The crisis-hit cashew sector has found a much-needed respite in Directorate General of Foreign Trade (DGFT) increasing the import price of cashew and thereby blocking the inflow of whole and broken kernels to Indian ports.
The DGFT's move is expected to have a positive impact on the industry as huge shipments from countries such as Vietnam, Ivory Coast and Mozambique have been flooding the domestic market of late.
According to the notification issued by the DGFT, the import price for broken cashew has been increased to ₹680 per kg from ₹288 while for whole cashew it has gone up to ₹720 per kg from ₹400. As per this new policy, imports of the commodity is prohibited below these prices.
Long-standing demand
“Enhancing the import price was our long-standing demand and we have been trying for it for the last three years. It has offered the industry a breather, but some other aspects also need to addressed to solve the crisis,” said S. Jayamohan, chairman, Kerala State Cashew Development Corporation.
There is still no system to control the import of unpeeled product known as borma kernel. And also, the existing import duty of 2.5% should be withdrawn, he added.
According to processors, the industry has been facing a huge crisis since imported kernels started taking over the market. For the past many months small and mid-level processors were struggling to keep their business afloat as there were no takers for their product in the domestic market.
Reopening factories
“This move will definitely strengthen the cashew sector, and help the domestic industry survive. Now there will be more demand for the product and it will lead to the reopening of factories. It will also ensure employment for lakhs of women,” said Rajesh K., convener of Kerala Cashew Industry Joint Protest Council.
While the industry is quite elated at the news, some processors feel now chances are high for falsely declared shipments to reach Indian ports.
False declaration
For the past many months huge consignments of broken cashew have been reaching India with the commodity falsely declared as animal feed under Harmonized System Nomenclature (HSN) code 23063020 (residues and waste from the food industries and prepared animal fodder) evading tax.
This cashew is later reprocessed, packaged and released to the market as local product. Processors said they incurred huge losses during previous seasons due to this practice.
“We welcome the new import policy, at the same time this issue also should be addressed. The government should take stringent measures to protect the industry,” said Nizamudeen I., president, Federation of Cashew Processors and Exporters.
