CASHEW

We are……
Ganesh Kumar
Nikhil Sheth
Dipayan Das ITM Business School
Global Leadership Centre
Masters In International Business
04/Dec./2006 1
Navi Mumbai
History
 The Portuguese introduced cashew into India
 Second half of the 16th century
 Its commercial value was only realized in
the twentieth century.

 The world market for cashew is relatively

new. Cashew started appearing on global
markets towards the middle of the 1920s
 Trade was dominated by two countries:
India, United States.

04/Dec./2006 2
Cont..
 The cashew tree, native to Brazil, was
introduced to Mozambique and then
India.

 As a means of controlling coastal

erosion.

04/Dec./2006 3
 Some background

 India is a major player on the cashew

world stage. While cashew cultivation
originated in Brazil.
 Today cashew is cultivated in Asia, Africa
and Latin America.
 In the year 2000, the total global area
under cashew cultivation 4,000,000 ha.
 Average productivity was around 510 kg
per ha.
 Total raw nut production was 1.8 million
tones.
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Cont..
 India is the 2ND largest country in the
world cashew economy for area as well
as production of raw cashew nuts.
 Brazil is first.
 Today cashew is cultivated on around
720,000 ha in India.
 Yielding an output of 450,000 MT
 Average productivity of 710 kg/ha.
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Cont..
 Cashew processing, using manual
techniques, was started in India in the
first half of the twentieth century.

 It was exported from there to the

wealthy western markets, particularly
the United States. In the 1960s.

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 Cont..
 The cashew industry ranks third in the world
production of edible nuts.
 world production in 2000 at about 2 million
tones of nuts-in-shell and an estimated value
in excess of US$2 billion.
 India and Brazil are the major cashew
exporters, with 60 percent and 31 percent
respectively of world market share.
 The major importers are the United States
Netherlands, Germany, Japan, United
Kingdom.
04/Dec./2006 7
Cashew
 Three main cashew products are
traded on the international market:
 Raw nuts
 Cashew kernels
 Cashew nut shell liquid (CNSL). A
fourth product
 The cashew apple is generally
processed and consumed locally.
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Cont..
 One major factor that affects the
consumption of cashew kernels in
world markets is competition from
other tree nuts.

 The major importers in developed

countries contract their requirement
for the whole year based on the sales
from previous years

04/Dec./2006 9
Cashew nut shell liquid

 Cashew nut processing allows for the

development of an important by-product,
which can increase its added value.

 The liquid inside the shell (CNSL)

represents 15 percent of the gross weight
and has some attractive possible
medicinal and industrial uses.

 Main Markets are United state, European

Union, Japan.
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Cont..
 Cashew is a good crop for smallholder
farmers. In Mozambique cashew is
considered by smallholder farmers to be one
of their most lucrative crops.

 Thus cashew has the potential to increase

the incomes of poor producers, to create
employment opportunities during harvesting
and processing and to increase exports.

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Quality

W210, W240, W320, W450,

First quality WB, WS, LWP, SWP

LBW210, LBW240,
LBW320, LBW, SW210,
SW2440, SW320, SW,
Second quality SB, SS, LP, SP
Third quality DW320, DW350, DW
Fourth quality DW2, DW3
Fifth quality SW2, SW3, DW, DWT
04/Dec./2006 CS, SK, SK2, TPN, TPN2,12
Sixth quality TPB, DW4
 Grading


Cashew Kernels are graded into

white/scorched wholes, pieces, splits, butts
etc.. depending on the shape, size & color of
the kernel. 
 The Govt.of India  Act prescribes 33 different
grades of cashew kernels. Only 26 grades are
commercially available and exported. 
 W - 180, is the ' King of Cashew ' - They are
larger in size and very expensive.
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Cont..
 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.  

