<p></p><p>Cut in export incentive and high cost of imported raw nuts have hit the cashew exports this year with the shipments showing nearly 14% drop for the four months to July .</p><p>India's loss has been the gain of Vietnam, whose exports have surged 28% in the last few months, according to trade reports. Vietnam has increased its processing capacities and is buying raw cashew nuts even at high prices. <br></p> <p>For four months to July , the cashew exports stood at 31,864 tons compared with 36,850 tons in the same period a year ago. For July alone the shipments at 8,647 tons saw a fall of 15%. The slash in export incentive from 5% to 2% is said to be one principal reason for the slowdown in exports. <br></p> <p>“When the cost of processing has gone up, 2% is hardly an incentive for the exporter. As a result, the exporters are losing money while those focusing on domestic market alone are prospering,“ said Hari Krishnan R Nair, MD, Western India Cashew. <br></p> <p>In 2014-15, cashew kernel exports had set a record at 1,34,322 tons, valued at ` 5,545 crore. Runaway rise in the prices of raw cashew imported for processing has increased the cost of processing. In Kerala, around 35% increase in wages in the cashew sector has further added to the cost. <br></p> <p>The prices of raw cashew imported from Africa and Indonesia vaulted to $1,650-$1,700 a ton a few months ago before cooling to the current level of about $300$400 lower. <br></p> <p>“The raw cashew prices have increased 25% compared to a year ago while the prices of exported cashew kernels have gone up only by 10%,“ said Pankaj N Sampat, di rector of Mumbai-based Samson Traders. Vietnam has been buying aggressively , which has resulted in raw cashew prices remaining high. India has to import raw cashew for processing as the Indian production of 6-7 lakh tons are not sufficient to meet the requirement of the processing industries. <br></p> <p>According to Sampat, the export offtake is likely to increase after September, which could push up the cashew kernel prices from the present level of $3.50 a pound. <br></p> <p>Cashew processing, which used to be a monopoly of southern states, is now present in many states with the domestic consumption picking up.<br></p><p></p>