Surge in Cashew Prices

The upcoming festive season in India may become more expensive for cashew lovers, as cashew kernel and raw nut prices surge. Exporters must prepare for price changes, which could impact both domestic consumption and international demand. Crop shortages and rising global demand have created challenges for cashew producers and exporters. Several factors contribute to the price rise, especially the El Niño weather pattern affecting major producing countries. This anomaly has led to a 7% global reduction in raw cashew availability, notably in the Ivory Coast, the largest producer. The production decline makes sourcing raw cashews more difficult and expensive. India has also seen reduced production in key growing regions, adding more strain to the supply. Limited stock could lead to a 3% to 5% price rise in the coming months, with higher broken cashew prices due to strong demand in the sweet and dessert industry.

Rising Demand in India

Despite the price rise, India's cashew market continues expanding. By 2024, its value is expected to reach $2.4 billion, with projections of $2.9 billion by 2029. Cashew consumption in India grows by 7% annually, driven by the rising popularity of healthy snacks and the middle class's increasing disposable income. Demand peaks during the festive season, especially Diwali, when cashews are popular as gifts and ingredients in traditional sweets.

Supply Chain Challenges

Sources indicate raw seed prices will likely stay high due to global crop shortages. Insect damage to Indonesian cashews, now being harvested, has further reduced the global market's supply. Exporters must prepare for tight supply conditions until the next harvest season in April 2025. This supply scarcity will likely keep prices elevated, as India continues absorbing a large portion of the stock.

Promotional Activities Fueling Demand

Food companies have bolstered cashew consumption in India with promotional programs highlighting cashews and other dried fruits' health benefits. These campaigns successfully raised awareness about the nutritional value of cashews, driving demand even further. Rising prices and supply shortages present challenges, but they also create opportunities for exporters to explore new markets and segments. Healthy snacks are gaining popularity worldwide, and promoting cashews' health benefits could open growth avenues. The demand for high-quality cashews remains strong in international markets, giving exporters a chance to target premium segments.

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