CHAPTER - 1 INTRODUCTION

1.1 INTRODUCTION Cashew is a tropical evergreen tree known for its seed worldwide. It flowers once a year between the month of November and January. The sweet flavored nutriest feature of cashew nut like seeds are obtained from the bottom of the false fruit of this tree, which is termed as cashew apples. The Cashew nut can be seen sitting smugly under the soft belly of the cashew' apple. Cashew seed is the food product. It is placed third among the largest consumed tree nuts in the world. The commercial production of cashew seed is done in more than 32 countries of the world, mostly in hot and dry agro climatic conditions suitable for cashew cultivations. Now it has become the number one crop in the world. Cashew was introduced in Goa by Portuguese during 16 th century. Today this crop is one of the major cash crops of Goa covering an area of 512000 hector. Since its introduction, cashew has very well adapted to Indian climatic condition and it is grown in the east and west coastal region of India. Later it spread as popular crop to other part of India. Common names of the cashews and its products are cashu, caju, acaju, acajou, anacarde, cacajuil, pomme, Maranon, jocote Maranon, merey, jambu, cashew apple, cashew nut and cashew kernel etc. In Mozambique, the maconde tride refer to it as

the Devil Nut. It is offered at wedding ceremonies as a token of fertility and is considered by many to have aphrodisiac properties. The cashew plantation is mainly to control soil erosion and to increase forest cover. It also helps to reduce the effects of cyclone and tidal waves. The cashew is mainly considered as a employment provider to socially and economically backward communities .The cashew plantation helps to utilize the vast stretches of vast land in the country. Besides earning more foreign exchange, they facilitate economic growth. 1.2 SCOPE OF THE STUDY India is the largest producer, processor and exporter of cashews in the world. In India, cashew export accounting into 60% of worlds total market. Compared to previous year export performance there is a decrease in volume of export in the current year. The cashew industry faces lots of problems. So the study was undertaken to know about the problems faced by cashew exporters. 1.2 NEEDS FOR THE STUDY Cashew industry is the one of the foreign exchange earning source in India. Now the cashew exporters face lots of problems like tax problems, competition, shortage of raw cashew nut, fluctuations in exchange rate and trade dispute. 1.4 OBJECTIVES OF THE STUDY

To examine the problems faced by cashew exporters from India.

 To study the overall performance of the cashew industry in India. To assess the growth of cashew export from India.

To understand the year wise and country wise export from India. To suggest suitable recommendation for improving the performance of the industry.

1.5 RESEARCH METHODOLOGY RESEARCH DESIGN:As a first stage the search on literature about concept, method of utilization, its proceedings all that require a descriptive analysis. The opinions were collected through questionnaire. The results were analyzed by applying tools and result has been interpreted. So the study was analytical research. SAMPLE DESIGN:The study was conducted in Kerala. The exporters list was collected from the website www.cashewindia.org. SAMPLE SIZE:A sample of 50 exporters was taken for the study. Among them, 48 samples are collected from Kollam district and remaining samples collected from Cochin district.

TOOLS APPLIED:The data were analyzed through the application of various statistical tools like chi- square test and simple percentage analysis. Chi-square Test The formula is
2

= (O-E)2 E

Where

O = Observed frequency E = Expected frequency

1.6 DATA COLLECTION TECHNIQUES The study based on both primary and secondary data. Primary data were collected through structured questionnaire and secondary data from annual report of cashew export promotion council of India, books, magazine, journals, and newspapers and through internet. 1.7 LIMITATION OF THE STUDY

The Sample size was limited.

Time for the study was less. The exporters hesitated to give the correct opinion on the questions.

The unwillingness of the exporters provided less information.

1.8 CHAPTERISATION:-

CHAPTER I:

Introduction, Scope of the study, Need for the study, Objectives of the study, Research methodology, Data Collection, Limitations of the study.

CHAPTER II:

Indian Products, Council

Cashew Cashew of India,

Industry, Export Cashew

Cashew Promotion and its

Importance, Major problems faced by cashew exporters CHAPTER III: CHAPTER IV: CHAPTER V: CHAPTER VI: Review of Literature Data analysis & interpretation Findings & Suggestions Conclusion Bibliography Appendix

CHAPTER II INTRODUCTION
2.1 INDIAN CAHEW INDUSTRY India is the largest producer, processor, exporter, and the second largest Consumer of cashew kernels in the world. Cashew ranks second in agriculture and horticulture commodities exported from India. The country is earning 25,000 Cores through the export of cashew kernels yearly. Over 65 per cent of the world cashew kernels are accounted by India. Today, India dominates the world cashew market. Over 685,000 hectares are under cashew cultivation here. With an average annual export worth US$ 564 million, India meets two third of world demand for cashew. USA is the largest buyer of Indian cashews. It is developed only in 20th century. Indian cashews are consumed in as many as 60 countries all over the world, the major markets being the United States, the United Kingdom, Japan, Netherlands, Australia, Canada, Germany Hong Kong, Singapore, New Zealand and Middle East countries. Vietnam is the largest producer of raw cashew followed by India and Brazil. India dominates and leads the cashew kernel production list. There are 32 countries successfully cultivate cashews. Among these Vietnam, India and Brazil are the top three producers and processor of cashews. Cashew Kernels are facing stiff competition from other edible nuts like almonds, walnuts,

pistachios, macadamia nuts and hazel nuts. India also facing competition from Vietnam and Brazil. India has 24 per cent of the global area under cashew but contributes only 19 per cent of global production of global production. Whereas,Vietnam with 10 percent of the global area contributes an average yield of 2.8 tone per hectare as against Indias around 800 kg. India was the first country started to exporting manually processed cashew nut. These processing Operations were performed by experienced skilled workers. In general Indian processing system involves lower investment and variable costs and achieves far efficiency in terms of kernel. However this system requires large number of experienced workers who work at unhealthy level of exposure to CNSL. Thus cashew has the potential to increase the income of poor producers. To create employment opportunities during harvesting and processing and to increase exports. 2.1.1 DOMESTIC PRODUCTION OF RAW CASHEW NUT:India has always been a major player in the production of cashew. It is the largest producer of raw cashew in the world. The major states in India in which cashew has been cultivated are

Kerala Karnataka Goa

Maharashtra Tamil Nadu Andhra Pradesh Orissa West Bengal The production of cashew in India has been fluctuating

during the recent years. In India, Maharashtra produces more cashews compared to other states. Poor qualities of cashews are grown in some states, which is due to the wrong harvesting techniques. Maharashtra produces 31% of total production from India. Kerala has been standing at fourth position. They produce 11% of total production. According to the estimates by the Directorate of Cashew nut & Coco Development, the production of raw cashew nuts in India during 2009-2010 was 6,13,000 M.T. as against the estimate production of 6,95,000 M.T. during 20082009. The raw cashew nut requirement of cashew processing industry in India is estimated to be over 12 lacks M.T. per annum and the availability is about half of this. The balance is met by import from other producing countries. The Govt. is taking in this direction by promoting replantation, expansion of new cultivation etc. The Kerala Govt. has set up a special agency (Kerala state agency for cashew cultivation) for promoting cashew cultivation. The major trading canters in India are: Palasa Cochin

