For cashew lovers, It could turn out to be a costly Diwali as rising kernel and raw nut prices could make munching or gifting the nut a pricey affair.
Cashew kernel prices in India reached $4 per pound and raw nut prices are hovering between $1,900 and $2,000 a tonne, up from $1,200-1,300 six months ago. Traders mainly attribute the surge to crop shortage in producing countries due to El Nino.
J Rajmohan Pillai, Chairman of Beta Group that owns the brand NutKing, said the availability of raw cashew has dropped 7 per cent this season because of a global decline in production and export restrictions in many countries including Ivory Coast, the world largest raw cashew producing country.
Besides, there is a significant drop in raw cashew production in all growing regions of India. The scarcity could drive up prices. It is expected that the price will increase by 3 to 5 per cent depending on the quality of the cashew, the broken cashews are expected to rise more because of heavy demand from the sweet and dessert industry.
Rising demand
The Indian cashew market size is estimated at $2.40 billion in 2024 and is expected to reach $2.9 billion by 2029, Pillai said. Cashew consumption in India is growing at 7 per cent CAGR with more disposable income and consumption of the nut daily for health benefits.
With festival demand in India kicking off by the end of August, he said the market is witnessing steady growth due to rising demand for convenient healthy snacks. The sector expects that the prices will further firm up in the coming months and is likely to cool off with the start of the next harvest season by March 2025.
As the festive season approaches, consumers can expect a significant rise in cashew prices. This surge is primarily attributed to a combination of factors such as increased demand and limited supply, he said.
Insect damage
Pratap Nair, Board memberof the International Nuts and Dried Fruits Foundation, said raw seed prices continue to remain high due to worldwide crop shortage. Now, the Indonesian crop has just started arriving and there are reports of extensive insect damage which will affect this year’s crop. Hence, supply will be very tight until the next season beginning April next year.
Nair, who is also the managing partner of Vijayalaxmi Cashew Company - one of the largest cashew exporters from India, said kernel prices are likely to remain firm in the domestic market with some upswing for the high season festival and wedding which is now on. However, Indian consumption remains robust despite higher prices, he said.
According to Pillai, the promotional programme of many food companies promoting the taste and health of the nut and dried fruits is also propelling the demand.