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STUDY ON PBOBLEMS FACED BY CASHEW

EXPORTERS FROM INDIA

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CHAPTER - 1

INTRODUCTION

1.1 INTRODUCTION

Cashew is a tropical evergreen tree known for its seed worldwide. It flowers once a
year between the month of November and January. The sweet flavored nutriest feature of
cashew nut like seeds are obtained from the bottom of the false fruit of this tree, which is
termed as cashew apples. The Cashew nut can be seen sitting smugly under the soft belly
of the cashew' apple. Cashew seed is the food product. It is placed third among the largest
consumed tree nuts in the world. The commercial production of cashew seed is done in
more than 32 countries of the world, mostly in hot and dry agro climatic conditions
suitable for cashew cultivations. Now it has become the number one crop in the world.

Cashew was introduced in Goa by Portuguese during 16th century. Today this
crop is one of the major cash crops of Goa covering an area of 512000 hector. Since its
introduction, cashew has very well adapted to Indian climatic condition and it is grown in
the east and west coastal region of India. Later it spread as popular crop to other part of
India.

Common names of the cashews and its products are cashu, caju, acaju, acajou,
anacarde, cacajuil, pomme, Maranon, jocote Maranon, merey, jambu, cashew apple,
cashew nut and cashew kernel etc. In Mozambique, the maconde tride refer to it as the
“Devil Nut”. It is offered at wedding ceremonies as a token of fertility and is considered
by many to have aphrodisiac properties.

The cashew plantation is mainly to control soil erosion and to increase forest
cover. It also helps to reduce the effects of cyclone and tidal waves. The cashew is mainly
considered as a employment provider to socially and economically backward communities
.The cashew plantation helps to utilize the vast stretches of vast land in the country.
Besides earning more foreign exchange, they facilitate economic growth.

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1.2 1.2 STATEMENT OF THE PROBLEM
Cashew industry is the one of the foreign exchange earning source in India. Now
the cashew exporters face lots of problems like tax problems, competition, shortage of raw
cashew nut, fluctuations in exchange rate and trade dispute.

1.3 SCOPE OF THE STUDY

India is the largest producer, processor and exporter of cashews in the world. In
India, cashew export accounting into 60% of world’s total market. Compared to previous
year export performance there is a decrease in volume of export in the current year. The
cashew industry faces lots of problems. So the study was undertaken to know about the
problems faced by cashew exporters.

1.4 1.4 OBJECTIVES OF THE STUDY


 To examine the problems faced by cashew exporters from Kerala .
 To study the overall performance of the cashew industry in Kerala.
 To assess the growth of cashew export from Kerala.
 To understand the year wise and country wise export from Kerala.
 To suggest suitable recommendation for improving the performance of the industry.

1.7 LIMITATION OF THE STUDY

 The Sample size was limits.

1.8 CHAPTERISATION:-

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CHAPTER I: Introduction, Scope of the study, Need for the study,
Objectives of the study, Research methodology, Data
Collection, Limitations of the study.

CHAPTER II: Review of Literature

CHAPTER III: Indian Cashew Industry, special reference at Kerala.


Cashew Products, Cashew Export Promotion Council of
India, Cashew and its Importance, Major problems faced by
cashew exporters

CHAPTER IV: Data analysis & interpretation

CHAPTER V: Findings & Suggestions


Conclusion
Bibliography
Appendix

COMPANY PROFILE
The Kailas Cashew Exports is registered member of the Cashew Export Promotion
Council of India. Kailas Cashew established in the year 1995 the founder being Mr. P.
Somarajan, a first generation industrialist in the cashew sector. Ministry of commerce
government of India recognized Kailas cashew exports as star export house of cashew
kernels.

Management
Mr.P. Somarajan is a youngster hailing from a respectable family. He had the rarest
opportunity to get exposed to cashew industry at a very young age. He is very conversant

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in all aspect of the cashew industry, right from procurement of raw cashew nut, processing
and marketing. And best testimony of it is the fast and phenomenon growth of the
organization in a short span of seven-eight years from a humble beginning.

Today, Kailas Cashew Exports is a two star export house having processing units spread at
different places in Kerala. Our experienced team with more than five hundred dedicated
employees. Our well equipped processing centers own various certifications including for
quality. We are prepared to meet any demand from anywhere in the world at short notice

Our Bankers
We bank with Punjab National Bank, Main Branch, Kollam. Kerala. South India.
Cashew Processors, Exporters & Importers
Pezhookonam,Cheerankavu,
Kollam - 691 505, Kerala, India
kailascashew@yahoo.com, nilacashews@gmail.com, kailascashews@gmail.com
Ph : 0474 2482585, 2483843
Fax : 04742482705
Credentials & Affiliations
Our Credentials
We are Two Star Export House recognized by the Government of India. We hold various
recognitions and accreditations stands testimony of our credibility and reliability

Our Accreditations
We are holder of quality management systems certification according to ISO
22000:2005 FSMS Certified
ISO 22000:2005 FSMS , BRC, Kosher & Hallal certified
In recognition of the organization as a leading exporter of the organization is also a
registered member of the Cashew
Export Promotion Council of India)
Member Federation Of Indian Exporters Organization
Member of AFI (Association Of Food Industry), and also the FDA, U S A (Food And
Drug Administration)

CHAPTER - II

REVIEW OF LITERATURE

Dependence on Import of raw cashew nut increases (Business Line – April 5,


2015)

India's dependence on overseas sources for the raw material has become a perpetual
phenomenon and is growing year after year.

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The processing capacity of the industry is claimed to be around 12 lack tones a year.
Exports have not been showing any increase in the past couple of years. Exploiting the
growing domestic demand of cashew, a good quantity of kernels processed from the
imported RCN is sold at higher prices in the domestic market. The price is almost double
that of those in overseas outlets.

Overseas consumers are provided good cashew kernels cheap at the expense of the
domestic customers. Imports of huge quantities of raw nuts often deprive the growers in
the country of good prices, which makes the crop unattractive.

Increasing the indigenous production is the only solution to this problem and that
appears to be possible only through scientific and systematic methods to bring more areas
under the crop, apart from growing high yielding varieties. For achieving this target, there
should have to be an establishment like the Commodity Boards for Rubber, says Dr Abdul
Salam, an expert on cashew and a senior faculty with the Kerala Agricultural University.

Import of Raw Cashew Nuts to Continue ( Business Line – April 6, 2010)

During April-February 2009-10, import of RCN stood at 7,26,095 tones against


5,89,299 tones during corresponding period of previous year while domestic production
remained almost stagnant at around 6.5 lack tones for last few years.

Riding on strong domestic demand growth, stagnant domestic production and


lackluster export - import of cashew nuts is growing at steady pace. While processing
capacity of the industry is estimated to be around 12 lack tones a year, stagnant production
of around 6.5 lack tones is encouraging traders to import raw cashew nuts, get these
processed and sell at much higher price.

Realizing the importance of this cash crop, the Central Planning Commission had
approved the setting up of a Board for cashew. Also, considering the importance of cashew
as a major employment provider to the rural poor and utilization of vast stretches of waste
lands in the country, a Committee of Ministers have agreed to set up a cashew
development board aimed at achieving self-sufficiency in production, taking research
findings to the farmers' field and improving quality of products, processing, marketing and
exports.

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Stiff competition from others suppliers ( Business Line – April 23, 2010 )

Cashew exports from the country during 2014-15declined 1.3 per cent in volume
and 2.8 per cent in value on stiff competition from other suppliers in the world market.