04/Dec./2006 14
 Product description
Designation W - 240

Trade Name White Wholes

White/pale ivory/light
Color/
ash, Characteristic
characteristics
shapes
Count/454 gms
220 - 240
size description
Max Moisture % 5

Broken Max % 5
NLSG NLG max 5 (NLSG & SW
% together)
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 Product description
Grade Designation W - 320

Trade Name White Wholes

Colour/ White/pale ivory /light ash,

characteristics Characteristic shapes

Count/454 gms
300 - 320
size description

Max Moisture % 5

Broken Max % 5

NLSG NLG max %

04/Dec./2006 5 (NLSG & SW together) 16
 Product description
Grade Designation W - 450

Trade Name White Wholes

White/pale ivory/light ash,

Colour/ characteristics
Characteristic shapes
Count/454 gms size
400 - 450
description

Max Moisture % 5

Broken Max % 5

NLSG NLG max %

04/Dec./2006
5 (NLSG & SW together) 17
 Product description
Grade Designation SW - 320
Trade Name Scorched Wholes
Kernels may be scorched/
slightly darkened due
Colour/ characteristics to over - heating while
roasting or drying in
drier/borma.
Count/454 gms size
300 - 320
description
Max Moisture % 5
Broken Max % 5

NLSG NLG max %

04/Dec./2006 7.5 (NLSG & SSW together) 18
 Product description
Grade Designation SW - 450

Trade Name Scorched Wholes

Kernels may be scorched/
slightly darkened due to
Colour/ characteristics over - heating while
roasting or drying in
drier/borma.
Count/454 gms size
400 - 450
description
Max Moisture % 5

Broken Max % 5
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NLSG NLG max % 7.5 (NLSG & SSW together)
 Product description
Designation SSW
Trade Name Scorched Wholes Seconds

Kernels may be over - scorched,

Colour/ immature, shrivelled (Pirival),
characteristics speckled (Karaniram),
discoloured and light blue.

Count/454 gms size

N.A
description
Max Moisture % 5
Broken Max % 5
04/Dec./2006 7.5 20
NLSG NLG max %
(DW)
 Product description
Designation FS

Trade Name Fancy Splits

White ivory or light
Colour/ characteristics ash. Kernels split
naturally lengthwise
Count/454 gms size
N.A
description
Max Moisture % 5

Broken Max % 5

5
NLSG NLG max %
04/Dec./2006 21
(SS)
 Product description
Designation FB

Trade Name Fancy Butts

White/pale ivory or light ash. Kernels
Colour/
broken cross - wise (evenly or
characteristics
unevenly) naturally attached.

Count/454 gms
N.A
size description

Max Moisture % 5

Broken Max % 5

04/Dec./2006 5 22
NLSG NLG max %
(SB)
 Product description
Designation BB
Trade Name Baby Bits

Colour/ characteristics White/ Pale ivory or light ash

Plemules and broken kernels
smaller than those
Count/454 gms size described as SWP but not
description passing through a 10
mesh 24 SWG Sieve /
1.70 mm I.S. Sieve.
Max Moisture % 5
Broken Max % N.A
04/Dec./2006 1% 23
NLSG NLG max %
(Cashew powder)
Labor Required
 Women
 Semi skilled labor.
 The industry is dominated by small-
scale, single-owner or family-owned
businesses.

04/Dec./2006 24
Cont..
 Traditionally the various processing
operations were performed manually
by experienced semi-skilled workers.
This is still the case in India, which is
the world' s largest producer of cashew
kernels

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Processing step

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 Cont..

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 Govt. Scheme
[as per 10th plan period]

 CEPC would provide one time subsidies to

cashew exporters for procurement of
equipment required for export of cashew in
consumer pack(max. Rs 8 lakhs)

 CEPC would provide one time subsidies to

cashew exporters on identified items of
equipments (Max. Rs 8 lakhs)

04/Dec./2006 33
Cont..
 CEPC provide subsidy to cashew exporter for
adopting flexi-pouch vacuum packing
systems either in indigenously or through
import. (Max. Rs 5 lakhs)

 CEPC would provide one time subsidy to

cashew exporter to improve facilities in the
factories & get certification like ISO,HACCP,
etc.( Max. Rs 5 lakhs for one system & Rs 8
lakhs for more then one system)
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Raw nut production

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 Cont..

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 Cont..

