By Marcellus D’Souza

Apr 29: Unseasonal rains that have lashed parts of Goa till yesterday have dealt a blow to cashews production in Goa. Production of the seasonal fruit has dropped by 50 per cent, which is the lowest in the last 56 years.

Suresh Zantye, chief executive of Zantye Narayan Ganesh Prabhu & Co has expressed concern over the reduced in cashew production in Goa. “Cashew is a major agriculture produce of Goa and contributes significantly to Goa’s economy. Cashew production had dropped in 1966 due to unfavourable weather conditions at the time and after 56 years, a similar situation has been repeated,” he said.

“Due to a drop in cashew production, the cashew wholesale rate which was Rs 130 per kg last year has now risen to Rs 138-140 per kg. This increased rate is not feasible for cashew industries,” he added.

When contacted, Director of Agriculture Nevil Alphonso confirmed that cashew and mango production had been affected this year.
"Farmers have suffered losses and rains along with the stormy winds are responsible for this loss. Affected farmers will get compensation and they need to apply with the Zonal Agriculture Officers, who will analyse the losses,” said Alphonso.

A sharp drop in production of cashews has compelled the cashew industry to import raw cashew from other States like Kerala to meet the demand of the market and to cater to the flow of tourists.

The Cashew Export Promotional Council of India (CPECI) has forecast a 20 per cent drop in exports over the coming year. India’s cashew sector is already facing fierce competition from Vietnam and Brazil, but the industry managed to hold its own in 2008, according to CPECI, who reported cashew kernel exports had fallen only marginally from 1.15m tonnes in 2006/07 to only 1.1m tonnes in 2007/08.

As spending decreases in the country’s main export markets of Europe and the US, that may change. “Cashews are considered to be a luxury item, so it is one of the first commodities to take a hit in a situation like this”, said Zantye.

With its traditional markets falling by the wayside, India’s cashew sector is looking to develop markets closer to home in Japan, Israel and Saudi Arabia.
The domestic market is also seen as a solid fallback position for exporters – India is one of the largest raw cashew nut consuming countries.

That market may also be at risk, with imports from countries using lower-cost production methods out-price local cashews. “The import cost is much lower than buying raw nuts in India,” a cashew trader said.

“When it comes to cashews most people do not know the quality, it is the price that determines sales,” said Zantye.
Although, the Indian cashew sector is using more modern production techniques, which will likely lower the cost of domestic nuts, the unseasonal rains have played the spoiler.

“We have developed technology to increase productivity to meet the rising demand. Unfortunately this is used abroad rather than in India,” said AS Kamath, president of the Goa Cashew Manufacturers' Association.

Indian production growth has been outstripped by its competitors in recent years. In 2001 India produced 450,000 tonnes of cashews, which in 2006 grew to 573,000 tonnes. Vietnam, in comparison, went from 293,000 tonnes in 2001 to 942,000 tonnes in 2006.

India also re-exports some imported nuts, which make up the difference between exports and production from India’s roughly 300,000 cashew farmers.