India has stronger growth in consumption of cashew nuts as compared to the other countries of the world but the exports were decreasing dramatically for the last five years. In fact, India will be the largest market for cashew kernels due to its high usage in traditional sweets and snacks.
Following high competition from Vietnam, cashew kernel exports were declining since last years, but now expected to grow by 5%, according to a report from ICRA. Since the Indian cashew market began to decline with its share in exports, Vietnam has increased its market share of the same.
R Srinivasan, Assistant Vice President and Head, mid-corporate ratings of ICRA said that India enjoyed 27% market share having exports of 1.02 lakh in the calendar year 2012 while the share of Vietnam was 58%. He further added that India registered a marginal decline of 3% every year in the exports from calendar years 2012 to 2017, and in comparison, exports of Vietnam grew by 10% annually.
Competition from Vietnam
In the last calendar year, India’s exports were recorded at 88000 tonnes with 19% of global shares while the share of Vietnam was 74%. Talking about the needs and high output of cashew production, Srinivasan further stated that Vietnam entertains lower cost of production along with cheaper labour rates, thus proving to be more competitive in the global market. This despite Government of India reducing domestic entry of the product, keeping import duty as high as 45% on the Cashew Kernels.
Srinivasan said that irrespective of the price levels, the demand of cashew kernels is growing in domestic as well as in the global market and the same is expected to grow continuously in the upcoming years. Also, domestic consumption is expected to grow from 6% to 8% this year.