During the last five years, exports declined 10.5 per cent and Vietnam took
advantage of it. Its export increased 67 per cent during this period and is now claiming to
export 50 per cent more than India.

The rupee's appreciation against the dollar has also contributed to the declining
trend. During this period, the rupee appreciated against the dollar by over 14 per cent.

Next was the global recession, which had a severe impact on the cashew industry
with demand from the US and Europe dropping. Consequently, the prices and volume of
sales fell in the international market.

The costs of raw cashew nuts and processing had gone up. Even though the
Government announced that service tax exemption would be granted for export activities,
cashew exporters are being levied service tax for transport of goods from farm/port to
factory and from factory to port, commission paid to foreign agents, etc. All these have
added to the cost of production. At the same time inadequate availability of domestic raw
nuts has forced the industry to depend on imports,

The domestic production is around 7 lack tones while our processing capacity is
about 14 lack tones. Hence, Vietnam is also competing with our processors for sourcing
raw cashew nut from African producing countries, resulting in increase in raw cashew
prices. The rupee is strengthening and the effects of recession and financial crunch are
continuing.

Business Line Sep 22, 2010

Fuelled by the shortage of domestic cashew crop, lower supply from the world
market, and a considerable growth in domestic consumption, cashew kernels in the
domestic market have been witnessing all-time high prices for the past 10 days.

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About 40 per cent of the Indian crop had been affected due to inclement weather in
April and May. World supply also is lower due to poor crops in West Africa.

Mr. K. Prakash Rao, former President of Karnataka Cashew Manufacturers'


Association, said there has been a drop in processing capacity in all the processing centers
by about 20 per cent. Added to this, the internal market has grown by 15-20 per cent. This
net gap of around 40 per cent has resulted in a steep price increase.

To a query on North Indian demand for the commodity, Mr. DSouza quoted the
example of Delhi and said the Government there had imposed a VAT of 12.5 per cent in
the budget. The VAT was cut to five per cent in July-end.

Cashew industry seeks Endosulfan ban ( Business Line -Nov 13.2010)

The Kollam-based cashew processing industry has sought a ban on


Endosulfan.Cashew entrepreneurs said the industry did not need raw nuts from plantations
that use Endosulfan. The use of such nuts would only serve to harm the industry,
especially in the export markets.

They said the global production of raw cashew touched 20 lack tones. India
produces about 6 lack tones of raw nuts. The country processes more than 12 lack tones of
raw cashew out of which about 6.5 lack tones to 7 lack tones were processed by the
Kollam-based industries and the bulk of these were imported.

Endosulfans were a negligible quantity which the industry did not require. For that
matter, the industry was averse to process nuts from plantations that used not only
Endosulfan but also any other chemical pesticide. The industry sought to ban the use of
Endosulfan and other chemical pesticides not only from plantations close to human
habitations like Kasaragod but also in plantations that were far away from human
dwellings.

At a time when the global markets were insisting on organic agro-based products,
processing nuts grown through the use of toxic chemical pesticides would only serve to
harm exports from Kollam. In fact, the major quantity of the raw nut requirement for
Kollam was met through imports, mainly from African countries.

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More than four tones of raw cashew nuts are required to produce one tone of cashew
kernels. ( Business Line – Jan 3, 2011)

India has the world's largest capacity in cashew processing. The organized sector
has an annual capacity to process 14 lack tones of raw nuts. India's indigenous production
of raw material is estimated at about 6-7 it is far short of the installed processing capacity.
Annual import of raw cashew, mostly African origin, has shown a rising trend.

More than four tones of raw cashew nuts are required to produce one tone of
cashew kernels. Interestingly, India was the first country to tap the export.

Raw cashew imports serve many purposes including bringing down the deficit in
domestic production and helping meet raw material needs of the processing units.
Importantly, imports ensure employment to a large number of cashew factory workers. The
cashew sector provides employment to estimated three lacks persons.

Many are vulnerable to weather aberrations. Rising domestic demand also squeezes
export availability. India is a classic example. So, priorities for the processing industry
include exploring backward integration and strengthening the supply chain management. It
is necessary to adopt good manufacturing practices.

The demand side whether domestic or export is expected to continue to be robust;


but given the premium nature of the product, consistent supply of top quality is the key to
success. The Government implements various schemes to promote quality improvement,
export promotion and so on.

Lack of Demand keeps cashew price low (Business Line – Jan 11, 2011)

Cashew prices have maintained their weak trend despite poor global supplies
because of subdued demand from consumers. Traders, however, feel that prices won't stay
weak for long as Indian production is expected to be less, while cashew crop in Ivory
Coast another big producer is also expected to be less due to bad weather. As per market
sources, cashew market continued to be quiet. Uncertainty in demand has made buyers
wary as well. They do not want to be carrying long positions at prices which are the

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highest ever and then see a dramatic drop in demand. As per cashew processors, raw
materials prices are very high and not viable for processors.

Indian cashew production, which accounts for more than a fifth of the global
production, is projected to come down in 2010-11 due to unseasonal rains and erratic
temperature in the producing region, officials from the Kochi-based Directorate of Cashew
and Cocoa Development (DACCD) said. The cashew crop in 2011 is likely to be delayed
by more than a month due to slower and fewer flowering, as per Venkatesh Hubballi,
director of DACCD.

Asian markets emerging major cashew consumers ( Business Line-Jan18,2011)

Indian and Asian markets have, of late, become major consumers of cashew
kernels, absorbing large quantities even as consumption in traditional markets remain
largely flat, making Asia a deciding factor of prices. India has been the largest consumer of
cashew for some years, consumption in other Asian countries has also been growing fast
whereas consumption in traditional markets has been flats or showing small growth in
some segments.

Asian markets are a spot market where price changes are passed on to final
consumer almost immediately. Impact of this change has been felt only in the last year.
The buying prices have to be dependent on the Asian spot market prices. This has changed
the structure of cashew market and dynamics of price movement. Large processors are not
willing to reduce their prices due to uncertainty over RCN crops and prices. .

CHAPTER – III

2.1 INDIAN CASHEW INDUSTRY

India is the largest producer, processor, exporter, and the second largest
Consumer of cashew kernels in the world. Cashew ranks second in agriculture and
horticulture commodities exported from India. The country is earning 25,000 Cores
through the export of cashew kernels yearly. Over 65 per cent of the world
cashew kernels are accounted by India. Today, India dominates the world cashew market.

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Over 685,000 hectares are under cashew cultivation here. With an average annual export
worth US$ 564 million, India meets two third of world demand for cashew. USA is the
largest buyer of Indian cashews. It is developed only in 20th
Century.
Indian cashews are consumed in as many as 60 countries all over the world, the
major markets being the United States, the United Kingdom, Japan, Netherlands,
Australia, Canada, Germany Hong Kong, Singapore, New Zealand and Middle East
countries. Vietnam is the largest producer of raw cashew followed by India and Brazil.
India dominates and leads the cashew kernel production list.
There are 32 countries successfully cultivate cashews. Among these Vietnam,
India and Brazil are the top three producers and processor of cashews. Cashew Kernels are
facing stiff competition from other edible nuts like almonds, walnuts, pistachios,
macadamia nuts and hazel nuts. India also facing competition from Vietnam and Brazil.
India has 24 per cent of the global area under cashew but contributes only 19 per
cent of global production of global production. Whereas, Vietnam with 10 percent of the
global area contributes an average yield of 2.8 tone per hectare as against India’s around
800 kg.
India was the first country started to exporting manually processed cashew nut.
These processing Operations were performed by experienced skilled workers. In general
Indian processing system involves lower investment and variable costs and achieves far
efficiency in terms of kernel. However this system requires large number of experienced
workers who work at unhealthy level of exposure to CNSL. Thus cashew has the potential
to increase the income of poor producers. To create employment opportunities during
harvesting and processing and to increase exports.