04/Dec./2006 41
GLOBAL TRADE
 Among 28 countries in the world involved in
cashew production, 26 countries are actually
engaged in production of cashew either for
export or for their own consumption or for both
export and domestic consumption.

 The share of the Indian crop vis-à-vis world

production for the year 2001 was 32% at
375,000 tons.

 The Brazil crop constituted 15% of the world

crop at 1,178,000 tons.
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04/Dec./2006 43
INDIAN CASHEW INDUSTRY IN A
NUTSHELL

 India started its exports in the early part of

20th century with a small quantity of 50 MT
which has
 increased almost to the level of 0.1 million MT
by the end of the same century.
Simultaneously
 the export earnings almost tripled during the
last decade of the 20th century.
 Cashew forms an important component of the
basket of agricultural products exported from
India.
04/Dec./2006 44
04/Dec./2006 45
Employment
 This industry provides employment to rural
poor as under:
 In cashew processing factories : 0.3 million
 In cashew farms : 0.3 million
 Of which:
 Women workers : 95% ie., 0.57 million
 Economically backward communities :
50% ie., 0.3 million

04/Dec./2006 46
INNOVATION
 Indian researcher have developed a cashew
nut Sheller at IIT kharagpur in 2005 for use
in a processing plant with cashew shelling
capacity of 100kg per hour.
 It is based on centrifugal forces. This forces
exerted by an impeller with a diameter of
26.5cm. RPM have been standardized to
3000 RPM for better shelling & prevent
vibrations in the machine.

04/Dec./2006 47
Cont.
 The CEPC has set up a Quality
Upgradation Laboratory & Technical
Consultancy Centre at Quilon,the
nerve centre of the Indian cashew
industry.
 The Quality Upgradation Laboratory
has the most modern state – of- the art
equipments procured from india and
abroad

04/Dec./2006 48
Cont..
 A new planting
method, which set
the trees directly in
the ground,
eliminating the
need for costly and
hard-to-find plastic
bags. (Mozambique)
 Organic Cashew

04/Dec./2006 49
Why process in india
 Better technology
 Inexpensive & semi- skilled labor
 High capacity to process
 Leader since beginning in processing
 India's cashew industry was the first to use
quality control for improvement of
performance
 India also has a long tradition and good
reputation as a high quality processor of
cashew.

04/Dec./2006 50
Cont..
 Lack of financing raw materials in
Mozambique
 Lack of buyers in Mozambique
 The ISO 6477 standard was
introduced in 1988 in India
 No national export brand
 Marketing constraint
 High rate of taxation in Mozambique

04/Dec./2006 51
The domestic market

 It appears that almost 50% of the kernels

produced in India are being sold on the
domestic market.

 But this market’s dynamics and major

players are as yet unexplored, as are the
linkages between domestic and
international markets.
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Export from India
2003-2004 2004-2005 2005-2006
Countrie Qty Value Qty Value Qty Value
s (M.T) (Rs.Crs) (M.T) (Rs.Crs) (M.T) (Rs.Crs)
U.S.A 48504 881.55 61546 1288.49 43149 958.33
Netherlan
ds 12237 215.03 15693 345.67 18736 408.82
U.A.E 6239 102.42 6690 148.23 8274 184.41
U.K 5392 95.61 7108 158.34 6238 140.88
Japan 5522 101.95 5047 111.21 4685 110.2
France 2444 43.61 3329 66.49 3470 75.79
Saudi
Arabia 2011 32.95 2998 61.55 2827 59.61
Spain 2198 41.11 2870 64.8 2648 61.09
Belgium 1769 33.88 2497 53.18 2378 54.48
Germany 1574 26.11 1966 42.39 1991 42.21
Russia 1413 22.09 2331 43.41 1990 38.77
Greece 830 15.57 1511 33.74 1859 42.61
C anada 1354 22.72 1540 31.39 1558 33.14
Italy 986 17.74 1119 23.72 1236 25.2

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Cont..
Australia 275 4.38 873 18.36 1114 25.29
Norway 890 15.9 1318 29.15 873 19.89
Kuwait 847 15.34 574 12.78 863 19.76
Hong
Kong 477 10.25 719 17.71 788 17.28
Israel 508 9.71 964 23.26 752 17.4

