May 30, 2020
Goan Cashew nut has seen its value crashed leaving farmers worried. In totality, the current 2020 year has proven to be slack as cashew season lacks flavour due to coronavirus.
Goa’s cashew trade has been greatly affected by virus infection. Presently with local processing units worried over the market prospects of finished cashew nuts, the farmers are not willing to purchase raw material to add to their inventory which will create backlog. Subsequently the nut price has crashed with the biggest buyer Goa Bagayatdar, Ponda, quoting a rate of Rs. 92 per kg from Rs. 105 per kg, recently.
Since the beginning of the season, cashew nut price has come down to over 30 per cent, from Rs. 136 per kg to the current price of Rs. 92 per kg. It is further anticipated that if this situation continues then it is likely that price might fall still further.
According to players of Goa’s cashew industry, the ongoing cashew season that has reached an end has been a tough one for everybody. For the first time cashew price dropped below the minimum support price (MSP) of Rs. 100. In return the government had to step in and offer a higher MSP of Rs. 25 per kg above the advised price of Rs. 105 per kg.
“Farmers are unhappy because in the 2019 season they earned satisfactorily while in the present season they have to depend on the government’s MSP. Even the MSP is no solution because it delays money at the hands of the farmer. Instead of receiving cash on hand at the time of selling they have to wait until the government goes through their application and clears the bill,” says Ulhas Umarye, managing director, Goa Bagayatdar.
He added, “The fall in cashew price is because of market forces as demand is poor from the processing industry. On the whole lockdown is hit the cashew industry,” said Umarye. At the same time operations of the processing industry is greatly disturbed and they are worried about the future of the industry and survival.
“Most processing units have stocks of finished cashews on hand. It cannot be sent to Mumbai or other consuming markets and they are not accepting cashews. The outside wholesale markets are closed and the Goan market is shrunk due to the absence of tourists,” says Rohit Zantye, secretary, Cashew Processors Association Goa.
According to Zantye, the cashew processing industry is risking buying cashews from farmers. “At least the farmers are getting support from the government. For us the local market is in doldrums. Tourism revival looks far way. With no demand from weddings, hotels, etc… we only have to look at the export market. In exports too there is uncertainty,” he claimed.
Cashew processor A.S. Kamath, owner, Ajanta Industries, Ponda, viewed that, the industry is facing an overload of problems. “Our operations are affected due to the lockdown. The domestic market is down and on the export from no fresh orders are forthcoming. Overseas buyers have stalled payments. The payments from them are nil. Our cash flow is hit. It is difficult to meet the mandatory expenses. In the last 35 years I have never come across such as situation as caused by the lockdown.”
According to members of the cashew industry, consumer behavior has changed and people are not eating as much cashews as before. They prefer to buy almonds instead. “In super markets cashews are not getting sold as much as almonds,” says Zantye,
He emphasized that Maharashtra and other states the cashew manufacturing industry prefers to keep factories closed instead of taking the risk of buying raw nuts. He explains that cashew market in the state is heavily dependent on tourist purchases. Further, about 30 per cent of the nuts processed are in broken pieces which fetches very low price and there is practically no local market for it. The market of broken cashew has crashed and bulk of broken pieces are sold to mithai walas who anticipate low sales due to fewer or no weddings in 2020,” pointed Zantye.
The cashew processing industry in Goa embraces about 40-odd such units. Of them only five to six units are large scale with annual turnover above Rs. 10 crore and employing more than 50 workers. About 15 units are considered in the medium category while majority of the industry is made up of small units having annual turnover in the range of Rs. 2 crore or lesser.
Though the industry has modernized in recent years, the investment in automation is mostly limited to large and medium scale units.
Competition from imports of raw nuts from abroad is beating down the price of in-house cashew in Goa. The state also has the problem of unprincipled retailers who are getting kernels from outside and selling to domestic stores.
Meanwhile the state’s cashew production in 2018-19, decreased slightly to 27,588 tons from 28,012 tons in 2017-18. Overall trend in local production is stagnant. The crop growing is mainly in the talukas of Sattari, Bicholim, Bardez, Pednem and Sanguem. The cashew season in Goa extends from March- May or until the arrival of the monsoon.
“Cashew is a hardy crop. But production is falling in the state as plantations are being razed by fires,” remarked Umarye.