Quilon Magalore Kollam The Government has contemplated various

developmental measures to attain self-sufficiency in the production of raw cashew nuts in the States. The Directorate of Cashew-nut & Cocoa Development (DCCD), Ministry of Agriculture has implemented the measures under National Horticulture Mission and in the North - Eastern States under Technology Mission. New plantation development and replanting of old senile and uneconomical cashew gardens with high yielding varieties are the major activities of the States for increasing production of cashew with supporting programmers like establishment of nurseries, frontline technology demonstrations, popularizing utilization of cashew apple, publicity for the promotion of crop, pest and disease management, human resources development, promotion of integrated nutrition management. A scheme on up-gradation of existing old cashew processing units in India has been sanctioned under National Horticulture Mission (NHM) to be executed in the states of West Bengal, Orissa, Andhra Pradesh, and Tamil Nadu at a total cost of Rs.56.00 lacks during the year 2010-11. Recently, the Govt. has received a request for financial assistance for International brand building & new market development in Russia and China from the Kerala State Cashew Development Corporation Ltd.

2.1.2 IMPORT OF RAW CASHEW NUT:Due to the wrong harvesting technique and aging of cashew tree adversely affect the domestic production. Now Indias domestic production is around 7 lack tones while their processing capacity is about 14 lack tones. Hence India has to depend on imported raw cashew nut for more than half of the requirement. Four tones of raw cashew nut need to be processed for producing one tone of cashew kernels. India mainly import raw cashew nuts from African countries like Ivory Coast,Guinea Bissau, Tanzania, Indonesia, Ghana, Nigeria and Mozambique. There is a rise in imports of raw nuts which had gone up by 24.26 per cent in 2009-10 from the previous fiscal. India imported 7, 52,854 tones of raw nuts valued at Rs 3,037.35 core in 2009-10 as against 6, 05,850 tones valued at Rs 2,632.41 core in 2008-09. The unit import price for raw cashew nut was Rs. 40.34/ kg. During 2009-10 as against Rs. 43.45/kg during the previous year. The import value increased by 15.38 percent while the unit import price by 7.71 per cent. 2.1.3 EXPORT PERFORMANCE:From India, cashew kernels and cashew nut shell liquid/ cardanol are mainly exported to different countries of the world. Compared to the previous year export performance of India there is a fall in during 2009-2010, due the global recession. As per the export- import statistics published by DGCI&S, Kolkata, the share of agricultural products in the total

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export earnings of the country during 2009-10 was 5.56% and cashew kernels ranked seventh among contributing 5.59%. The total export of cashew kernels from India during 2009-10 was1,08,120 M.T valued at Rs. 2905.82 cores (US$ 613 Million).It showed a decrease in comparison with the export of 1,09,522 M.T. cashew kernel valued at Rs. 2988.40 corers (US $ 650 Million) during 2008-2009. There is a 1.28% decrease in quantity. The unit price of cashew kernels was 268.76 per Kg. compared to Rs. 272.86per kg during 2008-2009 recording a decrease of 1.5%. The export of Cashew nut Shell Liquid (CNSL) from India during 2009-2010 was 9,748M.T valued at 24.12 corers (US$ 5.08 million). It showed a increase in comparison to the export of 9,099 M.T. of cashew nut shell liquid valued at 26.06 corers (US $ 5.67 Million) during 2008-2009. There is a 7.13% increase The unit price of CNSL/ Cardanol during 2009-10 was 24.74 per Kg. compared to Rs. 28.64 per kg during 2008-2009 recording a decrease of 13.62%.USA, UAE, Netherland and Japan continued to be the major buyer. Export to American Zone was 29%, European Zone 30%, West Asia and Africa 29%, South East and Far East Zone 10% and oceanic zone 2%. During the last five years, exports declined 10.5 per cent and Vietnam took advantage of it. Its export increased 67 per cent during this period and is now claiming to export 50 per cent more than India.

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2.1.4 TRANSPOTATION:There are regular shipping facilities from India to all ports of the world. Major shipments from India take place through Cochin port. Other ports are Tuticorin, Mangalore, Madras and Bombay. Regular services of container ships are available from Indian ports on India-USA, India-UK/Continent, India-Australia, India-Japan, India-Middle East and India-Singapore route. For India the cashew industry has economic and social significance as the Industry earns valuable foreign exchange for the country and also provides employment to lacks of people. In cashew processing factories, over 95% of the workers are women from lower strata of the society, mainly belonging to socially and economically back ward communities. Thus the industry has to play a leading role in social and financial upliftment of the rural poor.

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2.2

CASHEW PRODUCTS
Three main cashew products are traded on international

market:- raw cashew nut, cashew kernels, cashew nut shell liquid (CNSL) . A fourth product, the cashew apple is generally processed and consumed locally. But now cardanol could be exported. The cardanol continued to be in the list of items under Minor Forest Produce. 2.2.1 RAW CASHEW NUT:The raw cashew nut is the main commercial product of the cashew tree, though yield of cashew apple are 8 to 10 times the weight of the raw cashew nut. It is attached to the lower portion of the cashew apple. The Cashew nut can be seen sitting smugly under the soft belly of the cashew' apple. Raw cashew nut are either exported or processed prior to export. Processing of raw nuts releases the by product CNSL that has industrial and medical applications. The skin of nut to high in tannins and can be recovered and used in the tanning of hides. The fruit of cashew tree that can be made into a juice with a high Vitamin C contents and fermented to give a high proof spirit, 2.2.2 CASHEW KERNELS:They are obtained through the processing of raw cashew nut. It is estimated that 60% of cashew kernels are consumed in the form of snacks, remaining 40% are included in confectionary. India is the largest producer and exporter of cashew kernels in the world over 65% of world export of cashew kernels is accounted by India.

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Cashew Kernel intact from the shell and grading them carefully to superior standards required by top food companies all over the world. The un-shelled nut is steamed to soften the shell and carefully cut open. The kernel is dried to loosen the skin which is then peeled off. Whole kernels are graded by size and color. Pieces are chopped into required sizes. The consumers are interested in quality and health aspects of foods. One major factor affects the consumption of cashew kernels in world market is competition from other tree nuts. Specifications:Standard specification for Indian cashew kernels for export has laid down by the government of India under Export (quality control and inspection) Act 1963. Grades:Cashew Kernels are graded into white/scorched wholes, pieces, splits, butts etc. depending on the shape, size & colour of the kernel. The Govt. of India Act prescribes 33 different grades of cashew kernels. Only 26 grades are commercially available and exported. They are: W - 180, is the ' King of Cashew ' - They are larger in size and very expensive. W - 210 are popularly known as ' Jumbo ' nuts. W - 240, it is an attractive grade which is reasonably priced.

