Palasa cashew units to import raw nuts from Africa

Cashew manufacturers in Palasa are planning to import close to one-and-a-half lakh cashew nut bags from African countries during this season to meet the local cashew processing units'nuts requirements and to control the local cashew nut prices.

Palasa is the biggest cashew processing centre in the state with around 200 processing units and an annual turnover of between Rs 225 crore and Rs 240 crore every year.

At present, cashew manufacturers in Palasa are facing a severe scarcity of cashew nuts and nut prices have increased significantly.

At the same time, cashew kernel prices have not increased proportionately as compared with nut prices. This has made around 40 cashew processing units stop purchasing nuts for the last 10 days.

"This year, the industry is expecting a 50 per cent drop in cashew nut arrivals to Palasa due to a fall in nut production. Keeping this in mind, the farmers have started demanding higher prices for nuts and hence we are planning to import at least 25 per cent of our total nut requirements," Malla Nooka Raju, president of Palasa Cashew Manufacturers Association, told Business Standard.

Normally, nuts are available in the market between April to July and during these days only cashew manufacturers purchase the nuts and stock them.

During the initial period of last year, manufacturers paid around Rs 2,700 to Rs 2,800 per bag of nuts (each bags contains 80 kg of cashew nuts) but now because of the fall in production farmers are demanding Rs 3,300 per bag, Nooka Raju said.

He pointed out that a majority of the manufacturers were already paying these rates to farmers.

As a result of the increase in nut prices, cashew kernel movement in the Palasa market has also come down.

"Because of the increase in nut prices, we are offering export quality cashew kernels at Rs 210 per kg but traders from Kerala and Karnataka are not accepting these prices, and are ready to pay only Rs 195-200 per kg. These rates are not feasible for us and therefore traders from Kerala and Karnataka have not lifted even a single load of kernel stocks from Palasa this season," he said.

"The Palasa cashew industry requires close to six lakh bags of nuts every year and this year we expect only 3-3.5 lakh bags from the local farmers. Because of the shortage, we are planning to import around 1.5 lakh bags from African countries. Some of the Palasa traders already have import and export licences and they will import nuts by containers and if necessary they will supply the imported nuts to other local units also. The imported nuts are priced well below the prevailing local prices and it is expected that with the imported arrivals local nut prices would also come down to a certain extent," he said.