The 100-year-old Indian cashew industry is in an interesting phase – much to look back on, facing a challenging situation and at the same time, much to look forward to.
In the last three decades, there have been lot of changes in the cashew industry – in India and globally.
Last decade of the 20th century saw Vietnam emerging as the second-largest grower as well as processor and kernel exporter. In the 21st century, RCN (raw cashew nut) production in Vietnam has remained stagnant but processing has grown very fast.
During the last decade, Vietnam has been the front runner in mechanisation of processing. Now, Vietnam is neck to neck with India in processing but is by far the largest exporter of kernels – about four times what India exports. This development was a game changer.
The 21st century has seen impressive growth in production of RCN in West Africa led by a huge increase in Ivory Coast and reasonable growth in other countries. As a country, Ivory Coast is probably the biggest producer (approximately 750-800,000) with all West African countries accounting for close to 50% of the world production of approximately 3.5 million tonne).
Another change has been the dependence on Africa for RCN. In the 20th century, India’s RCN imports were less than domestic production – now, RCN imports at 1.00-1.20 million tonne are about 40-50% more than domestic production of 700-750,000.
On the consumption side also, there have been many changes. The big change being market share.
For most of 20th century, the Western world was consuming over 2/3 of the world production of kernels (with India consuming less than 10%). Today, USA and Europe together consume about 1/3 of world production. India consumes another 1/3. Most of the balance 1/3 is also consumed in Asia.
Another change has been the dependence on Africa for RCN. In the 20th century, India’s RCN imports were less than domestic production – now, RCN imports at 1.00-1.20 million tonne are about 40-50% more than domestic production of 700-750,000.
In the short term, supply does not seem to be a problem, especially with the 2018 crop surplus. The spontaneous growth in production that we have seen in West Africa in the last two decades cannot continue much longer. Production in Asia has been stagnant for many years. Production from older trees (in all origins) will reduce.
The Indian cashew industry is the oldest in the world. It has multiple advantages – long experience, good product quality, good image as long-term supply partners.
The future is bright – the prospects are tremendous – sky is the limit (not for price, but for growth).