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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. Scorched wholes are the another grade of cashew kernels, which have a slight brown color due to longer roasting. They have all anther characteristics of white kernels and the same nutritional quality.

1. CASHEW KERNELS WHITE WHOLES

White Wholes - 210 White Wholes - 180

White Wholes - 240

White Wholes - 320

White Wholes - 450

White Wholes - 500

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2.

CASHEW KERNELS - SCORCHED WHOLES

Scorched Wholes(SW)

Scorched Wholes (SW) - 180

Scorched Wholes(SW) - 210

Scorched Wholes (SW) - 240

Scorched Wholes (SW) - 320

Scorched Wholes (SW) - 450

Scorched Wholes - 500

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3.

CASHEW KERNELS - DESERT WHOLES

Scorched Wholes Seconds (SSW)

Dessert Wholes(DW)

4. CASHEW KERNELS - WHITE PIECES

Splits (S) Butts (B)

Large White Pieces (LWP)

Small White Pieces (SWP)

Baby Bits(BB)

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5.

CASHEW KERNELS - SCORCHED PIECES

Scorched Butts (SB)

Scorched Splits (SS)

Scorched Pieces (SP)

Scorched Small Pieces (SSP)

6.

CASHEW KERNELS - DESSERT PIECES

Scorched Pieces Seconds (SPS)

Dessert Pieces (DP)

2.2.3 CASHEW NUT SHELL LIQUID (CNSL) :-

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Cashew nut shell liquid is a co product of cashew nut. It is a dark fluid comprised of different unsaturated alkenyl substituted phenol. The oil is being extracted from cashew shell, which is the pericarp fluid of cashew nut. This is purely a natural product and no chemical is added. The CNSL has got wide range of applicability for making raw materials for automobile brake lining such as liquid resign, PF resign and Cashew Friction Dust (CFD). It is also used for manufacture of paint and varnishes. The cashew nut shell liquid is an important raw material for a number of polymer base industries like paints and varnishes, industrial and decorative laminates, brake linings and rubber compounding resin. CNSL is used commercially as a phenolic raw material for the manufacture of certain resin and plastic. In particular, it is used as a friction modifier in the manufacture of industrial belting and clutches. It is also used for reinforcing synthetic rubber and in laminating or impregnating material where oil acid resistance is required. Other uses include the manufacture of lacquer, electrical insulation materials, etc Advantages: Improved Flexibility and reduced brittleness,

Solubility in Organic Solvents, Improved Process ability, Resistance to 'Cold Wear', Good Electrical Resistance, Better Water Repellence, Improved alkali and acid resistance, Compatibility with other polymers, Antimicrobial Property, Termite and Insect Resistance.

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2.2.4 CARDANOL:Cardanol is a naturally occurring phenol manufactured from cashew nut shell liquid (CNSL), a by product of cashew nut processing. Distillation of CNSL under reduced pressure gives cardanol. The residue will be rich in cardanol which is conveniently used in friction dust for brake lining, also in rubber compounding formulation. Cardanol phenol resin was developed in the 1920s by Mortimer T. Harvey a student of Columbia University. Cardanol is a phenol obtained from anacardic acid, the main component of CNSL. Cardanol based resin posses an outstanding resistance to acid and alkalies. Chlorinated cardanol is reported to have good insecticidal, pesticidal and germicidal properties. Co-polymer of cardanol with other film forming material give good quality lacquer giving golden yellow films both of drying and baking type.

2.3 THE CASHEW EXPORT PROMOTION COUNCIL OF INDIA

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The Cashew Export Promotion Council of India (CEPC) was established by the Government of India in the year 1955, with the active cooperation of the cashew industry with the object of promoting exports of cashew kernels and cashew nut shell liquid from India. By its very set up, the Council provides the necessary institutional frame-work for performing the different functions that serve to intensify and promote exports of cashew kernels and cashew nut shell liquid and allied products. The council undertakes detailed studies and collects trade information and other particulars relating to the market potential of cashews and makes them available to the exporters. It also deals with the trade enquiries received from various parties and passes them on to its members. The global trade information on cashew and cashew products is updated on continuous basis. The Council also extends its good offices in settling complaints amicably in the matter of exports/imports either on account of quality and /or variation in fulfillment of contractual obligations. As on 31st March 2010 the Cashew export Promotion council of India had 183 ordinary Members, 9 Government Nominee making the total membership to 192. The council sponsors trade delegation and study teams from time to time for on the spot study of various markets abroad. These teams submit their reports on their return, on the markets visited its potential and trends which serves as reference

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material and also provide the basis for necessary follow up action. The market information collected by these teams Delegations is disseminated to the trade industry. The council participates in specialized international Food fairs and exhibitions and general fairs abroad directly as well as through the Trade promotion Organizations of Govt. of India. As the Council represents the whole industry, it arranges display of products received from the members free cost. The enquiries received are circulated amongst the members for their contracting the parties abroad for business negotiations. During the year 2009-2010, the council participated in five international exhibition viz. Fancy Food show (New York), Africa Big seven Exhibitions (Johannesburg), Fine food (Australia), India show (st.Petersburg), ANUGA (Cologne). The council had disbursed a sum of Rs. 20.60 lacks to member exporters under MDA assistance for participating in international fairs and trade delegations. The Council publishes two periodicals viz. Monthly 'Cashew Bulletin' and Quarterly 'Indian Cashew Journal' which contains market news, country profiles, Government's notifications and circulars, export and import statistics, commodity prices, news and notes on cashew etc. Apart from this, the Council also publishes Cashew Grades Folder , Delegation Reports, Statistical Reports, Cashew Recipe Books, Directory of Indian Cashew Exporters, brochures, booklets on cashew kernels, cashew nut shell liquid etc.