2.1.1 DOMESTIC PRODUCTION OF RAW CASHEW NUT:-

India has always been a major player in the production of cashew. It is the
largest producer of raw cashew in the world. The major states in India in which cashew has
been cultivated are

 Kerala
 Karnataka

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 Goa

 Maharashtra

 Tamil Nadu

 Andhra Pradesh

 Orissa

 West Bengal

The production of cashew in India has been fluctuating during the recent years.
In India, Maharashtra produces more cashews compared to other states. Poor qualities of
cashews are grown in some states, which is due to the wrong harvesting techniques.
Maharashtra produces 31% of total production from India. Kerala has been standing at
fourth position. They produce 11% of total production. According to the estimates by the
Directorate of Cashew nut & Coco Development, the production of raw cashew nuts in
India during 2014-2015 was 6,13,000 M.T. as against the estimate production of 6,95,000
M.T. during 2008-2009. The raw cashew nut requirement of cashew processing industry in
India is estimated to be over 12 lacks M.T. per annum and the availability is about half of
this. The balance is met by import from other producing countries. The Govt. is taking in
this direction by promoting replantation, expansion of new cultivation etc. The Kerala
Govt. has set up a special agency (Kerala state agency for cashew cultivation) for
promoting cashew cultivation.
The major trading canters in India are:
 Palasa
 Cochin
 Quilon
 Mangalore
 Kollam
The Government has contemplated various developmental measures to attain self-
sufficiency in the production of raw cashew nuts in the States. The Directorate of Cashew-
nut & Cocoa Development (DCCD), Ministry of Agriculture has implemented the
measures under National Horticulture Mission and in the North - Eastern States under
Technology Mission. New plantation development and replanting of old senile and
uneconomical cashew gardens with high yielding varieties are the major activities of the

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States for increasing production of cashew with supporting programmers like
establishment of nurseries, frontline technology demonstrations, popularizing utilization of
cashew apple, publicity for the promotion of crop, pest and disease management, human
resources development, promotion of integrated nutrition management.

A scheme on up-gradation of existing old cashew processing units in India has been
sanctioned under National Horticulture Mission (NHM) to be executed in the states of
West Bengal, Orissa, Andhra Pradesh, and Tamil Nadu at a total cost of Rs.56.00 lacks
during the year 2010-11. Recently, the Govt. has received a request for financial assistance
for International brand building & new market development in Russia and China from the
Kerala State Cashew Development Corporation Ltd.

2.1.2 IMPORT OF RAW CASHEW NUT:-


Due to the wrong harvesting technique and aging of cashew tree adversely
affect the domestic production. Now India’s domestic production is around 7 lakh tones
while their processing capacity is about 14 lakh tones. Hence India has to depend on
imported raw cashew nut for more than half of the requirement. Four tones of raw cashew
nut need to be processed for producing one tone of cashew kernels. India mainly imports
raw cashew nuts from African countries like Ivory Coast, Guinea Bissau, Tanzania,
Indonesia, Ghana, Nigeria and Mozambique.
There is a rise in imports of raw nuts which had gone up by 24.26 per cent in
2014-15from the previous fiscal. India imported 7, 52,854 tones of raw nuts valued at Rs
3,037.35 core in 2014-15as against 6, 05,850 tones valued at Rs 2,632.41 core in 2008-09.
The unit import price for raw cashew nut was Rs. 40.34/ kg. During 2014-15as against Rs.
43.45/kg during the previous year. The import value increased by 15.38 percent while the
unit import price by 7.71 per cent.

2.1.3 EXPORT PERFORMANCE:-


From India, cashew kernels and cashew nut shell liquid/ cardanol are mainly
exported to different countries of the world. Compared to the previous year export
performance of India there is a fall in during 2014-2015, due the global recession.

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As per the export- import statistics published by DGCI&S, Kolkata, the share
of agricultural products in the total export earnings of the country during 2014-15was
5.56% and cashew kernels ranked seventh among contributing 5.59%.
The total export of cashew kernels from India during 2014-15was1,08,120 M.T
valued at Rs. 2905.82 cores (US$ 613 Million).It showed a decrease in comparison with
the export of 1,09,522 M.T. cashew kernel valued at Rs. 2988.40 corers (US $ 650
Million) during 2008-2009. There is a 1.28% decrease in quantity.
The unit price of cashew kernels was 268.76 per Kg. compared to Rs. 272.86per
kg during 2008-2009 recording a decrease of 1.5%.
The export of Cashew nut Shell Liquid (CNSL) from India during 2014-2015 was
9,748M.T valued at 24.12 corers (US$ 5.08 million). It showed a increase in comparison
to the export of 9,099 M.T. of cashew nut shell liquid valued at 26.06 corers (US $ 5.67
Million) during 2008-2009. There is a 7.13% increase
The unit price of CNSL/ Cardanol during 2014-15was 24.74 per Kg. compared to
Rs. 28.64 per kg during 2008-2009 recording a decrease of 13.62%.USA, UAE,
Netherland and Japan continued to be the major buyer. Export to American Zone was 29%,
European Zone 30%, West Asia and Africa 29%, South
East and Far East Zone 10% and oceanic zone 2%.
During the last five years, exports declined 10.5 per cent and Vietnam took
advantage of it. Its export increased 67 per cent during this period and is now claiming to
export 50 per cent more than India.

2.1.4 TRANSPORTATION:-
There are regular shipping facilities from India to all ports of the world. Major
shipments from India take place through Cochin port. Other ports are Tuticorin,
Mangalore, Madras and Bombay. Regular services of container ships are available from
Indian ports on India-USA, India-UK/Continent, India-Australia, India-Japan, India-
Middle East and India-Singapore route.
For India the cashew industry has economic and social significance as the
Industry earns valuable foreign exchange for the country and also provides employment to
lacks of people. In cashew processing factories, over 95% of the workers are women from
lower strata of the society, mainly belonging to socially and economically back ward

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communities. Thus the industry has to play a leading role in social and financial upliftment
of the rural poor.
2.2 CASHEW PRODUCTS

Three main cashew products are traded on international market:- raw cashew
nut, cashew kernels, cashew nut shell liquid (CNSL) . A fourth product, the cashew apple
is generally processed and consumed locally. But now cardanol could be exported. The
cardanol continued to be in the list of items under Minor Forest Produce.

2.2.1 RAW CASHEW NUT:-

The raw cashew nut is the main commercial product of the cashew tree, though
yield of cashew apple are 8 to 10 times the weight of the raw cashew nut. It is attached to
the lower portion of the cashew apple. The Cashew nut can be seen sitting smugly under
the soft belly of the cashew' apple. Raw cashew nut are either exported or processed prior
to export. Processing of raw nuts releases the by product CNSL that has industrial and
medical applications. The skin of nut to high in tannins and can be recovered and used in
the tanning of hides. The fruit of cashew tree that can be made into a juice with a high
Vitamin C contents and fermented to give a high proof spirit,

2.2.2 CASHEW KERNELS:-

They are obtained through the processing of raw cashew nut. It is estimated that
60% of cashew kernels are consumed in the form of snacks, remaining 40% are included
in confectionary. India is the largest producer and exporter of cashew kernels in the world
over 65% of world export of cashew kernels is accounted by India.

