<p>Changing dynamics of the cashew crop appears to have affected the Goan cashew processing industry adversely. In the current 2019 season with prices of raw nuts fallen to Rs 118 per kg compared to average price of Rs 160 per kg in 2018, one expects the processing industry to benefit from reduced raw material cost. On the contrary, unit owners say that, the outlook is uncertain as they are still coping with carryover losses. </p><p>Processors say that, they hope to recoup in the ongoing season and are looking for raw nut prices to come down further. According to Madhav Sahakari, president, Cashew Processors Association Goa, it is difficult to determine how the year will go. “The industry is ideally looking at raw nut rate of Rs 100- Rs 105 per kg for operations to be viable and to compete in the retail market,” he says.</p> <p>Sahakari explains that, the loss made by industry in 2018 was significant. “It was not a nominal loss and several units slipped into the red. The units need to recover from last year’s setback to survive,” he says. Few cashew processing units have already shut down in the state and more closures could be in the pipeline, he fears. To top the woes is the fact that, consumption of cashew is currently subdued and demand is lackluster.</p> <p>Taking a positive view of things, AS Kamath, owner, Ajanta Industries, points out that, industry situation presently looks improved vis-à-vis the previous year as the risk factor is less. He believes that, the demand could revive. Kamath explains that, in 2018 unit owners in anticipation of lesser cashew crop started building raw material stock. However subsequently international prices came down drastically and the kernel (finished cashew) market crashed. “Processors were left with raw material purchased at high rate and huge fall in the price of finished products,” he says.</p> <p>Kamath adds that, because the industry lost money there is the problem of liquidity everywhere. “Established units can sustain themselves but new units are in a crunch,” he says. The cashew processing industry in Goa comprises about 40-odd units. Of them only five- six units are large with annual turnover above Rs 10 crore and employing more than 50 workers. The top three players are Zantye’s , Bicholim, which operates three units, Sunrise Cashew Industries, Valpoi and Ajanta Industries, Ponda.</p> <p>About 15 units are considered in the medium category while 50 per cent of the industry is made up of small units having annual turnover in the range of Rs two crore or less. The industry over the years has modernized but the investment in automation is mostly by the large and medium units. Reportedly no unit is fully automated as it is believed that automation affects the quality. Rohit Zantye, secretary, Cashew Processors Association Goa, says that, Goan processors purchase raw nuts from local wholesalers and sell the finished kernels in the market. He adds that, the supply chain includes traders as very few processors own shops and are directly present in the retail market. The CPAG estimates about 55 per cent of the kernels processed in the state sold locally and the rest going outside.</p> <p>“Goan cashews always fetched premium in the market due to their better taste and received high demand from buyers in Gujarat, Maharashtra and other states. However presently it is difficult to get premium rates due to being out priced in the market,” discloses Zantye. He points out that with Goa considered cashew hub pan-Indian players are eager to be a part of the market. “Today African raw cashew is available at Rs 70 per kg. Large quantities of imported cashew are flowing in the state. People are buying imported nuts processing it outside in states like Orissa and Andhra Pradesh and selling in Goa,” he says. The processing cost in other states is much cheaper than in Goa and local units are facing the heat of competition, says Zantye. He says that, with the retail trade largely outside the hand of local processing units the industry is being squeezed on all front. “The year 2018 was a bad. I think that 2019 will not be as bad as consumption is likely to revive,” says Zantye.</p> <p>There are only has two exporting units in the state- Zantye and Ajanta Industries, both of which have organic certification. Although cashews grown and processed in the state are virtually organic it is surprising that more units have not gone in for certification. “The cost and hassle of certification could be the reason along with the fact the units sell domestically,” says Zantye. Exports in 2018 are estimated at Rs 45 to Rs 50 crore.</p> <p>The implementation of GST has also impacted the industry. GST for plain cashews is at 5 per cent while for roasted, salted cashews the rate is 12 per cent. “The value addition is not too big for us to get high GST rate,” says Zantye.</p> <p>Goa’s cashew trail is made up of non-Goans</p> <p>Cashew and liquor are two of the best selling products of the state and both the products are gradually losing the Goan flavour. Members of CPAG say that while tourists want to purchase Goan cashews they are often being sold non-genuine products. The presence of outside nuts is rampant in the beach belt where tourists pay through their nose for Goan cashew nuts. The price differential between shops is also significant. Cashews in some shops are available at Rs 700 per kg while the rate in shops selling local produce is Rs 880 per kg. Meanwhile, in the current scenario of falling cashew prices for the processing industry, consumers have not benefitted much. At the retail level the decrease in the rate is only by about five per cent<br></p><p><b>Cashew crop expected to be normal</b></p> <p>With raw cashews still arriving in the wholesale market, the trade expects the crop to be normal. Some of the cashew trees are still flowering and farmers are hoping for conducive weather for the flowers to yield fruit. The state’s cashew production in 2017-18 was 28,012 tons which was 15 per cent higher than the 2016-17 production of 24,396 tons. In 2018-19, production is expected to be “normal” based on arrivals so far in the market. The cultivation is mainly in talukas of Sattari, Pernem, Bicholim, Bardez and Sanguem. Farmers are upset over falling prices. <br></p><p></p>