Snacking on cashews may become a costly affair in the upcoming Diwali season as the global prices for kernels and raw nuts go through the roof.
Producing countries are experiencing a crop shortage due to El Nino with prices of kernels in India reaching $4 per pound and nuts moving to $1,900-2,000. The rates were around $1,200-1,300 in April-May, said Pratap R Nair of the Kollam-based Vijayalaxmi Cashew Company.
The festival demand in India kicks off by the end of July. Cashew consumption in India is growing at 7 per cent CAGR with more disposable income and consumption of the nut daily for health benefits. The market is witnessing steady growth due to rising demand for convenient healthy snacks, he said, adding that the International Nut & Dried Fruit Council (INC) is running a promotional programme in India for nuts and dried fruits at a cost of 2,00,000 Euros annually.
The Indian cashew market’s size, according to industry sources, is estimated at $2.40 billion in 2024 and is expected to reach $2.9 billion by 2029.
Output down 25% globally
Nair, who is also a member of the Board of Trustees of INC, said there is a significant drop in raw cashew production in all growing regions of India and around 25 per cent decline in other producing countries, such as Vietnam and Africa. 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. Due to adverse weather, INC forecasts a 7 per cent global decline in raw cashew production.
Because of the shortage, he said Ivory Coast banned cashew exports to protect its local industries and the move has further fuelled the prices due to reduced quantities. Later, they revoked the ban, but the shortage in the market is still visible.
J Rajmohan Pillai, Chairman of Beta Group which owns the brand NutKing said the global cashew industry faces significant challenges due to price fluctuations, supply shortages, production decline on adverse weather.
Quoting a study report, he said the global cashew market is estimated at $7.82 billion in 2024 and is projected to reach $9.20 billion by 2029 with a CAGR of 3.31 per cent. As of July 1, 2024, the price of W320 grade cashew nuts ranges from $6.6 to 6.9 per kg FOB.