Cashew Kernel intact from the shell and grading them carefully to
superior standards required by top food companies all over the world. The un-shelled nut
is steamed to soften the shell and carefully cut open. The kernel is dried to loosen the skin
which is then peeled off. Whole kernels are graded by size and color. Pieces are chopped
into required sizes.

The consumers are interested in quality and health aspects of foods. One major
factor affects the consumption of cashew kernels in world market is competition from
other tree nuts.

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Specifications:-

Standard specification for Indian cashew kernels for export has laid down by the
government of India under Export (quality control and inspection) Act 1963.

Grades:-

Cashew Kernels are graded into white/scorched wholes, pieces, splits, butts etc.
depending on the shape, size & colour of the kernel. The Govt. of India Act prescribes 33
different grades of cashew kernels. Only 26 grades are commercially available and
exported. They are:

W - 180, is the ' King of Cashew ' - They are larger in size and very expensive.

W - 210 are popularly known as ' Jumbo ' nuts.

W - 240, it is an attractive grade which is reasonably priced.

W – 320, are the most popular among cashew kernels and highest in terms of availability,
worldwide.

W – 450, are the smallest and cheapest white whole kernels and hence the favorite among
low priced whole grades.

Scorched wholes are the another grade of cashew kernels, which have a slight brown color
due to longer roasting. They have all another characteristics of white kernels and the same
nutritional quality.

1. CASHEW KERNELS – WHITE WHOLES

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White Wholes - 210
White Wholes - 180
White Wholes - 240

White Wholes - 450

White Wholes - 320 White Wholes - 500

2. CASHEW KERNELS - SCORCHED WHOLES

Scorched Scorched Scorched Wholes(SW) - 210


Wholes(SW) Wholes (SW) - 180

Scorched
Scorched Scorched
Wholes (SW) - 320
Wholes (SW) - 240 Wholes (SW) - 450

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3. CASHEW KERNELS - DESERT WHOLES

Scorched Wholes
Seconds (SSW)
Dessert Wholes(DW)

4. CASHEW KERNELS - WHITE PIECES

Splits (S) Large White Pieces (LWP)

Butts (B)

Small White Pieces (SWP) Baby Bits(BB)

5. CASHEW KERNELS - SCORCHED PIECES

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Scorched Splits (SS) Scorched Pieces (SP)
Scorched Butts (SB)

Scorched Small Pieces (SSP)

6. CASHEW KERNELS - DESSERT PIECES

Scorched Pieces Seconds (SPS) Dessert Pieces (DP)

2.2.3 CASHEW NUT SHELL LIQUID (CNSL) :-

Cashew nut shell liquid is a co product of cashew nut. It is a dark fluid


comprised of different unsaturated alkenyl substituted phenol. The oil is being extracted

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from cashew shell, which is the pericarp fluid of cashew nut. This is purely a natural
product and no chemical is added.

The CNSL has got wide range of applicability for making raw materials for
automobile brake lining such as liquid resign, PF resign and Cashew Friction Dust (CFD).
It is also used for manufacture of paint and varnishes.

The cashew nut shell liquid is an important raw material for a number of
polymer base industries like paints and varnishes, industrial and decorative laminates,
brake linings and rubber compounding resin. CNSL is used commercially as a phenolic
raw material for the manufacture of certain resin and plastic. In particular, it is used as a
friction modifier in the manufacture of industrial belting and clutches. It is also used for
reinforcing synthetic rubber and in laminating or impregnating material where oil acid
resistance is required. Other uses include the manufacture of lacquer, electrical insulation
materials, etc

Advantages: Improved Flexibility and reduced brittleness, Solubility in Organic


Solvents, Improved Process ability, Resistance to 'Cold Wear', Good Electrical Resistance,
Better Water Repellence, Improved alkali and acid resistance, Compatibility with other
polymers, Antimicrobial Property, Termite and Insect Resistance.

2.2.4 CARDANOL:-

Cardanol is a naturally occurring phenol manufactured from cashew nut shell


liquid (CNSL), a by product of cashew nut processing. Distillation of CNSL under reduced
pressure gives cardanol. The residue will be rich in cardanol which is conveniently used in
friction dust for brake lining, also in rubber compounding formulation. Cardanol phenol
resin was developed in the 1920s by Mortimer T. Harvey a student of Columbia
University. Cardanol is a phenol obtained from anacardic acid, the main component of
CNSL. Cardanol based resin posses an outstanding resistance to acid and alkalies.
Chlorinated cardanol is reported to have good insecticidal, pesticidal and germicidal
properties. Co-polymer of cardanol with other film forming material give good quality
lacquer giving golden yellow films both of drying and baking type.

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2.3 THE CASHEW EXPORT PROMOTION COUNCIL OF INDIA

The Cashew Export Promotion Council of India (CEPC) was established by the
Government of India in the year 1955, with the active cooperation of the cashew industry
with the object of promoting exports of cashew kernels and cashew nut shell liquid from
India. By its very set up, the Council provides the necessary institutional frame-work for
performing the different functions that serve to intensify and promote exports of cashew
kernels and cashew nut shell liquid and allied products.

The council undertakes detailed studies and collects trade information and other
particulars relating to the market potential of cashews and makes them available to the
exporters. It also deals with the trade enquiries received from various parties and passes
them on to its members. The global trade information on cashew and cashew products is
updated on continuous basis.

The Council also extends its good offices in settling complaints amicably in the
matter of exports/imports either on account of quality and /or variation in fulfillment of
contractual obligations.

As on 31 st March 2010 the Cashew export Promotion council of India had 183
ordinary Members, 9 Government Nominee making the total membership to 192.

The council sponsors’ trade delegation and study teams from time to time for
on the spot study of various markets abroad. These teams submit their reports on their
return, on the markets visited its potential and trends which serves as reference material
and also provide the basis for necessary follow up action. The market information
collected by these teams Delegations is disseminated to the trade industry.

The council participates in specialized international Food fairs and exhibitions and
general fairs abroad directly as well as through the Trade promotion Organizations of
Govt. of India. As the Council represents the whole industry, it arranges display of
products received from the members free cost. The enquiries received are circulated
amongst the members for their contracting the parties abroad for business negotiations.

During the year 2014-2015, the council participated in five international exhibition
viz. Fancy Food show (New York), Africa Big seven Exhibitions (Johannesburg), Fine

21
food (Australia), India show (st.Petersburg), ANUGA (Cologne). The council had
disbursed a sum of Rs. 20.60 laks to member exporters under MDA assistance for
participating in international fairs and trade delegations.

The Council publishes two periodicals viz. Monthly 'Cashew Bulletin' and
Quarterly 'Indian Cashew Journal' which contains market news, country profiles,
Government's notifications and circulars, export and import statistics, commodity prices,
news and notes on cashew etc. Apart from this, the Council also publishes Cashew Grades
Folder , Delegation Reports, Statistical Reports, Cashew Recipe Books, Directory of
Indian Cashew Exporters, brochures, booklets on cashew kernels, cashew nut shell liquid
etc.

The council has sponsored many research projects for improvement of packaging ,
developing new products out of cashew, etc in association with reputed research
institutions like Indian Institute of Packaging, Central food Technological research
Institute, regional Research Laboratories, etc. The council had entrusted Research and
development project with Central Food Technological Research Institute, Mysore for
developing a technology for commercial manufacture of value added products like cashew
butter, cashew kernel oil etc. A research project to develop of transparent resins from
cashew nut shell liquid is being undertaken by Regional Research Laboratory, Trivandrum,
for the council.

