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Cashew farmers are all smiles as raw nut prices have touched Rs 102 a kg in select markets of Goa and Kerala. Traders say this is the highest ever season opening price in the history of the trade.
Around the same time last year, raw cashew nut prices had touched Rs 95 a kg and then dropped to Rs 83 a kg. The trigger for the steep spike in prices this year is short supply. In Kerala, farm gate prices are between Rs 94 and Rs 97 a kg.
“Normally, prices will be high at the beginning of the season and decline as harvesting progresses. This year, it is unlikely to see a big fall as there is a shortage of material even in Tanzania and West African markets,” said G Giridhar Prabhu, a Mangaluru-based exporter and former vice-chairman of the Cashew Export Promotion Council of India.
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The landed price of nuts from Tanzania was Rs 92 a kg this year. The crop in Tanzania was less this year, resulting in higher price for Indian importers. According to Prabhu, prices are expected to go down by at least Rs 10 a kg.
India imports around 750,000 tonnes of raw nuts every year to meet the requirements of processing units. Domestic production varies between 400,000 and 550,000 tonnes. India exports around 120,000 tonnes of cashew kernels annually.
According to Prabhu, last year’s prolonged monsoon rains, which lasted till November in many growing regions of the west coast, have delayed crop harvesting. He added the flowering as well as fruit setting in cashew orchards was delayed because of the rains and, as a result, the harvesting was yet to start in many areas. Delayed by a month, harvesting is likely to begin in April across Karnataka, Maharashtra and parts of Goa.
However, last week’s unseasonal rains in many growing regions would benefit the crop.
“The shortage of raw material is a huge problem for processing units this year because the 2014 crop is exhausted. In the past four years, the carry-over stock was left unprocessed. This year, however, due to expansion of processing units and lower crop, the industry is likely to face shortage,” Prabhu said.
He said raw nut prices have doubled in the past seven to eight years, compared to Rs 45-50 a kg in 2007-08. “In fact, prices have grown 100 times in the past 42 years. In 1972, raw cashew nut was sold at Rs 102 a quintal by farmers,” Prabhu recalled.
As a result of the rise in raw nut prices, the processed cashew nut (kernel) prices in the retail market are currently Rs 800-1,000 a kg in super markets.
