The coronavirus outbreak in China may not have straight impacted the domestic cashew current market in India. Having said that, its impact on Vietnam’s cashew trade is a worrying element for cashew manufacturers in India.
Even though the selling prices of uncooked cashew nuts (RCNs) are coming down in the world-wide current market, the huge inventory of RCNs that Indian manufacturers purchased at higher selling prices is a bring about for issue.
Highlighting the impact of corona outbreak on Vietnam’s cashew sector, K Prakash Rao, Chairman of the Mangaluru chapter of the Confederation of Indian Sector (CII) and a cashew manufacturer, instructed BusinessLine that twenty-22 for each cent of the Vietnamese cashews had been eaten in China before the outbreak of coronavirus. This had helped Vietnam realise superior value from the Chinese current market.
Having said that, pursuing outbreak of coronavirus in China, Vietnam is now not in a posture to market cashew there, and is stranded with huge unsold cargoes.
Referring to the above condition, Walter D’Souza, previous Chairman of the Cashew Export Promotion Council of India (CEPCI) and a cashew manufacturer from Mangaluru, instructed BusinessLine that Vietnam had to find an alternate current market promptly. As a final result, it was pressured to provide down the selling prices of cashew kernels in marketplaces these types of as the US and Europe.
Stating that Vietnam is the major competitor for India in the intercontinental kernel current market, Rao stated each India and Vietnam have huge processing capacities. In simple fact, each these set alongside one another import all over 10 lakh tonnes of RCNs from nations in East and West Africa.
Even though Vietnam mostly caters to the world-wide current market, Indian cashew kernels are mainly eaten in the domestic current market, which is increasing by seven-eight for each cent year-on-year.
He stated Vietnam is now content material conference its necessity of RCNs from its have generation and from Cambodia. The selling prices of RCNs in these current market have dropped to $1,two hundred a tonne from $1,500 a tonne to compensate for the drop in the selling prices of kernels.
He stated the reduction of Vietnam’s processing capability pursuing the coronavirus outbreak in China has led to its absence from most of the West African-origin RCN marketplaces these types of as Ivory Coast, Benin, Nigeria and Ghana.
Stating that India is dependent on East African crop ― specially from Tanzania ― from September to March each individual year, Rao stated most processors in India purchased Tanzanian RCNs at all over $1,650 a tonne, and purchased superior quantities of the Ghana crop at $1,550 a tonne. These shares are now becoming delivered to get to Indian shores in March.
He stated the absence of Vietnamese obtaining has abruptly led to the drop in selling prices of RCNs by $two hundred-250 a tonne. This has caught every person unawares here.
Stating that the sentiment is incredibly very low amongst cashew manufacturers in Karnataka, Subraya Pai, president of the Karnataka Cashew Manufacturers’ Association, instructed BusinessLine that processors in the condition have imported huge quantities of RCNs from Tanzania, and also positioned orders for shipments from Ghana.
D’Souza stated most of the Indian cashew kernels from East African RCNs would have absent into the intercontinental current market in the usual program. With Vietnam bringing down selling prices, there is now greater disparity in the intercontinental current market. As a final result, these shares may not be exported from India.
Terming the domestic current market as a ‘discounted just-in-time market’, he stated if an individual needs to buy, say, 10 tonnes of cashew kernel, he would buy a few tonnes and get it replenished when needed. He stated the cashew kernel inventory in India is at a close to-all-time large at this position in time.
Have-above inventory of cashew kernels is making some quantity of stress on the procurement of RCNs, or the liquidation of kernels itself, he stated.
Prakash Rao stated that nevertheless lower selling prices of RCNs augur well for the business, the damaging sentiments on the concluded goods current market will slow down consumption to begin with in anticipation of a drop in kernel selling prices.
Stating that the confusion in the current market may slow down this sector, he stated: “We hope it will settle down quickly, the outbreak contained in the coming months and consumption in the domestic current market picks up due to lower selling prices.”