The council has set up CEPC Laboratory and Technical Division at Quilon. The
Laboratory renders analytical services to exporters for ensuring the quality of their
products. National accreditation board for Testing and calibration laboratories (NABL).
Under the Department of Science and Technology, Government of India has granted
accreditation in the fields of Chemical Testing Biology Testing to the Laboratory, This
accreditation is recognition of the technical competence of the Laboratory acquired during
the years.

The Laboratory also extends consultancy services to exporters for technology up


gradation, Modernization of factories, adaptation of HACCP/ISO 9000 quality systems in
cashew factories etc. The Training Centre attached to its Laboratory at Quilon imparts

22
training to cashew processors, workers in processing factories, etc. on good manufacturing
practices, maintenance of hygienic standards, etc.

In addition to the above the council also undertakes publicity abroad with a view to
projecting the ‘Product Image’ which serves to focus attention on the high quality and
superiority of Indian cashews.

With regards to the development of cashew processing- exporting sector, the council
provide grant- in- aid to exporters under Five year plan Scheme for projects like
Modernization of factories, Technology transfer, improving quality by adopting ISO/
HACCP quality systems acquiring latest packaging system etc.

2.3.1 BENEFITS PROVIDED BY CEPCI TOWARDS

23
MEMBER EXPORTERS

Export of cashew kernels and CNSL & cardanol:-

 Export of Cashew kernels, CNSL AND Cardanol could be carried out the member
of CEPC HAVING A IE code. Cardanol continued to the included in the list of
items under Minor Forest Produce.

Import of raw cashew nut:-

 During 2014-2015 the member of CEPC could import raw cashew nut under OGL

Export incentives:-

 The DEPB rate for export of cashew kernels continued at 1.5%


 Duty draw back rates remained at 1% of FOB value.
 Vishesh Krishi Aur Gram Upaj Yojana (VKGUY) for cashew and CNSL during
2014-2015 at 5% .This helped the industry to survive in spite of global recession.

Production development:-

 Since the shortage of raw cashew nut continued to be a serious problem of Indian
cashew industry, the council continued its effort to persuade the authorities
concerned to implement schemes for increasing production of raw cashew nut.

Sales Tax/ VAT / CST/ Service Tax:-

 The council continued to pursue with the Central/ State Govt. to exempt or reduce
the rate of VAT for raw cashew nut and cashew kernels.
 CST rates continued unchanged
 The council has been representing to the Govt. to exempt cashew export from
purview of service tax.

Assistance for Export Promotion Activities to Exporters

 Five Year Plan Scheme :-

24
The Govt. of India, Department Of Commerce has accorded approval to the
Export Promotion Scheme of the Cashew Export Promotion Council of India to
implement a scheme “Modernization & Diversification Scheme”. This scheme
extending financial assistance to member exporters for upgrading and improving
their processing and manufacturing facilities. During 2014-2015, the council
disbursed Rs. 5.00 Crs to 380 exporters under this scheme. This Scheme has
following four components. They are:

 Process Up gradation / Modernization of Cashew Processing Units.


 Setting up facilities for value addition / consumer packing of Cashew
kernels.
 Adaptations of new packaging system.
 Implementation of internationally quality systems like ISO, HACCAP,
ORGANIC etc.

 Market Development Assistance (MDA) Scheme:-

During 2014-2015, a sum of 20, 56,158/- was distributed to 35 member


exporters as grant towards international fairs, trade delegations etc under this
scheme.

2.4 CASHEW AND ITS IMPORTANCE

2.4.1 Cashew Wood: The cashew tree is known for producing wood with high levels
of resin. The resin from the cashew wood is made into a varnish for books wood and
floorings which is to prevent deteriation from ants and other home-invading insects.

2.4.2 Raw Cashew Nut: The raw cashew nut is not edible. However through
processing, the caustic oil is removed from the cashew nut shell. This caustic oil is referred
to as Cashew Nut Shell Liquid (CNSL) and is located in the tissue between the two walls
of the nut shell. CNSL has many industrial uses which include automobile and airplane
brake fluid, adhesives, paints and varnishes, insecticides, electrical insulation, and anti-
microbials

2.4.3 Cashew Nut Kernel: Cashew nuts contain high degree of proteins, fats and
vitamins. Cashew kernels contain 21 % of vegetable proteins. Nutritionally they stand at

25
par with milk, eggs and meat. It also contains a high concentration of much needed amino
acids.

Indian cashews are nature’s proven finest diet. Its all time all place snack. It is a
storehouse of nutrients. It contains protein 21%, fat 47%, moisture 5.9 %, carbohydrates
22%, phosphorus 0.45%, calcium 0.05%, iron 5% for every 100 gm and other mineral
elements. They protect human nervous system.

Cashew nut consumption is also recommended for diet and weight loss. Cashew nuts
have a high energy density and high amount of dietary fiber, both which have been
attributed to a beneficial effect on weight management.

Cashew nut kernel contains 47% fat, but 82% of this fat is unsaturated fatty acids.
This is important because no dietician will prescribe a saturated fat packet to any one due
to its high cholesterol content. Unsaturated fat eliminates the possibility of, and actually
lowers, the cholesterol level in blood.

The most prominent vitamins in cashew are Vitamin A, D and E. These


vitamins help assimilate the fats and increase the immunity level.Cashew comprises a
surprising spectrum of vitamins and Amino acids in the right proportions. The percentage
of Arginine is 10.3, Histidine 1.8, Lysine 3.3, Tyrosine 3.2, Phenylalamine 4.4, Cyctine
1.0, Methinonine 1.3, Valine 4.5.

2.4.6 Medicinal Uses: There are many medicinal uses of cashew leaves, bark, and juice
from the cashew apple. The cashew tree's leaves and bark as well as the popular cashew
apple possess herbal health benefits that include killing bacteria and germs, stopping
diarrhea, drying secretions, increasing the libido, and reducing fever, blood sugar, blood
pressure and body temperature.
Cashew bark teas were used to stop diarrhea while the caustic shell oil was
used to treat skin infections, warts, intestinal worms, and parasitic larvae beneath the skin.
Teas and fruit juices from the cashew apple and leaves are known to have antimicrobial,
anti-inflammatory, astringent, diuretic, hypoglycemic, and other medicinal properties. The
active ingredients in the teas and juices are thought to be tannins, anacardic acid, and
cardol. Modern uses of shell oil and fruit juice include facial peels and scalp conditioners

26
and shampoos. The cashew apple has also been a long time nutrional supplement as it
contains up to 5 times more vitamin C than citrus and strawberries.

CHAPTER –IV

MAJOR PROBLEMS FACED BY CASHEW EXPORTERS

Indian cashew exporters are facing number of problems in the stage of


procuring raw materials, production and exports etc. the major problems faced by cashew

27
exporters includes acute shortage of raw cashew nuts, fluctuation in exchange rate, lack of
infrastructural facility, competition from Vietnam and difficulties in sourcing funds etc.

MAJOR PROBLEMS

1. Shortage of Raw Cashew Nuts


Shortage of raw cashew nut adversely affects the export of cashew product. In
India Domestic production of cashew has been fluctuating during the recent year. This is
mainly due to the inclement weather and aging of cashew tree. This would drop the
productivity. Apart from the use hybrid variety, new systematic and scientific method
should be used. The idea of replantation programme and organic cashew farming can
enhance the domestic productivity. Now, India’s domestic productivity is around 7 lacks.
While their processing capacity is about 14 lacks tones. So India has to depend on
imported raw cashew nuts.

