With Supplyco gearing to procure 4 lakh kg of nuts for the Onam kit, the cashew sector has finally something to cheer about amidst a major slump.
Industry stakeholders believe that the measure can set the sector on the path of revival and help it emerge from the crisis , especially after the alarming fall in demand during COVID-19.
“As per the current rate, Supplyco will have to spend around ₹46 crore to procure the product. It is a positive development as the rising demand will lead to an increase in prices,” says Nizamudeen I., president, Federation of Cashew Processors and Exporters.
Supplyco requires around 85 lakh cashew sachets, each weighing 50 gm. “It has triggered a spurt in the domestic market and if the global demand rebounds, the sector will revive. Business is expected to pick up after August as the markets in metros such as Mumbai and Delhi are also recovering,” he adds.
In India, more than 20 cashew grades are commercially available and Supplyco will be procuring cashew splits, a variety usually used for preparing desserts such as payasam. “The government will be distributing 85 lakh kits and the decision to include cashew, cardamom, and ghee will promote our domestic industries,” says S.Jayamohan, former chairman, Kerala State Cashew Development Corporation Limited (KSCDC).
Since the volume is huge, mid and small scale processors will also benefit. Big processors will have to source the material from units across the State offering them some relief. “Factories in both public and private sectors will benefit as a single unit won’t be able to provide the required quantity,” he adds.
The crisis-ridden industry had hit rock bottom during the pandemic due to the dip in exports and lull in domestic market. While the supply chain was badly hit in the initial days, a sharp decline in demand was reported later. Since all large-scale events, celebrations, and weddings were called off, the consumption hit an all-time low. Lack of tourists and pilgrims was another blow to the industry as prices started plummeting.
The KSCDC, which had record sales of ₹5.5 crore during 2019 Onam, could not repeat it in 2020 while private processors had a hard time trying to clear the stock. “If we continue the procurement in coming years too, there will be a steady market and the labourers will get more working days,” adds Mr.Jayamohan.