Markets

Cashew exporters facing rough weather

Kochi: Slashing the export obligation period by half to 90 days for advance licence holders and partial withdrawal of import duty in the Union budget are not sufficient measures to restore confidence, cashew exporters said citing the steep increase in imported raw nut prices.

They said the halving of the export obligation period has put pressure on them to complete the processing and export in a short period, denying them any margins. Cutback in import duty to 2.5% from 5% will not help much either, they said, as efforts to clear imports remain the same.

The cashew harvest season in Ghana, Ivory Coast and Nigeria, which account for majority of global supply, stretches from March to August. “Most of the exporters import raw cashew during this time for processing and export for next six months. But now we have to finish it in 90 days , which is very difficult. Already disparity in the prices of raw nuts and exported kernels has led to the closure of many units in Kerala,’’ said P Somarajan, proprietor of Kailas Cashew Exports.

The raw nut prices range from $2,100 to $2,400 per tonne. India meets over 60% of cashew processing needs from import. The harvest season in East Africa is almost over and exporters are waiting for the harvest in West Africa. “Most of the exporters did not buy much from East Africa as the prices were high due to intense competition from Vietnam. They are hoping the prices would come down when the plucking begins in West Africa by March,’’ said Pankaj N Sampat, director of Samson Traders.

With the imported nut prices ruling at such a high level, exporters needed a price above $5.50 per pound for the product in the global market. But the current price levels range from $4.75 to $4.90 per pound.

The reduction in duty has not come as a relief, exporters said. “Whether it is 5% or 2.5% the procedures for import clearance are cumbersome. We had demanded total removal of the duty,’’ said Ganesh Kamath, partner of Vittal Cashew Industries.

The delay in the refund of goods and services tax paid is another problem, according to exporters. “In Kerala alone, around Rs 100 crore is due from July. This has severely affected the cash flow of companies,’’ said Somarajan.

Original Article

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