2. Infrastructure
The export of cashew product requires shipments from airport and sea ports. The
Poor infrastructure in the Indian Scenario creates logistical problems. To agreement export
infrastructure is more important. The warehousing and storage facilities are not adequate
and the standards are very poor when compared with international parameters. Most of the
airports are not connected to international cities. The rail net works is inadequate to serve
the transportation requirements of agro commodities. This results in higher lead time for
procurement and cause delay in delivery.

3. Competition

Indian exporters face stiff competition from countries like Vietnam and Brazil.
Productivity of these countries is more compared to productivity of India. These countries
using new modernized systematic and scientific method. Production capacity of Vietnam is
more than that of India. This is because the usage of high yielding variety crop, their
adequate harvesting technique, storage and ware house facilities. Vietnam as a major
exporter of raw cashew at competitive price .The Govt. of these countries gives various
concession to the cashew export community. The tariff was imposed by union Govt. for
the Indian exporters. To increase the economies of scales they enable to offer product at
lower price.

4. Financial problems

28
The cashew industry not has sufficient financial capacity. The bank and
financial institutions are providing few amounts of loans and advances at high rate of
interest basis. At that bank and financial institutions are ask for high securities and not
giving this loans and advances at correct time. This lead to shortage of production. Some
banks unnecessarily delaying for opening L\C. This type financial institutional rules and
procedure are very risky. Today cost of production is very high .so the exporter’s required
huge amount of finance. Especially the small exporters are highly faced in this problem.
The govt. spent some amount to cashew industry, but this amount is not sufficient for all
exporters in India.

1.5 RESEARCH METHODOLOGY

RESEARCH DESIGN:-

As a first stage the search on literature about concept, method of utilization, its
proceedings all that require a descriptive analysis. The opinions were collected through
questionnaire.

The results were analyzed by applying tools and result has been interpreted. So
the study was analytical research.

29
SAMPLE DESIGN:-

The study was conducted in Kerala. The exporters list was collected from the
website www.cashewindia.org.

SAMPLE SIZE:-

A sample of 50 exporters was taken for the study. Among them, 48 samples are
collected from Kollam district and remaining samples collected from Cochin district.

TOOLS APPLIED:-

The data were analyzed through the application of various statistical tools like chi-
square test and simple percentage analysis.

Chi-square Test

The formula is  2 =  (O-E) 2

Where O = Observed frequency

E = Expected frequency

1.6 DATA COLLECTION TECHNIQUES

The study based on both primary and secondary data. Primary data were
collected through structured questionnaire and secondary data from annual report of
cashew export promotion council of India, books, magazine, journals, and newspapers and
through internet.

30
TABLE 1

EXPORT OF CASHEW KERNELS FROM

INDIA DURING 2015-2016

31
2014-2015

Countries QTY %
(M.T)
U.S.A 30804 28.49
U.A.E 18161 16.81
Netherlands 10314 9.53
Japan 5633 5.20
U.K 4477 4.14
Saudi Arabia 3827 3.53
France 3814 3.52
Spain 2782 2.57
Belgium 2470 2.28
Greece 2222 2.05
Egypt 2018 1.86
Australia 1482 1.37
Germany 1451 1.34
Others 18663 17.26
Total 108120 100

INFERENCE:

The above table shows that cashew kernels exports from India to various
countries. USA stands the 1st position in consuming cashew kernels from India.

CHART 1

EXPORT OF CASHEW KERNELS FROM

INDIA DURING 2015-2016

32
TABLE 2

EXPORT OF CASHEW NUT SHELL LIQUID

FROM INDIA DURING 2015-2016

33
IN FERE
NCE:
2014-2015
Countries QTY % From
the (M.T) above
U.S.A 4827 49.51
table shows
China 2770 28.41
that the export
Korea Rep. 1368 14.03
of cashew
Japan 322 3.30
Nut shell
Indonesia 178 1.26
liquid Taiwan 65 0.66 from
India to Slovenia 41 0.42 various
Thailand 31 0.31
Egypt 20 0.20
South Africa 16 0.16
Others 110 1.12
Total 9748 100

countries.USA stands the 1st position in consuming cashew Nut Shell Liquid from India
followed by China, Korea, Japan etc.

CHART 2

EXPORT OF CASHEW NUT SHELL LIQUID

FROM INDIA DURING 2015-2016

34
35
TABLE 3

TYPE OF EXPORTER

Type No. of Respondents Percentage

Merchant 10 20

Manufacturer 35 70

Both 5 10

Total 50 100

INFERENCE:

From the above table inferred that 70 % of the respondents are manufacturer
exporter, 20% of the respondents are merchant exporter and remaining of the respondents
are both manufacture and merchant exporters.

36
CHART 3

TYPES OF EXPORTERS

TABLE 4

COUNTRY WISE EXPORT

37
Countries No. of Respondents Percentage

American Zone 17 34

European Union 12 24

West Asia 9 18

East Asia 6 12

African Zone 4 8

Others 2 4

Total 50 100

INFERENCE:

From the above table reveals that 34 % of the cashew products are consumed by
American zone, 24 % , 18 % , 12% are consumed by European Union, West Asia, East
Asia respectively. Remaining 8 % and 4% of cashew products are consumed by African
Zone and other countries.

CHART 4

COUNTRY WISE EXPORT

38
Country wise Export For the Year 2015-2016

TABLE 5

DURATION OF EXPORT

39
Particulars No. of Respondents Percentage

Weekly 3 6

Fort nightly 17 34

Monthly 24 48

Quarterly 6 12

Total 50 100

INFERENCE:

From the above table reveals that 48 % of the exporters are export their cashew
product monthly, 34 % and 12 % of the exporters are export fort nightly and quarterly
respectively. Remaining 3 % of the exporters export weekly.

CHART 5

DURATION OF EXPORT

40
TABLE 6

TYPES OF CASHEW PRODUCT EXPORTING

41
Type No. of Respondent Percentage

Cashew Kernel 40 80

CNSL 8 16

Cardanol 2 4

Total 50 100

INFERENCE:

The above table reveals that 80 % of the respondents are exporting cashew kernels
and 16% of the respondents are exporting CNSL to different countries. Remaining 2 % of
the respondents are now exporting cardanol.

CHAR 6

TYPES OF CASHEW PRODUCT EXPORTING

42
TABLE 7

IRREGATION SYSTEM FRUIT FUL FOR THE

43
GROWTH OF CASHEW

Particulars No. of Respondent Percentage IN


FE R
Agree 37 74
E N
C E:
Disagree 13 26
Fr
om Total 50 100 the

above table it is inferred that 74% of the respondent are told the irrigation system fruitful
for the growth of cashew and remaining 26% of the respondents feels that irrigation
system is not suitable for the growth of cashews.

CHART 7

IRREGATION SYSTEM FRUIT FUL FOR THE

GROWTH OF CASHEW

44
TABLE 8

HYBRID YEILDING VARIETY RESUILT CHANGES IN THE


PRODUCTIVITY

45
Particulars No. of Respondent Percentage

Agree 32 64

Disagree 18 36

Total 50 100

INFERENCE:

From the above table it is inferred that 64% of respondent’s opinion is hybrid
yielding variety result changes in productivity and remaining 36 %of the respondent’s
opinion is hybrid yielding variety result no changes in the productivity.

CHART 8

HYBRID YEILDING VARIETY RESUILT CHANGES THE


PRODUCTIVITY

46
TABLE 9

SUFFICIET LABOURS FOR PROCESSING

47
Particulars No. of Respondent Percentage

Yes 40 80

No 10 20

Total 50 100
INFERE
NCE:

From the above table it is inferred that 80 % of the respondent’s opinion was they
have sufficient labors for processing of raw cashew nut. 20 % of respondents feel they
have no sufficient labours for processing.

