CNSL is a versatile industrial raw material with diverse use in friction linings, paints and varnishes, laminating and epoxy resins, foundry chemicals and as an intermediary of chemicals.

However, despite the rise in prices, cashew nut processors are unable to meet the growing demand as there is a shortage of the product.

Though the country processes more than one million tonnes of raw cashew nut annually, the production of its shell liquid is limited, as all processing units do not produce it. Currently, 60,000 tonnes of CNSL is produced in the country as against the potential of 160,000 tonnes (about 15 per cent of the nut weight is liquid).

While Karnataka produces one-third of the total output at 20,000 tonnes per annum, Kerala, Tamil Nadu, Goa, Andhra Pradesh and Orissa contribute the rest.

Globally, Brazil is the leading producer of CNSL, which meets the entire demand of United States. Vietnam, which has started processing cashew in recent years, has also started producing this liquid.

The industry, which was ignoring this product for lack of good prices, has now suddenly woken up and is striving hard to increase production of this by-product, said G Giridhar Prabhu, former vice chairman, Cashew Export Promotion Council of India (CEPCI) and Managing Director, Achal Industries, an exporter of cashew and producer of CNSL.

The shell liquid, which is extracted out of the outer shell of the nut, also has industrial applications in the automotive industry, leather, and tobacco curing.

Recently, this has found application in the energy sector too. CNSL-based derivatives have been used as substitute for phenol.

CNSL is also used in the making of resins for paints and foundry core oils, insulating varnishes and the like.

Of late, the shell liquid has been extensively distilled to produce Cardanol, which is used in the preparation of friction dust for brake linings and also in rubber compounding formulations.

"Recently, there have been enquiries for CNSL as an energy input. CNSL has qualities replicating furnace oil. The potential as fuel gives it additional value.

"As a bio-fuel, it can compete with costlier petroleum products. This development augurs well for the cashew value chain and eventually assists the growth of large-scale cultivation in India in non-traditional areas. At the same time, traditional users will have to adjust to newer prices," Prabhu said.