KOLKATA, India, Oct. 15 (Xinhua)-- A heavy inflow of under- invoiced processed cashew kernels from Vietnam and Brazil has hit the chances of Indian cashew processor-exporters to capitalize on the domestic festival demand, an exporter said Monday.
Hit by a downturn in shipments, the exporters are banking on the domestic market to stay afloat. Last year, cashew exports hit an all-time high of over 4,390 million rupees (79.8 million U.S. dollars). As overseas cashew traders under-invoice the goods to evade Indian import duty of 35 percent, it results in heavy revenue loss for the government.
The demand for cashew kernels rises by September but this time, domestic processors have been experiencing a slump in orders. " When our cashew kernels in the broken grade are sold for 300 to 325 rupees (5.45 to 5.9 U.S. dollars) per kg, the imported kernels are cheaper by 50 to 70 rupees per kg in the wholesale market," said P Somarajan, proprietor of Kailas Cashew Exports. With exports facing a slowdown, the processor exporters are relying on the domestic market to shore up the earnings.
"We sell no less than 30 percent of our production in the Indian market. The broken grades of cashew have a great demand here and are not generally bought by foreign clients," said A Abdul Salam, general secretary of Cashew Manufacturers and Exporters Association.
Sasi Varma said considerable quantities of cashew kernels are being imported into India under the guise of cattle and poultry feed causing a further loss in government revenues.
The processor exporters in Vietnam and other countries are able to export at a lower price because of the subsidies, tax exemption and cheap labour available there. These countries were once the suppliers of raw cashew nuts but have now become processors of the commodity and are eating into the export share of India.
Now, they have found a ready market for broken grade cashews in India and are bent on taking advantage of it.
Meanwhile, cashew exports, which showed a drop of around 2,700 tonne till July with a marginal fall in revenue, have slid significantly in the subsequent months, said the exporters.
"Even for a low rate of 3.10 U.S. dollars per pound, there are no buyers," Somarajan said.
October 15, 2012
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