,000 tonnes in 2017-18. However, this number is expected to come down in 2018-19 due to non- availability of cashew following the closure of more than 50 per cent of the processing units due to financial stress. Indian cashew also caters to Saudi Arabia, the Netherlands, Japan and Germany.

Indian cashew commands a premium position abroad on account of its quality. To celebrate the 100th year of Indian cashew exports, CEPCI is launching a logo for Indian cashew to garner a sizeable share in the growing overseas markets.

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