Global Shortages and Price Adjustments Shape Market

The cashew business is set for significant profitability due to a severe shortage of raw materials internationally, which has raised import costs. Additionally, domestic production has fallen by 22 percent below normal levels. These conditions are creating a favorable environment for high future profits at current prices.

According to the latest survey report, adverse weather has reduced cashew kernel production in Tanzania. Consequently, the current import price has pushed up the cost of prepared whole cashew nuts in North India by approximately $1,68-$1,74 per kg. After importing, manufacturing companies in South India process these kernels in sheller plants located in the Kilon, Kolam line.

Cost Implications and Local Market Responses

Traders note that Cashew No. 240, currently sold here at about $8,70-$9,00 per kg, costs $1,20-$1,44 more to prepare the kernels. Similarly, Cashew No. 180 of average quality, sells for $10,80 per kg. But the preparation costs rise to $12,00-$12,24 in Delhi. This cost escalation reflects broader industry challenges.

Impact of Weather and Reduced Yields

This year, both Orissa and South India have reported lower yields of cashew kernels, primarily due to adverse weather and frequent storms. There is reduced availability of small-grained cashews, which were typically sourced locally. It has led producers and traders in various states to begin holding back their stocks in anticipation of future gains.

Long-Term Outlook and Strategic Considerations

Given the current market conditions, the cashew trade is anticipated to yield substantial benefits in the long run. The ongoing global supply constraints and domestic production declines highlight the critical need for strategic planning. And market adaptation to capitalize on potential profit opportunities in the future.