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The council has sponsored many research projects for improvement of packaging , developing new products out of cashew, etc in association with reputed research institutions like Indian Institute of Packaging, Central food Technological research Institute, regional Research Laboratories, etc. The council had entrusted Research and development project with Central Food Technological Research Institute, Mysore for developing a technology for commercial manufacture of value added products like cashew butter, cashew kernel oil etc. A research project to develop of transparent resins from cashew nut shell liquid is being undertaken by Regional Research Laboratory, Trivandrum, for the council. The council has set up CEPC Laboratory and Technical Division at Quilon. The Laboratory renders analytical services to exporters for ensuring the quality of their products. National accreditation board for Testing and calibration laboratories (NABL). Under the Department of Science and Technology, Government of India has granted accreditation in the fields of Chemical Testing Biology Testing to the Laboratory, This accreditation is recognition of the technical competence of the Laboratory acquired during the years. The Laboratory also extends consultancy services to exporters for technology up gradation, Modernization of factories, adaptation of HACCP/ISO 9000 quality systems in cashew factories etc. The Training Centre attached to its Laboratory at Quilon imparts training to cashew processors, workers in

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processing factories, etc. on good manufacturing practices, maintenance of hygienic standards, etc. In addition to the above the council also undertakes publicity abroad with a view to projecting the Product Image which serves to focus attention on the high quality and superiority of Indian cashews. With regards to the development of cashew processingexporting sector, the council provide grant- in- aid to exporters under Five year plan Scheme for projects like Modernization of factories, Technology transfer, improving quality by adopting ISO/ HACCP quality systems acquiring latest packaging system etc. 2.3.1 BENEFITS PROVIDED BY CEPCI TOWARDS MEMBER EXPORTERS Export of cashew kernels and CNSL & cardanol:

Export of Cashew kernels, CNSL AND Cardanol could be carried out the member of CEPC HAVING A IE code. Cardanol continued to the included in the list of items under Minor Forest Produce.

Import of raw cashew nut:

During 2009-2010 the member of CEPC could import raw cashew nut under OGL

Export incentives:-

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 The DEPB rate for export of cashew kernels continued at 1.5%

Duty draw back rates remained at 1% of FOB value. Vishesh Krishi Aur Gram Upaj Yojana (VKGUY) for cashew and CNSL during 2009-2010 at 5% .This helped the industry to survive in spite of global recession.

Production development:

Since the shortage of raw cashew nut continued to be a serious problem of Indian cashew industry, the council continued its effort to persuade the authorities concerned to implement schemes for increasing production of raw cashew nut.

Sales Tax/ VAT / CST/ Service Tax: The council continued to pursue with the Central/ State Govt. to exempt or reduce the rate of VAT for raw cashew nut and cashew kernels. CST rates continued unchanged The council has been representing to the Govt. to exempt cashew export from purview of service tax. Assistance for Export Promotion Activities to Exporters

Five Year Plan Scheme :The Govt. of India, Department Of Commerce has accorded approval to the Export Promotion Scheme of the

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Cashew Export Promotion Council of India to implement a scheme Modernization & Diversification Scheme. This scheme extending financial assistance to member exporters for upgrading and improving their processing and manufacturing facilities. During 2009-2010, the council disbursed Rs. 5.00 Crs to 380 exporters under this scheme. This Scheme has following four components. They are:

Process Up gradation / Modernization of Cashew Processing Units.

Setting up facilities for value addition / consumer packing of Cashew kernels.

Adaptations of new packaging system.

Implementation of internationally quality systems like ISO, HACCAP, ORGANIC etc.

Market Development Assistance (MDA) Scheme:During 2009-2010, a sum of 20, 56,158/- was distributed to 35 member exporters as grant towards international fairs, trade delegations etc under this scheme.

2.4 CASHEW AND ITS IMPORTANCE

2.4.1 Cashew Wood: The cashew tree is known for producing wood with high levels of resin. The resin from the cashew wood is

26

made into a varnish for books wood and floorings which is to prevent deteriation from ants and other home-invading insects. 2.4.2 Raw Cashew Nut: The raw cashew nut is not edible.

However through processing, the caustic oil is removed from the cashew nut shell. This caustic oil is referred to as Cashew Nut Shell Liquid (CNSL) and is located in the tissue between the two walls of the nut shell. CNSL has many industrial uses which include automobile and airplane brake fluid, adhesives, paints and varnishes, insecticides, electrical insulation, and anti-microbials 2.4.3 Cashew Nut Kernel: Cashew nuts contain high degree of proteins, fats and vitamins. Cashew kernels contain 21 % of vegetable proteins. Nutritionally they stand at par with milk, eggs and meat. It also contains a high concentration of much needed amino acids. Indian cashews are natures proven finest diet. Its all time all place snack. It is a storehouse of nutrients. It contains protein 21%, fat 47%, moisture 5.9 %, carbohydrates 22%, phosphorus 0.45%, calcium 0.05%, iron 5% for every 100 gm and other mineral elements. They protect human nervous system. Cashew nut consumption is also recommended for diet and weight loss. Cashew nuts have a high energy density and high amount of dietary fiber, both which have been attributed to a beneficial effect on weight management. Cashew nut kernel contains 47% fat, but 82% of this fat is unsaturated fatty acids. This is important because no dietician will

27

prescribe a saturated fat packet to any one due to its high cholesterol content. Unsaturated fat eliminates the possibility of, and actually lowers, the cholesterol level in blood. The most prominent vitamins in cashew are Vitamin A, D and E. These vitamins help assimilate the fats and increase the immunity level.Cashew comprises a surprising spectrum of vitamins and Amino acids in the right proportions. The percentage of Arginine is 10.3, Histidine 1.8, Lysine 3.3, Tyrosine 3.2, Phenylalamine 4.4, Cyctine 1.0, Methinonine 1.3, Valine 4.5. 2.4.6 Medicinal Uses: There are many medicinal uses of cashew leaves, bark, and juice from the cashew apple. The cashew tree's leaves and bark as well as the popular cashew apple possess herbal health benefits that include killing bacteria and germs, stopping diarrhea, drying secretions, increasing the libido, and reducing fever, blood sugar, blood pressure and body temperature. Cashew bark teas were used to stop diarrhea while the caustic shell oil was used to treat skin infections, warts, intestinal worms, and parasitic larvae beneath the skin. Teas and fruit juices from the cashew apple and leaves are known to have antimicrobial, anti-inflammatory, astringent, diuretic, hypoglycemic, and other medicinal properties. The active ingredients in the teas and juices are thought to be tannins, anacardic acid, and cardol. Modern uses of shell oil and fruit juice include facial peels and scalp conditioners and shampoos. The cashew apple has also been a long time nutrional supplement as it contains up to 5 times more vitamin C than citrus and strawberries.

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2.5

MAJOR PROBLEMS FACED BY CAHEW EXPORTERS

Indian cashew exporters are facing number of

problems in the stage of procuring raw materials, production and exports etc. the major problems faced by cashew exporters includes acute shortage of raw cashew nuts, fluctuation in exchange rate,

29

lack of infrastructural facility, competition from Vietnam and difficulties in sourcing funds etc. MAJOR PROBLEMS 1. Shortage of Raw Cashew Nuts

Shortage of raw cashew nut adversely affects the export of cashew product. In India Domestic production of cashew has been fluctuating during the recent year. This is mainly due to the inclement weather and aging of cashew tree. This would drop the productivity. Apart from the use hybrid variety, new systematic and scientific method should be used. The idea of replantation programme and organic cashew farming can enhance the domestic productivity. Now, Indias domestic productivity is around 7 lacks. While their processing capacity is about 14 lacks tones. So India has to depend on imported raw cashew nuts.

2.