Singapore 513 9.24 510 11.6 694 13.61

Lebanon 561 11.28 655 14.95 470 9.61
Bahrain 439 6.82 362 7.08 393 7.8
Korea
Rep. 311 5.83 213 5.22 255 5.85
New
Zealand 332 5.58 201 4.46 204 4.62
Malaysia 40 0.69 62 1.39 191 4.05
Others 3162 57.13 3973 90.68 6505 134.17
Total 100828 1804.43 126667 2709.24 114143 2514.86
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Production Location in India

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Cashew fruit

04/Dec./2006 64
Current news
 In June 2005 Mozambique Govt.
unveiled a newly branded cashew nut
“ZAMBIQUE” for its first export sale to
a US buyer , Suntree.

 India Market share in cashew industry

has declined due to entry of Vietnam

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 International PLC
 Introduction Phase(1961-1977)
 Production locations
China
 Mozambique India
 Angola Malaysia
 Benim Sri lanka
 Cote d. ivoire Thailand
 Guineabissau Vietnam
 Kenya Brazil
 Madagascar Dominican Republic
 Nigeria El Savador
 Tanzania

04/Dec./2006 67
 International PLC

 Introduction Phase(1961-1977)
 Market locations

• United States over 50 %

• Netherlands (10%)
• Germany (7%)
• Japan (5%)
• United Kingdom (5%)

04/Dec./2006 68
International PLC
Introduction Phase(1961-1977)
 Competitive factors

 Skilled ,semi-skilled & cheap labor

 Availability of raw nuts
 Processing facilities & techniques

04/Dec./2006 69
International PLC
Introduction Phase(1961-1977)


 Production Technology

 No Technology was involved in this stage

 Manually done

04/Dec./2006 70
International PLC
 Growth Phase(1977-1999)
 Production locations
China
 Mozambique India
 Angola Malaysia
 Benim Sri lanka
 Cote d. ivoire Thailand
 Guineabissau Vietnam
 Kenya Brazil
 Madagascar Dominican Republic
 Nigeria El Savador
 Tanzania
 Indonesia
 Mexico

04/Dec./2006 71
International PLC
 Growth Phase(1977-1999)
 Market locations

 USA
 EUROPE
 CHINA
 JAPAN
 AUSTRALIA
 RUSSIA
 SOUTH AFRICA
04/Dec./2006 72
International PLC
 Growth Phase(1977-1999)
Competitive factors


 Skilled and cheap labors

 Production costs
 Working capital rate
 Quality & reputation
 Processing Techniques

04/Dec./2006 73
International PLC
 Growth Phase(1977-1999)
Technical factors


 Roasting & shelling was done

mechanically
 Mechanical technique were also
involved during separation, pre-grading
& drying

04/Dec./2006 74
International PLC
 Prolonged Phase(2000 onwards)
 Production locations
 Mozambique India
 Angola Malaysia
 Benim Sri lanka
 Cote d. ivoire Thailand
 Guineabissau Vietnam
 Kenya Brazil
 Madagascar Dominican Republic
 Nigeria El Salvador
 Tanzania Togo
 Indonesia Senegal
 Mexico Ghana
 Dominican Republic Burkina
faso
Honduras
 04/Dec./2006 75
 Peru
International PLC
 Prolonged Phase (2000 onwards)
 Market locations
 USA
 CHINA
 JAPAN
 AUSTRALIA
 NETHERLANDS
 FRANCE
 RUSSIA
 SOUTH AFRICA
 AND OTHERS

04/Dec./2006 76
International PLC
 Prolonged Phase (2000 onwards)
Competitive factors


 Modern Lab facilities

 Govt. schemes
 Working capital (Investment)
 Quality
 Brand
 Skilled & semi-skilled labors

04/Dec./2006 77
International PLC
 Prolonged Phase (2000 onwards)
 Technical factors
 State-of- the-art laboratories (India) to
determine the nutrition content of cashew &
quality upgradation
 Sheller developed by IIT-ans for better shelling
capacity

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