Term paper

on
The Indian Cashew Processing
Industry
 Prepared by:
• Anima Hoque 2008-1-10-145

• Omar Al Faruque 2008-1-10-106

• Md. Abu Syeed 2008-1-10-098

• Al Hadee Md. Takiullah 2008-1-10-052

• Farahnaz Zarrine 2008-1-10-065

 Contents
• Overview
• Theory based analysis of historical
production
• Factors that threat the future
• Holding on to future competitiveness
Overview of The World Cashew Industry

Global Statistics of the Industry

Category Values
Total World Production 22.5 lakh tons per annum
Global Land Usage 35.1 lakh hectares
Total No. of Countries in the Industry 32
Overview of The World Cashew Industry(contd)

• Major Consumers Of the Nut:

– United States of America
– European Union
– India

•Major Exporters and Competitors of Cashew(2009):

Country Amount (Cartoons)
India 4.5 million
Vietnam 2.3 million
Brazil 1.75 million
Overview of The World Cashew Industry(contd)
• Major Importers:
• United States of America (43149 tons)
• Netherlands (18736 tons)
• United Kingdom (6238 tons)
• United Arab Emirates (8274 tons)
• Japan (4685 tons)
• France (3470 tons)
• Saudi Arabia (2827 tons)
• Spain (2648 tons)
• Russia (1990 tons)
(There are more countries)
Overview of The World Cashew Industry(contd)

• India is currently leading exporter of the

cashew nut, but in the near future Vietnam
might take over

• The cashew producers are trying to form

an alliance.
 Historical Production of Cashew
Tree Products

• Trade theories to explain the historical

production:
– Product Life Cycle Theory (PLC)
– Global Competitive Advantage Theory
 Historical Production of Cashew Tree
Products (Contd)
Product Life Cycle theory:
In the Introduction stage:

 Cashew nut is not the innovation rather it’s processing and it

was done by India in 1920s.

 Demand in India was high so the most processed nuts were

sold in India and exported to USA and UK as well.

 Initially India maintained a virtual monopoly and exporting till

mid 1970s.
 Historical Production of Cashew Tree
Products (Contd)
In the Growth Stage:

 Demand in USA and UK went extensively high, that resulted a

shortage and India could not meet the demand.
 Hence, started importing from other countries
 Mozambique became the world’s largest grower and
processed cashews by mid 1970s.
 Brazil was another competitor for India.
 India developed cashew processing machine.
 The Indian firms were not using much fertilizer to keep the
flavor intact as result they produced high-quality nuts which
had good flavor.
 Historical Production of Cashew Tree
Products (Contd)
Global Competitive Advantage
The Four Components of the Theory:
 Historical Production of Cashew Tree
Products (Contd)
Global Competitive Advantage(cont)

• Demand Conditions:
– Local Demand

• Factor Conditions:
– Plantations, quality workers

• Related And Supporting Industry:

– Research Organization, Machines, Bakery

• Firm Strategy, Structure and Rivalry:

– Imports, Labor Intensive, Local competition
 Factors threatening India’s future
competitive position in cashew nut
production
• Development of superior nut extracting machine

• Suppliers can start processing on their own

• Brazil may start using less fertilizer, improving the flavor of

their nuts

• Growing export rate of Vietnam

• Unfavorable climate conditions

 Holding On To Future Competitiveness

• Sell Value

• Diversified Product Line

• Improved Technology
 Holding On To Future Competitiveness
(contd)

• Reduce Dependency

• Increase production and maker

skimming

• Innovative Products