“I do not believe even our tasty golden hue cold jumbo OLE Cashew will be able to cool Kim Jong – un “
-Dr. J. Rajmohan Pillai
The cashew is a poor man’s crop but the cashew nut is a rich man’s food -a status symbol.
For the past three generations, my family has been associated with the cashew trade and has shared many ups and downs of the trade-often cyclical as described in the text. My grandfather Mr. (Vendor) Krishna Pillai was one of the founders of cashew trade in the country. He laid the foundations for the Vendor group which has grown and spread like the cashew tree into several branches which accounts for a substantial portion of the trade in the country.
Krishna Pillai’s nephew (my father) the late Mr. K. Janardhanan Pillai who piloted the family business before it started branching out was, the NUTKING for three decades 1960 to 1980. He received many achievement awards including five expert awards from the Government of India. My father also lived through the many cashew depression’ years especially in 1980’s.
My elder brother, the late Mr. Rajan Pillai, the Biscuit King and Chairman of Britannia Industries, did yeoman service in opening up Australia to cashew including cultivation, as well as in expanding the market further. His pioneering work there on cashew in close collaboration with CSIRO at his Wildman River Cashew Plantations resulted in achieving the technological advances Australia made in the field. His brand OLE was the largest selling nut-based product in more than 10 countries. He helped widen the trade base internationally to the Middle East, New Zealand, Singapore, Hongkong and Europe. And with the association of Planters (part of RJR Nabisco) made Indian cashews part of the American diet. He, along with RJR Nabisco, established Nabisco Commodities and made roasted and salted cashews a major snack food in the US.
The changes that are happening in the cashew trade in the last ten years, especially in the processing sector have been phenomenal, with the latest technology advancements in communications and also with various international trade agreements and the consequent liberalization of trade. These changes warrant a fresh outlook on trade abroad and the raw nut and kernel production at home.
My association with the KJP Research Foundation which dealt mainly with cashew plantation development and product (particularly cashew apple) utilization, as its sole financier has helped me in gaining a close insight into these fields which are. entirely new to the cashew trade.
My experience with Iracema which has the largest processing facility in the world in Fortalesa-Brazil was of great help to me in understanding the Brazilian ways of dealing with cashew and marketing. Later my work in Nabisco Commodities, which was a company headed by my brother Rajan Pillai in joint venture with Nabisco of United States which was the largest purchaser of cashews in the world, helped me in understanding better, the international cashew kernel market.
In the late 1970s and early 1980s, the largest amount of cashew nuts initially purchased by them was from my brother’s company in Singapore and the British Virgin Islands and my father was the largest processor of cashew nuts. The largest purchaser of cashew nuts was Nabisco Commodities, London of whose chairman was my brother, that is to say, there was a virtual control of the whole industry between my father and my brother.
In 1982, Russians withdrew from the market consequent to their inability to sign the trade agreement with India due to political reasons. With the fall of the market the Cashew Industry when did into a turmoil.
Many people who have controlled the cashew industry have lost money the list being endless and it proves that the cashew commodity prices could not be controlled by anybody. Cashew, like all other commodities in the world market is far too big for anybody to control.
It is in this crisis that the second generation of development happened in the cashew industry which was lead by the BETA GROUP. When the demand slumped, we provided the cashews to be use in ice creams, spreading in biscuits, deserts. Which brought back the cashew industry to greater heights. In India we worked with our then sister company Britannia Industries to produce good day cashews biscuit in India. In U.S Bournville by Cadbury, UK Bounty by Mars Incorporated, Australia Hershey Bar by Hershey company and In Middle East lion bar by Nestle. These are the some of the success stories enhancing the market of cashews worldwide.
Cashew nuts are edible kidney-shaped nuts, rich in oil and protein, and are roasted and shelled before eaten. Oil extracted from the shells is used as a lubricant, in the production of plastics. cashew, native to Brazil and part of the family of flowering plants, is a popular nut thanks to its slightly sweet flavour, satisfying crunch, buttery texture and its versatility in culinary applications. Cashew kernels have high nutritional values, being rich in proteins (18.22g/100g), fat (43.85g/100g), and iron (6.68 mg/100 g).