Exchange rate fluctuation

The exchange rate fluctuation directly affects the profitability of the exporting companies. Since the invoicing is done by the companies against an assumed fixed rate. When the domestic currency weakens against the foreign currency the profitability is eroded. The purchase agreement is signed for a

30

period of three to five years. For the firm most of the contracts are fixed for term of three years.

3.

Infrastructure

The export of cashew product requires shipments from airport and sea ports. The Poor infrastructure in the Indian Scenario creates logistical problems. To agreement export infrastructure is more important. The warehousing and storage facilities are not adequate and the standards are very poor when compared with international parameters. Most of the airports are not connected to international cities. The rail net works is inadequate to serve the transportation requirements of agro commodities. This results in higher lead time for procurement and cause delay in delivery.

4.

Competition

Indian exporters face stiff competition from countries like Vietnam and Brazil. Productivity of these countries is more compared to productivity of India. These countries using new modernized systematic and scientific method. Production capacity of Vietnam is more than that of India. This is because the usage of high yielding variety crop, their adequate harvesting technique, storage and ware house facilities. Vietnam as a major exporter of

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raw cashew at competitive price .The Govt. of these countries gives various concession to the cashew export community. The tariff was imposed by union Govt. for the Indian exporters. To increase the economies of scales they enable to offer product at lower price.

5.

Financial problems

The cashew industry not has sufficient financial capacity. The bank and financial institutions are providing few amounts of loans and advances at high rate of interest basis. At that bank and financial institutions are ask for high securities and not giving this loans and advances at correct time. This lead to shortage of production. Some banks unnecessarily delaying for opening L\C. This type financial institutional rules and procedure are very risky. Today cost of production is very high .so the exporters required huge amount of finance. Especially the small exporters are highly faced in this problem. The govt. spent some amount to cashew industry, but this amount is not sufficient for all exporters in India.

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CHAPTER - III REVIEW OF LITERATURE

Dependence on Import of raw cashew nut increases (Business Line April 5, 2010) India's dependence on overseas sources for the raw material has become a perpetual phenomenon and is growing year after year. The processing capacity of the industry is claimed to be around 12 lack tones a year. Exports have not been showing any increase in the past couple of years. Exploiting the growing domestic demand of cashew, a good quantity of kernels processed from the imported RCN is sold at higher prices in the domestic market. The price is almost double that of those in overseas outlets. Overseas consumers are provided good cashew kernels cheap at the expense of the domestic customers. Imports of huge quantities of raw nuts often deprive the growers in the country of good prices, which makes the crop unattractive.

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Increasing the indigenous production is the only solution to this problem and that appears to be possible only through scientific and systematic methods to bring more areas under the crop, apart from growing high yielding varieties. For achieving this target, there should have to be an establishment like the Commodity Boards for Rubber, says Dr Abdul Salam, an expert on cashew and a senior faculty with the Kerala Agricultural University. Import of Raw Cashew Nuts to Continue ( Business Line April 6, 2010) During April-February 2009-10, import of RCN stood at 7,26,095 tones against 5,89,299 tones during corresponding period of previous year while domestic production remained almost stagnant at around 6.5 lack tones for last few years. Riding on strong domestic demand growth, stagnant domestic production and lackluster export - import of cashew nuts is growing at steady pace. While processing capacity of the industry is estimated to be around 12 lack tones a year, stagnant production of around 6.5 lack tones is encouraging traders to import raw cashew nuts, get these processed and sell at much higher price. Realizing the importance of this cash crop, the Central Planning Commission had approved the setting up of a Board for cashew. Also, considering the importance of cashew as a major employment provider to the rural poor and utilization of vast stretches of waste lands in the country, a Committee of Ministers have agreed to set up a cashew development board aimed at

34

achieving self-sufficiency in production, taking research findings to the farmers' field and improving quality of products, processing, marketing and exports.

Stiff competition from others suppliers ( Business Line April

23, 2010 ) Cashew exports from the country during 2009-10 declined 1.3 per cent in volume and 2.8 per cent in value on stiff competition from other suppliers in the world market. During the last five years, exports declined 10.5 per cent and Vietnam took advantage of it. Its export increased 67 per cent during this period and is now claiming to export 50 per cent more than India. The rupee's appreciation against the dollar has also contributed to the declining trend. During this period, the rupee appreciated against the dollar by over 14 per cent. Next was the global recession, which had a severe impact on the cashew industry with demand from the US and Europe dropping. Consequently, the prices and volume of sales fell in the international market. The costs of raw cashew nuts and processing had gone up. Even though the Government announced that service tax

35

exemption would be granted for export activities, cashew exporters are being levied service tax for transport of goods from farm/port to factory and from factory to port, commission paid to foreign agents, etc. All these have added to the cost of production. At the same time inadequate availability of domestic raw nuts has forced the industry to depend on imports, The domestic production is around 7 lack tones while our processing capacity is about 14 lack tones. Hence, Vietnam is also competing with our processors for sourcing raw cashew nut from African producing countries, resulting in increase in raw cashew prices. The rupee is strengthening and the effects of recession and financial crunch are continuing. Business Line Sep 22, 2010 Fuelled by the shortage of domestic cashew crop, lower supply from the world market, and a considerable growth in domestic consumption, cashew kernels in the domestic market have been witnessing all-time high prices for the past 10 days. About 40 per cent of the Indian crop had been affected due to inclement weather in April and May. World supply also is lower due to poor crops in West Africa. Mr. K. Prakash Rao, former President of Karnataka Cashew Manufacturers' Association, said there has been a drop in processing capacity in all the processing centers by about 20 per cent. Added to this, the internal market has grown by 15-20 per

36

cent. This net gap of around 40 per cent has resulted in a steep price increase. To a query on North Indian demand for the commodity, Mr. DSouza quoted the example of Delhi and said the Government there had imposed a VAT of 12.5 per cent in the budget. The VAT was cut to five per cent in July-end. Cashew industry seeks Endosulfan ban ( Business Line -Nov 13.2010) The Kollam-based cashew processing industry has sought a ban on Endosulfan.Cashew entrepreneurs said the industry did not need raw nuts from plantations that use Endosulfan. The use of such nuts would only serve to harm the industry, especially in the export markets. They said the global production of raw cashew touched 20 lack tones. India produces about 6 lack tones of raw nuts. The country processes more than 12 lack tones of raw cashew out of which about 6.5 lack tones to 7 lack tones were processed by the Kollam-based industries and the bulk of these were imported. Endosulfans were a negligible quantity which the industry did not require. For that matter, the industry was averse to process nuts from plantations that used not only Endosulfan but also any other chemical pesticide. The industry sought to ban the use of Endosulfan and other chemical pesticides not only from plantations

37

close to human habitations like Kasaragod but also in plantations that were far away from human dwellings. At a time when the global markets were insisting on organic agro-based products, processing nuts grown through the use of toxic chemical pesticides would only serve to harm exports from Kollam. In fact, the major quantity of the raw nut requirement for Kollam was met through imports, mainly from African countries. More than four tones of raw cashew nuts are required to produce one tone of cashew kernels. ( Business Line Jan 3, 2011) India has the world's largest capacity in cashew processing. The organized sector has an annual capacity to process 14 lack tones of raw nuts. India's indigenous production of raw material is estimated at about 6-7 it is far short of the installed processing capacity. Annual import of raw cashew, mostly African origin, has shown a rising trend. More than four tones of raw cashew nuts are required to produce one tone of cashew kernels. Interestingly, India was the first country to tap the export. Raw cashew imports serve many purposes including bringing down the deficit in domestic production and helping meet raw material needs of the processing units. Importantly, imports ensure employment to a large number of cashew factory workers.

