Impact of Global Price Surge

As the Diwali season approaches, Indian consumers may find that snacking on cashews becomes a costly indulgence. Global prices for cashew kernels and raw nuts are soaring due to multiple factors, including adverse weather conditions. This price surge will likely affect both local consumers and international exporters, presenting a complex challenge for the industry. Producing countries are grappling with crop shortages attributed to El Niño, causing a significant spike in prices. In India, the price of cashew kernels has surged. This dramatic increase poses a substantial impact on the cashew market as the festival demand kicks off by the end of July.

Increasing Domestic Consumption

India’s cashew consumption is growing at a compound annual growth rate (CAGR) of 7%, driven by rising disposable incomes and the increasing popularity of cashews as a healthy snack. The International Nut & Dried Fruit Council (INC) is supporting this growth through a promotional program costing 200,000 Euros annually. This initiative aims to boost the consumption of nuts and dried fruits, further escalating demand during peak seasons like Diwali. Industry sources estimate that the Indian cashew market will reach a size of $2,40 billion in 2024 and is expected to grow to $2,9 billion by 2029. This steady growth highlights the rising demand for cashews, driven by their health benefits and convenience as a snack.

Global Production Challenges

A member of the INC Board of Trustees highlights a significant drop in raw cashew production across all major growing regions. India and other major producers like Vietnam and African countries are experiencing a 25% decline in output. This reduction is expected to drive prices higher until the next harvest season, which begins in March 2025. The INC forecasts a 7% global decline in raw cashew production due to adverse weather conditions. The cashew shortage has led to strategic moves by producing countries. For instance, the Ivory Coast temporarily banned cashew exports to protect its local industries, exacerbating global price hikes. Although the ban was later revoked, the market continues to feel the impact of reduced supply.

The rising prices of cashews present both challenges and opportunities for Indian exporters. While higher prices may strain local consumers, exporters can use the global demand and steer supply chain constraints to maximize profitability.