In the 1500s’ Portuguese colonists planted cashew seeds in the Western Ghats of India (Goa) with the sole purpose of preventing soil erosion. However, the plant adapted to the Indian soil, climate and biotic conditions and blossomed. Commercial cultivation of cashews picked up in the early 1960s and the nuts earn considerable foreign exchange for India through exports. Such is the profitability that cashew cultivation has even expanded to the Eastern Ghats of India.
The cashew harvesting season in India is normally from late February to early June. According to the Directorate of Cashewnuts & Cocoa Development (DCCD), the 2019 domestic cultivation covered approximately 1.1 million hectares that harvested around 740,000 million ton (MT) of crop. The State of Maharashtra contributed 26 percent, followed by Andhra Pradesh (22 percent), Odisha (13 percent), Karnataka (10 percent), Kerala (10 percent), Tamil Nadu (8 percent) and Goa (4 percent), with the remaining 7 percent originating from the rest of India.
Cashew nut represents one of the cheapest major sources of non-isoprenoid phenolic lipids, which have a variety of biological properties and medicinal applications and have demonstrated a potential antioxidant activity.
India imported 850,000 MT during 2019 that translates to a 53-percent share in the near 1.6 million MT of cashew inshell domestic processing industry. An ever-increasing domestic consumption of the kernel, higher dependence on imported raw material from Africa and amplified competitiveness of Vietnam has led to a sharp reduction in Indian kernel exports over the last 10 years. According to the Directorate General of Commercial Intelligence and Statistics (DGCIS) India exported only 68,000 metric tons of Kernel in 2019, which contributes to only 19 percent of the domestic processing industry; the remaining 81 percent is consumed in India.
The cashew market was valued at USD 9.9 million in 2018, and is projected to reach a value of USD 12.7 million dollars by 2024, witnessing a CAGR of 4.6%.
The Cashew Market is estimated to register a CAGR of 4.6% during the forecast period (2020-2025). Among all the cashew producing nations, African countries contributed 56.5% of the global production, while Asian countries contributed 44%, in 2018. In the last eight years, Vietnam had increased its export presence to over 85 countries. It is the largest supplier of cashew to the United States, China, Australia, Canada, and New Zealand.
Key Market Trends
Consolidation of Leadership in the Vietnam Cashew Market. Vietnam is carrying out high-density planting, commercial farming, and seed programs to ensure high yields. It also invested heavily in mechanizing the entire cashew processing to save on labour, and bring consistency and cost competitiveness. In the last eight years, Vietnam had increased its presence to over 85 countries. It is the largest supplier of cashew to the United States, China, Australia, Canada, and New Zealand.
Import-Export percentage breakup
As per the DGCIS, the port-wise percentage breakup of cashews imports in India is as following:
- Tuticorin – 50 percent
- New Mangalore – 29 percent
- Visakhapatnam – 10 percent
- Mundra – 3 percent
- Kolkata – 2 percent
- Rest of India – 6 percent
The port-wise percentage breakup of cashew exports is:
- Cochin – 46 percent
- New Mangalore – 19 percent
- Tuticorin – 15 percent
- Visakhapatnam – 15 percent
- Rest of India – 5 percent
India Raw Cashew Nut Imports (3-Year Average)
India Cashew Kernel Export (2019)
Vietnam has emerged as a big competitor for these domestic players, forcing the industry as a whole to adopt mechanization. Over the last 6-7 years, the Indian processing industry consolidated to approximately 3,000 units under operation from the earlier figure of more than 4,000 units, which was the level the industry operated around early 2010.
The Indian processing industry is highly fragmented, with different states closely vying for biggest piece of the pie. Rough estimates from Olam data show Kerala topping the processing ladder board with 20 percent market share, closely followed by Maharashtra (18%), Karnataka (16%), Tamil Nadu (12%), Andhra Pradesh (11%), Odisha (11%), West Bengal (6%), and Goa (3%) etc. More states are entering the cashew processing market with Gujarat, Bihar and Rajasthan throwing their hats in the ring.
With around 275,000 tons of cashew kernel consumption domestically, India is one of the top consumers in the world. Snacking unsurprisingly tops consumption in India with 30 percent of the share followed by Bakery & Confectionary, Sweets & savoury, HORECA, frozen desserts, all accounting for 15 percent each in the consumption pie chart. Temples, Marriages and Functions round of domestic consumption by accounting for the remaining 10 percent.