38

The cashew sector provides employment to estimated three lacks persons. Many are vulnerable to weather aberrations. Rising domestic demand also squeezes export availability. India is a classic example. So, priorities for the processing industry include exploring backward integration and strengthening the supply chain management. It is necessary to adopt good manufacturing practices. The demand side whether domestic or export is expected to continue to be robust; but given the premium nature of the product, consistent supply of top quality is the key to success. The Government implements various schemes to promote quality improvement, export promotion and so on. Lack of Demand keeps cashew price low (Business Line Jan 11, 2011) Cashew prices have maintained their weak trend despite poor global supplies because of subdued demand from consumers. Traders, however, feel that prices won't stay weak for long as Indian production is expected to be less, while cashew crop in Ivory Coast another big producer is also expected to be less due to bad weather. As per market sources, cashew market continued to be quiet. Uncertainty in demand has made buyers wary as well. They do not want to be carrying long positions at prices which are the highest ever and then see a dramatic drop in demand. As per

39

cashew processors, raw materials prices are very high and not viable for processors. Indian cashew production, which accounts for more than a fifth of the global production, is projected to come down in 201011 due to unseasonal rains and erratic temperature in the producing region, officials from the Kochi-based Directorate of Cashew and Cocoa Development (DACCD) said. The cashew crop in 2011 is likely to be delayed by more than a month due to slower and fewer flowering, as per Venkatesh Hubballi, director of DACCD. Asian markets emerging major cashew consumers ( Business Line-Jan18,2011) Indian and Asian markets have, of late, become major consumers of cashew kernels, absorbing large quantities even as consumption in traditional markets remain largely flat, making Asia a deciding factor of prices. India has been the largest consumer of cashew for some years, consumption in other Asian countries has also been growing fast whereas consumption in traditional markets has been flats or showing small growth in some segments. Asian markets are a spot market where price changes are passed on to final consumer almost immediately. Impact of this change has been felt only in the last year. The buying prices have to be dependent on the Asian spot market prices. This has changed the structure of cashew market and dynamics of price movement.

40

Large processors are not willing to reduce their prices due to uncertainty over RCN crops and prices.

CHAPTER IV TABLE -4.1 EXPORT OF CASHEW KERNELS FROM INDIA DURING 2009-2010

41

2009-2010 Countries U.S.A U.A.E Netherlands Japan U.K Saudi Arabia France Spain Belgium Greece Egypt Australia Germany Others Total QTY (M.T) 30804 18161 10314 5633 4477 3827 3814 2782 2470 2222 2018 1482 1451 18663 108120 % 28.49 16.81 9.53 5.20 4.14 3.53 3.52 2.57 2.28 2.05 1.86 1.37 1.34 17.26 100

INFERENCE: The above table shows that cashew kernels exports from India to various countries. USA stands the 1st position in consuming cashew kernels from India.

CHART 4.1 EXPORT OF CASHEW KERNELS FROM INDIA DURING 2009-2010

42

TABLE-4.2 EXPORT OF CASHEW NUT SHELL LIQUID FROM INDIA DURING 2009-2010

43

2009-2010 Countries U.S.A China Korea Rep. Japan Indonesia Taiwan Slovenia Thailand Egypt South Africa Others Total QTY (M.T) 4827 2770 1368 322 178 65 41 31 20 16 110 9748 % 49.51 28.41 14.03 3.30 1.26 0.66 0.42 0.31 0.20 0.16 1.12 100

INFERENCE: From the above table shows that the export of cashew Nut shell liquid from India to various countries.USA stands the 1st position in consuming cashew Nut Shell Liquid from India followed by China, Korea, Japan etc.

CHART - 4.2 EXPORT OF CASHEW NUT SHELL LIQUID FROM INDIA DURING 2009-2010

44

TABLE 4.3 TYPE OF EXPORTER

45

Type Merchant Manufacturer Both Total

No. of Respondents 10 35 5 50

Percentage 20 70 10 100

INFERENCE: From the above table inferred that 70 % of the respondents are manufacturer exporter, 20% of the respondents are merchant exporter and remaining of the respondents are both manufacture and merchant exporters.

CHART- 4.3 TYPES OF EXPORTERS

46

47

TABLE 4.4 COUNTRY WISE EXPORT

Countries American Zone European Union West Asia East Asia African Zone Others Total

No. of Respondents 17 12 9 6 4 2 50

Percentage 34 24 18 12 8 4 100

INFERENCE: From the above table reveals that 34 % of the cashew products are consumed by American zone, 24 % , 18 % , 12% are consumed by European Union, West Asia, East Asia respectively. Remaining 8 % and 4% of cashew products are consumed by African Zone and other countries.

48

CHART -4.4 COUNTRY WISE EXPORT

49

TABLE 4.5 DURATION OF EXPORT

Particulars Weekly Fort nightly Monthly Quarterly Total

No. of Respondents 3 17 24 6 50

Percentage 6 34 48 12 100

INFERENCE: From the above table reveals that 48 % of the exporters are export their cashew product monthly, 34 % and 12 % of the exporters are export fort nightly and quarterly respectively. Remaining 3 % of the exporters export weekly.

50

CHART 4.5 DURATION OF EXPORT

51

TABLE 4.6 TYPES OF CASHEW PRODUCT EXPORTING

Type Cashew Kernel CNSL Cardanol Total

No. of Respondent 40 8 2 50

Percentage 80 16 4 100

INFERENCE: The above table reveals that 80 % of the respondents are exporting cashew kernels and 16% of the respondents are exporting CNSL to different countries. Remaining 2 % of the respondents are now exporting cardanol.

52

CHART 4.6 TYPES OF CASHEW PRODUCT EXPORTING

53

TABLE - 4.7 IRREGATION SYSTEM FRUIT FUL FOR THE GROWTH OF CASHEW

Particulars Agree Disagree Total INFERENCE:

No. of Respondent 37 13 50

Percentage 74 26 100

From the above table it is inferred that 74% of the respondent are told the irrigation system fruitful for the growth of cashew and remaining 26% of the respondents feels that irrigation system is not suitable for the growth of cashews.