CHART 9

SUFFICIET LABOURS FOR PROCESSING

48
TABLE 10

49
PROBLEMS IN AFTER THE EMERGENCE OF
VIETNAM AS ACOMPITATIVE EXPORTERS

Particulars No. of Respondent Percentage

Yes 46 92

No 4 8

Total 50 100

INFERENCE:

From the above table inferred that 92 % of respondents are facing the competition
after the emergence of Vietnam and remaining 8% of the exporters are not facing any
competition.

50
CHART 10

PROBLEMS IN AFTER THE EMERGENCE OF VIETNAM AS


ACOMPITATIVE EXPORTERS

51
TABLE 11

PROBLEMS RELATED TO GETTING PROPER INFORMATION


ABOUT THE WORLD MARKET

IN Particulars No. of Respondent Percentage FERE


NCE:
Yes 9 18
From
the No 41 82 above
table it is
inferred Total 50 100 that 82
% of
respondents are getting information about the world market and remaining 18 % of the
respondents are not getting proper information about the world market.

52
CHART 11

PROBLEMS RELATED TO GETTING PROPER INFORMATION


ABOUT THE WORLD MARKET

53
TABLE 12

PROBLEMS IN PACKAGING OF

CASHEW PRODUCTS

Particulars No. of Respondent Percentage

I NFE
Yes 28 56
REN CE:
No 22 44
From
the table
Total 50 100
it

reveals that 56% of the respondents are facing the problems of packaging of cashew
products and remaining 44 % of the respondents are not facing the problems of packaging
of cashew products.

54
CHART 12

PROBLEMS IN PACKAGING OF

CASHEW PRODUCTS

TABLE 13

FACE ANY TRADE DISPUTES

55
IN Particulars No. of Respondent Percentage FER
ENC E:
Yes 35 70
From
the No 15 30 above
table it is
Total 50 100

inferred that 70% of the respondents are faced the trade disputes and remaining 30% of the
respondents are not faced any trade disputes.

CHART 13

FACE ANY TRADE DISPUTES

56
TABLE 14

DIFFICULTY IN CUSTOM CLEARENCE

57
FOR EXPORTS

Particulars No. of Respondent Percentage

INFER ENCE:
Yes 38 76

F rom the
No 12 24
above table it
reveals that 76%
Total 50 100
of the

respondents are facing difficulty during customs clearance and remaining 24% of the
respondents are not facing any difficulty during customs clearance for cashew exports.

CHART 14

DIFFICULTY IN CUSTOM CLEARENCE

FOR EXPORTS

58
TABLE 15

PROBLEMS IN RECEIVING EXPORT PROCEEDS

59
Particulars No. of Respondent Percentage

Yes 30 60

No 20 40

Total 50 100

INFERENCE:

From the above table reveals that 60% of the respondents are facing the
problems in receiving export proceeds, and remaining 40 % of the respondents do not face
the problems in receiving export proceeds.

CHART 15

PROBLEMS IN RECEIVING EXPORT

60
PROCEEDS

TABLE 16

DOMESTIC PRODUCTION OF SUFFICIENT

61
RAW CASHEW NUT

Particulars No. of Respondent Percentage

Yes 8 16

No 42 84

Total 50 100

INFERENCE:

From the above table reveals that 84% of the respondents are not getting sufficient
raw cashew nut from domestic production for processing. Remaining 16% of the
respondents are getting sufficient raw cashew nut to meet their requirements.

CALCULATION OF CHI- SQURE

62
Null Hypothesis (H0): Domestic production of sufficient raw cashew nuts meets the
requirements.

 2 =  (O-E)2

Expected value E= RT*CT/E

= 50*50/100=25

O E (O-E)2 (O-E)2/E
42 25 289 11.56
8 25 289 11.56
8 25 289 11.56
42 25 289 11.56

 (O-E) 2/E=46.24

So  2 = 46.24

Degree of freedom = (c-1) (r-1)

= (2-1) (2-1) =1

The degree of freedom 1 at 5% level of significance  2 = 3.841

 Calculated value - 46.24


Table value - 3.841
INFERENCE:
Since the calculated value is greater than the table value, the null hypothesis is
rejected. So the cashew exporters were not getting sufficient raw cashew nuts from
domestic production to meet the requirement.

63
CHART 16

DOMESTIC PRODUCTION OF SUFFICIENT

RAW CASHEW NUT

64
TABLE 17

FLUCTUATION IN EXCHANGE RATE

Particulars No. of Respondent Percentage

Yes 47 94

No 3 6

Total 50 100

INFERENCE:

From the above table reveals that 94% of the respondents are facing the problems of
fluctuation in exchange rate. Remaining 6% of the respondents are not facing such
problem.

65
CALCULATION OF CHI- SQURE

Null Hypothesis (H0): Fluctuations in exchange rate are not affecting cashew exports.

 2 =  (O-E)2

Expected value E= RT*CT/E

= 50*50/100=25

O E (O-E)2 (O-E)2/E
47 25 484 19.36
3 25 484 19.36
3 25 484 19.36
47 25 484 19.36
 (O-E) 2/E =77.44

So  2 = 77.44

Degree of freedom = (c-1) (r-1)

= (2-1) (2-1) =1

The degree of freedom 1 at 5% level of significance  2 = 3.841

 Calculated value – 77.44


Table value - 3.841
INFERENCE :
Since the calculated value is greater than table value, the null hypothesis is rejected.
So the fluctuation in exchange rate affects the cashew exports.

66
CHART 17

FLUCTUATION IN EXCHANGE RATE

TABLE 18

67
LAK OF INFRASTRUCTURE FACILITY

Particulars No. of Respondent Percentage

Yes 40 80

No 10 20

Total 50 100

INFERENCE:
From the above table it is inferred that 80% of the respondents are facing problems
in infrastructure facilities and remaining 20% of the respondents are not facing any
problems in infrastructure facilities.

68
CALCULATION OF CHI- SQURE

Null Hypothesis (H0): Lack of infrastructure facility not affects cashew exports.

 2 =  (O-E)2

Expected value E= RT*CT/E

= 50*50/100=25

O E (O-E)2 (O-E)2/E
40 25 225 9
10 25 225 9
10 25 225 9
40 25 225 9
 (O-E)2/E =27

So  2 = 27

Degree of freedom = (c-1) (r-1)

= (2-1) (2-1) = 1

The degree of freedom 1 at 5% level of significance  2 = 3.841

 Calculated value - 27

Table value - 3.841

INFERENCE:

Since the calculated value is greater than table value, the null hypothesis is
rejected. So the lack of infrastructure facility affects the cashew exports.

CHART 18

69
LACK OF INFRASTRUCTURE FACILITY

TABLE 19

70
COMPETITION IS AN IMPORTANT HINDERING
FACTOR FOR CASHEW EXPORTS

Particulars No. of Respondent Percentage

Agree 45 90

Disagree 5 10

Total 50 100

INFERENCE:
From the above table it is inferred that 90% of the respondents told that competition
is an important hindering factor for cashew export. Remaining 10% of the respondents are
told that competition is not an important hindering factor for cashew exports.

CALCULATION OF CHI- SQURE

71
Null Hypothesis (H0): Competition is not an important hindering factor for cashew
exports.

2 =  (O-E)2

Expected value E= RT*CT/E

= 50*50/100=25

O E (O-E)2 (O-E)2/E
45 25 400 16
5 25 400 16
5 25 400 16
45 25 400 16
 (O-E)2/E =64

So  2 = 64

Degree of freedom = (c-1) (r-1)

= (2-1) (2-1) = 1

The degree of freedom 1 at 5% level of significance  2 = 3.841

 Calculated value - 64

Table value - 3.841

INFERENCE:

Since the calculated value is greater than table value, the null hypothesis is
rejected. So the competition is an important hindering factor for cashew exports.

