The government nods to resume operations in the cashew processing units has brought great relief to exporters who hold huge volumes of unprocessed inventory.
According to the Indian Council for the Promotion of Cashew Nuts (CEPCI), cashew processing units across the country hold around 150,000 tonnes of cashews worth 9,000 crores of croupies at different stages of transformation.
Since partially processed grains are likely to be damaged by the infestation, reopening factories to complete processing is the only remaining way to save inventory.
"In addition, changes in grain color will make it unacceptable for the export market. All of these have caused serious damage to the cashew sector. In Kerala alone, the stock of shelled cashews at various stages of processing is estimated at 17,000 tonnes at a value of 1,020 crore, "said a CEPCI official.
COVID-19 has hit the industry hard with falling shipments in the past two months, with almost zero exports in April.
“It has also helped countries like Vietnam and newcomers to the African region to capture the Indian share in a big way. The industry is afraid of the far-reaching detrimental effects in the days to come, as the foreign market, once lost, is difficult to recover. It is the relationship with foreign buyers established over the years that has been spoiled due to non-performance, "he said.
While all stakeholders in the industry welcome the decision to allow processing units to operate with 50% labor, they will have to work hard to win back the market. export lost.
Smooth sail unlikely
They point out that, although the current central government decision has brought enormous respite, navigation will not be smooth.
Due to the long exposure, core recovery rates are only expected to be 50%, resulting in heavy financial losses for the sector.
"The cashew sector was on the verge of recovering from a great financial crisis. In addition, a number of exporters had to suffer heavy losses in the booking of forward currency due to the depreciation of the rupee against the dollar, which could have been avoided if the orders to the export could be carried out, "he said.