54

CHART 4.7 IRREGATION SYSTEM FRUIT FUL FOR THE GROWTH OF CASHEW

55

TABLE 4.8 HYBRID YEILDING VARIETY RESUILT CHANGES IN THE PRODUCTIVITY

Particulars Agree Disagree Total

No. of Respondent 32 18 50

Percentage 64 36 100

INFERENCE: From the above table it is inferred that 64% of respondents opinion is hybrid yielding variety result changes in productivity and remaining 36 %of the respondents opinion is hybrid yielding variety result no changes in the productivity.

56

CHART 4.8 HYBRID YEILDING VARIETY RESUILT CHANGES THE PRODUCTIVITY

57

TABLE 4.9 SUFFICIET LABOURS FOR PROCESSING

Particulars Yes No Total

No. of Respondent 40 10 50

Percentage 80 20 100

58

INFERENCE: From the above table it is inferred that 80 % of the respondents opinion was they have sufficient labors for processing of raw cashew nut. 20 % of respondents feel they have no sufficient labours for processing.

CHART 4.9 SUFFICIET LABOURS FOR PROCESSING

59

TABLE 4.10 PROBLEMS IN AFTER THE EMERGENCE OF VIETNAM AS ACOMPITATIVE EXPORTERS

60

Particulars Yes No Total

No. of Respondent 46 4 50

Percentage 92 8 100

INFERENCE: From the above table inferred that 92 % of respondents are facing the competition after the emergence of Vietnam and remaining 8% of the exporters are not facing any competition.

61

CHART 4.10 PROBLEMS IN AFTER THE EMERGENCE OF VIETNAM AS ACOMPITATIVE EXPORTERS

62

TABLE 4.11 PROBLEMS RELATED TO GETTING PROPER INFORMATION ABOUT THE WORLD MARKET

Particulars Yes No Total INFERENCE:

No. of Respondent 9 41 50

Percentage 18 82 100

From the above table it is inferred that 82 % of respondents are getting information about the world market and remaining 18 % of the respondents are not getting proper information about the world market.

63

CHART 4.11 PROBLEMS RELATED TO GETTING PROPER INFORMATION ABOUT THE WORLD MARKET

64

TABLE 4.12 PROBLEMS IN PACKAGING OF CASHEW PRODUCTS

Particulars Yes No Total

No. of Respondent 28 22 50

Percentage 56 44 100

INFERENCE: From the table it reveals that 56% of the respondents are facing the problems of packaging of cashew products and remaining 44 % of the respondents are not facing the problems of packaging of cashew products.

65

CHART 4.12 PROBLEMS IN PACKAGING OF CASHEW PRODUCTS

66

TABLE- 4.13 FACE ANY TRADE DISPUTES

Particulars Yes No Total INFERENCE:

No. of Respondent 35 15 50

Percentage 70 30 100

From the above table it is inferred that 70% of the respondents are faced the trade disputes and remaining 30% of the respondents are not faced any trade disputes.

67

TABLE- 4.13 FACE ANY TRADE DISPUTES

68

TABLE 4.14 DIFFICULTY IN CUSTOM CLEARENCE FOR EXPORTS

Particulars Yes No Total

No. of Respondent 38 12 50

Percentage 76 24 100

INFERENCE: From the above table it reveals that 76% of the respondents are facing difficulty during customs clearance and remaining 24%

69

of the respondents are not facing any difficulty during customs clearance for cashew exports.

CHART 4.14 DIFFICULTY IN CUSTOM CLEARENCE FOR EXPORTS

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TABLE 4.15 PROBLEMS IN RECEIVING EXPORT PROCEEDS

Particulars Yes No Total

No. of Respondent 30 20 50

Percentage 60 40 100

71

INFERENCE: From the above table reveals that 60% of the respondents are facing the problems in receiving export proceeds, and remaining 40 % of the respondents do not face the problems in receiving export proceeds.

CHART 4.15 PROBLEMS IN RECEIVING EXPORT PROCEEDS

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TABLE -4.16

73

DOMESTIC PRODUCTION OF SUFFICIENT RAW CASHEW NUT

Particulars Yes No Total INFERENCE:

No. of Respondent 8 42 50

Percentage 16 84 100

From the above table reveals that 84% of the respondents are not getting sufficient raw cashew nut from domestic production for processing. Remaining 16% of the respondents are getting sufficient raw cashew nut to meet their requirements.

CALCULATION OF CHI- SQURE Null Hypothesis (H0): Domestic production of sufficient raw cashew nuts meets the requirements.

74

 2 = (O-E)2 E Expected value E= RT*CT/E = 50*50/100=25 O 42 8 8 42 E 25 25 25 25 (O-E)2 289 289 289 289 (O-E)2/E 11.56 11.56 11.56 11.56

(O-E)2/E=46.24 So 2 = 46.24 Degree of freedom = (c-1) (r-1) = (2-1) (2-1) =1 The degree of freedom 1 at 5% level of significance Calculated value - 46.24 Table value - 3.841 INFERENCE: Since the calculated value is greater than the table value, the null hypothesis is rejected. So the cashew exporters were not
2

= 3.841

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getting sufficient raw cashew nuts from domestic production to meet the requirement.

CHART 4.16 DOMESTIC PRODUCTION OF SUFFICIENT RAW CASHEW NUT

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TABLE 4.17 FLUCTUATION IN EXCHANGE RATE

Particulars Yes No Total

No. of Respondent 47 3 50

Percentage 94 6 100

INFERENCE: From the above table reveals that 94% of the respondents are facing the problems of fluctuation in exchange rate. Remaining 6% of the respondents are not facing such problem.

77

CALCULATION OF CHI- SQURE Null Hypothesis (H0): Fluctuations in exchange rate are not affecting cashew exports.
2

= (O-E)2 E

Expected value E= RT*CT/E = 50*50/100=25 O 47 3 3 47 E 25 25 25 25 (O-E)2 484 484 484 484 (O-E)2/E 19.36 19.36 19.36 19.36

(O-E)2/E =77.44 So
2

= 77.44

Degree of freedom = (c-1) (r-1)

78

= (2-1) (2-1) =1 The degree of freedom 1 at 5% level of significance Calculated value 77.44 Table value - 3.841 INFERENCE : Since the calculated value is greater than table value, the null hypothesis is rejected. So the fluctuation in exchange rate affects the cashew exports.
2

= 3.841

CHART 4.17 FLUCTUATION IN EXCHANGE RATE

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TABLE 4.18 LACK OF INFRASTRUCTURE FACILITY

Particulars Yes No Total

No. of Respondent 40 10 50

Percentage 80 20 100

80

INFERENCE: From the above table it is inferred that 80% of the respondents are facing problems in infrastructure facilities and remaining 20% of the respondents are not facing any problems in infrastructure facilities.