CHART 19

COMPETITION IS AN IMPORTANT

72
HINDERING FACTOR FOR CASHEW

EXPORT

TABLE 20

PROBLEMS IN SOURCING FUNDS

73
Particulars No. of Respondent Percentage

Yes 32 64

No 18 36

Total 50 100

INFERENCE:

From the above table it is inferred that 64% of the respondents are facing the
problem of sourcing funds, and remaining 36% of the respondents are not facing the
problems of sourcing funds.

CALCULATION OF CHI- SQURE

Null hypothesis (H0): Problems in sourcing funds are not affecting cashew exports.

74
 2 =  (O-E)2

Expected value E= RT*CT/E

= 50*50/100=25

O E (O-E)2 (O-E)2/E
32 25 49 1.96
18 25 49 1.96
18 25 49 1.96
32 25 49 1.96
 (O-E)2/E =7.84

So  2 = 7.74

Degree of freedom = (c-1) (r-1)

= (2-1) (2-1) = 1

The degree of freedom 1 at 5% level of significance  2 = 3.841

 Calculated value – 7.74

Table value – 3.841

INFERENCE:

Since the calculated value is greater than the table value, the null hypothesis is
rejected. So the cashew exporters were facing problems in sourcing funds.

CHART 20

PROBLEMS IN SOURCING FUNDS

75
CHAPTER- V

FINDINGS AND SUGGESTIONS

FINDINGS:

 From the survey, it was found that 70% of the respondents are manufacturer
exporters.

76
 Most of the respondents export monthly.
 From the survey, it was found that majority of the exporters (80%) export
cashew kernels and remaining respondents export other cashew product.
 Majority of the respondents export their product to American Zone.
 Most of the exporters told that irrigation system is fruitful for the growth of
cashew.
 Majority of the exporters feels that hybrid variety shows changes in their
productivity.
 From the survey, it was found that majority of the respondents did not get
sufficient raw cashew nut to meet the requirements.
 Fluctuation in exchange rate is the major problem faced by most of the Indian
exporters.
 Majority of the respondents are facing competition after the emergence of
Vietnam. Vietnam and Brazils is the major competitor of Indian exporters.
 From the survey, it was found that majority of the exporters face the lack of
infrastructure facility problems.
 Most of the exporters get proper information about the world market. It was
given by CEPCI.
 Majority of the exporters feel that competition is a major hindering factor for
marketing of cashew product.
 About 56 % of the respondents are facing problems in packaging of cashew
product.
 From the survey, it was found that exporters are facing trade dispute problem.
 From the survey, it was found that 76% of the exporters are facing the custom
clearance difficulties for exports.
 About 64% of the exporters are facing the problems of sourcing funds.
 From the survey, it was found that 60% of the respondents facing problems in
receiving export proceeds.
 Majority of the respondents told that Govt. conducting quality improvement
training program for developing exports.

77
SUGGESTIONS:

 There should be increase in the production of raw cashew nut by taking


scientific and systematic method other than using hybrid variety.
 Replantation programme and introduction of organic cashew farming can
enhance the domestic production of raw cashew nuts.
 Govt. should provide certain incentives to achieve the higher growth rate of
production.
 Cashew exporters should use new innovations and modernized technology for
processing of cashew nut to overcome the shortage of laborers.
 Govt. should provide financial assistance to improving the infrastructural
facility.
 Should introduce more incentives and facilities to laborers.
 CEPCI should provide the information about the world market at right time to
Indian exporters.
 Trade fairs and seminars should be conduct in foreign countries.

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 Central Govt. can increase the assistance to exporters in participating trade fair
exhibitions.
 Govt. should take a step to making lack of persons, good quality and recyclable
package.
 Central Govt. /CEPCI should provide subsidiaries and loan facilities to cashew
exporters.

CONCLUSION

The research brought about the problems faced by the cashew exporters from India
especially in Kerala. The exporters face various problems like acute shortage of raw
cashew nut, fluctuation in exchange rate, lack of infrastructural facility, competition from
Vietnam and financial problems etc. Through these problems it may reduce the export
performance of cashew kernels and CNSL during 2014-2015 when compared to the year
2008-2009. Global recession also adversely affects the Indian cashew exports during the
current year with demand from US and Europe dropping. Consequently prices and volume
of sales fell in international market.

The central Govt. as well as state Govt. should adopt a programme for
increasing the domestic production of raw cashew nut and improve the quality of finished
product. CEPCI has to encourage the exporters in participating trade fairs and exhibitions.
So that cashew exports from India will increase and it make India become a largest cashew
exporting country among other countries of the world.

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Thus the central Govt. should adopt certain measure for reducing the major
problems and encouraging exporters. Then only the cashew exporters to reach their target
in future export of India.

BIBILIOGRAPHY

BOOKS

 C.R. Kothari, Research Methodology, New Age International


(Pvt) Limited, Second Edition, 1985.
 G.P. Gupta, Statistical Methods, Himalaya Publications.
 Annual report of cashew export promotion council during 2014-2015.

NEWS PAPERS

 Business Line

WEBSITES

 www.google.com
 www.cashewindia.com
 www.wikipedia.org

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STUDY ON PBOBLEMS FACED BY CASHEW
EXPORTERS FROM INDIA

QUESTIONNAIRE

Name of Company:

Address: ……………………………………

…………………………………………………

………………………………………………….

1. What type of exporter you are?

a). Manufacturer b). Merchant c). Both

2. For how many years your company has been in the field

of domestic as Well as export marketing?

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a). Less than 5 years b). 5-10 years c). 15 & above

3. Which are the countries to which you export cashews?

a). American zone b). European Union c). West Asia

d). East Asia e). African zone f). Others

(Please specify)

……………………………………………

4. How often do you export?

a). Weekly b). Fort nightly c). Monthly

d). Others (Please specify)

………………………………………………

5. Which type of cashew products are being export by you?

a). Cashew kernels b). Cashew nut shell liquid

c). Cardanol

6. Do you agree that the irrigation system fruitful for the

growth of Cashews?

a). Agree b). Disagree

7. Do you agree the hybrid varieties result in any increase

in the productivity?

a). Agree b). Disagree

8. Do you get sufficient raw cashew nuts to meet your

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Requirements?

a). Yes b). No

9. Do you get sufficient labour for your processing?

a). Yes b). No

10. Do you face any problems related to fluctuation in

exchange rate?

a). Yes b). No

11. Do you face any problem after the emergence of

Vietnam as Competitive exporters?

a). Yes b). No

12. Do you face any problems related to infrastructural

facility?

a). Yes b). No

13. Do you face any problems related to getting proper

information about the world market?

a). Yes b). No

14. Do you agree that competition is a hindering factor for

cashew exports?

a). Agree b). Disagree

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15. Do you face any problem in packaging of export of

cashew from India?

a). Yes b). No

16. Have you been facing any trade disputes?

a). Yes b). No

17. Do you face any difficulty in customs clearance for

exports?

a). Yes b). No

18. Do you face any problem in sourcing funds?

a). Yes b). No

19. Do you face any problem in receiving export proceeds?

a). Yes b). No

20. What are your suggestions to improve exports of

Cashew and allied Products from India?

………………………………………………..

…………………………………………………

………………………………………………..

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