Cashew Crunch

India’s cashew industry, crippled by bad loans and high interest, stands at a precarious point

Published 2 years ago on Sep 26, 2018 Read
Official Website of Chief Minister of Kerala

Cashew factory owners have had little relief from the banks delaying the takeover of mortgaged properties. Processing units still remain shut, and the workers, unemployed. The fiasco started in 2016, when the Union government imposed import duty of 9.36% on raw cashews. Then, came the hike in international cashew prices and 70% of raw cashew is imported from African countries, followed by the Kerala government’s mandate to hike wages of cashew workers by 35%. All of this spelled disaster for the industry. Things did not look as bleak, as India was still the largest exporter of processed cashew, and banks dolled out loans to bridge the financial gap. However, inability to pay back these loans led to banks sealing production units in line with the Sarfaesi Act, causing the Cashew Exporters and Manufacturers’ Association to hold state-wide protests. This February, in a desperate attempt to restore order, the Kerala government asked banks to not take any action, till August 31. With the deadline having passed, the industry is apprehensive of banks resuming takeover of the mortgages. Till two years ago, India led cashew exports, with over 82,000 metric tonnes of cashew kernels worth Rs.52.13 billion being exported in FY17. The shutdown of this labour-intensive industry has put 300,000 skilled labourers, predominantly women, out of employment. While younger employees have moved on to rubber tapping, the older generation are struggling to adapt. The Kerala government’s move to make things right by giving a buffer period of six months and slashing import duties to 2.5% comes when the industry is already crippled, with almost no hopes of revival.