CALCULATION OF CHI- SQURE Null Hypothesis (H0): Lack of infrastructure facility not affects cashew exports. 2 = (O-E)2 E Expected value E= RT*CT/E = 50*50/100=25

81

O 40 10 10 40

E 25 25 25 25

(O-E)2 225 225 225 225

(O-E)2/E 9 9 9 9

(O-E)2/E =27 So
2

= 27

Degree of freedom = (c-1) (r-1) = (2-1) (2-1) = 1 The degree of freedom 1 at 5% level of significance Calculated value - 27 Table value INFERENCE: Since the calculated value is greater than table value, the null hypothesis is rejected. So the lack of infrastructure facility affects the cashew exports. - 3.841
2

= 3.841

CHART 4.18 LACK OF INFRASTRUCTURE FACILITY

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TABLE - 4.19

83

COMPETITION IS AN IMPORTANT HINDERING FACTOR FOR CASHEW EXPORTS

Particulars Agree Disagree Total

No. of Respondent 45 5 50

Percentage 90 10 100

INFERENCE: From the above table it is inferred that 90% of the respondents told that competition is an important hindering factor for cashew export. Remaining 10% of the respondents are told that competition is not an important hindering factor for cashew exports.

84

CALCULATION OF CHI- SQURE Null Hypothesis (H0): Competition is not an important hindering factor for cashew exports. 2 = (O-E)2 E Expected value E= RT*CT/E = 50*50/100=25 O 45 5 5 45 E 25 25 25 25 (O-E)2 400 400 400 400 (O-E)2/E 16 16 16 16

(O-E)2/E =64 So
2

= 64

Degree of freedom = (c-1) (r-1) = (2-1) (2-1) = 1 The degree of freedom 1 at 5% level of significance
2

= 3.841

85

Calculated value - 64 Table value - 3.841

INFERENCE: Since the calculated value is greater than table value, the null hypothesis is rejected. So the competition is an important hindering factor for cashew exports.

CHART 4.19 COMPETITION IS AN IMPORTANT HINDERING FACTOR FOR CASHEW EXPORT

86

TABLE 4.20 PROBLEMS IN SOURCING FUNDS

87

Particulars Yes No Total

No. of Respondent 32 18 50

Percentage 64 36 100

INFERENCE: From the above table it is inferred that 64% of the respondents are facing the problem of sourcing funds, and remaining 36% of the respondents are not facing the problems of sourcing funds.

88

CALCULATION OF CHI- SQURE Null hypothesis (H0): Problems in sourcing funds are not affecting cashew exports.
2

= (O-E)2 E

Expected value E= RT*CT/E = 50*50/100=25 O 32 18 18 32 E 25 25 25 25 (O-E)2 49 49 49 49 (O-E)2/E 1.96 1.96 1.96 1.96

(O-E)2/E =7.84 So
2

= 7.74

Degree of freedom = (c-1) (r-1) = (2-1) (2-1) = 1 The degree of freedom 1 at 5% level of significance
2

= 3.841

89

Calculated value 7.74 Table value 3.841

INFERENCE: Since the calculated value is greater than the table value, the null hypothesis is rejected. So the cashew exporters were facing problems in sourcing funds.

CHART 4.20 PROBLEMS IN SOURCING FUNDS

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CHAPTER- V FINDINGS AND SUGGSTIONS

FINDINGS: From the survey, it was found that 70% of the respondents are manufacturer exporters. Most of the respondents export monthly.

From the survey, it was found that majority of the exporters (80%) export cashew kernels and remaining respondents export other cashew product.

Majority of the respondents export their product to American Zone. Most of the exporters told that irrigation system is fruitful for the growth of cashew. Majority of the exporters feels that hybrid variety shows changes in their productivity.

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 From the survey, it was found that majority of the respondents did not get sufficient raw cashew nut to meet the requirements. Fluctuation in exchange rate is the major problem faced by most of the Indian exporters. Majority of the respondents are facing competition after the emergence of Vietnam. Vietnam and Brazils is the major competitor of Indian exporters. From the survey, it was found that majority of the exporters face the lack of infrastructure facility problems. Most of the exporters get proper information about the world market. It was given by CEPCI. Majority of the exporters feel that competition is a major hindering factor for marketing of cashew product. About 56 % of the respondents are facing problems in packaging of cashew product. From the survey, it was found that exporters are facing trade dispute problem. From the survey, it was found that 76% of the exporters are facing the custom clearance difficulties for exports. About 64% of the exporters are facing the problems of sourcing funds.

92

From the survey, it was found that 60% of the respondents proceeds. facing problems in receiving export

Majority of the respondents told that Govt. conducting quality improvement training program for developing exports.

SUGGESTIONS: CEPCI should promote the execution of export orders. There should be increase in the production of raw cashew nut by taking scientific and systematic method other than using hybrid variety.

Replantation programme and introduction of organic cashew farming can enhance the domestic production of raw cashew nuts.

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 Govt. should provide certain incentives to achieve the higher growth rate of production. Cashew exporters should use new innovations and modernized technology for processing of cashew nut to overcome the shortage of labours. Govt. should provide financial assistance to improving the infrastructural facility. Should introduce more incentives and facilities to labours. CEPCI should provide the information about the world market at right time to Indian exporters. Trade fairs and seminars should be conduct in foreign countries. Central Govt. can increase the assistance to exporters in participating trade fair exhibitions. Govt. should take a step to making lack of poisons, good quality and recyclable package. Central Govt. /CEPCI should provide subsidiaries and loan facilities to cashew exporters.

CEPCI should take a step to unnecessary delaying for sanctioning loans.

The CEPCI should conduct a study to determine the nutritional value of cashew nuts.

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 The CEPCI should try to explore untapped markets like Pakistan, other SAARC countries and West Asia. All the exporters should get the up to date knowledge of cashew in the world market. Govt. should take step to solve the trade disputes between exporter and buyer. Govt. should reduce the custom clearance procedure.

CHAPTER - VI CONCLUSION

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The research brought about the problems faced by the cashew exporters from India especially in Kerala. The exporters face various problems like acute shortage of raw cashew nut, fluctuation in exchange rate, lack of infrastructural facility, competition from Vietnam and financial problems etc. Through these problems it may reduce the export performance of cashew kernels and CNSL during 2009-2010 when compared to the year 2008-2009. Global recession also adversely affects the Indian cashew exports during the current year with demand from US and Europe dropping. Consequently prices and volume of sales fell in international market. The central Govt. as well as state Govt. should adopt a programme for increasing the domestic production of raw cashew nut and improve the quality of finished product. CEPCI has to encourage the exporters in participating trade fairs and exhibitions. So that cashew exports from India will increase and it make India become a largest cashew exporting country among other countries of the world. Thus the central Govt. should adopt certain measure for reducing the major problems and encouraging exporters. Then only the cashew exporters to reach their target in future export of India.

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