Why Prices Have Crashed
The sharp decline in local cashew kernel prices, estimated at 20–30%, is closely linked to the way imports are handled. Instead of being declared under genuine categories, many consignments of African and Vietnamese kernels are misclassified under “cattle feed” or “husk,” which attract little to no duty. This practice allows importers to sell kernels at artificially low prices, directly undercutting Indian processors who have to bear both higher duty and compliance costs.
The situation is further aggravated by the misuse of SEZs (Special Economic Zones) and EOUs (Export Oriented Units). What were originally designed to boost exports are now being exploited to divert duty-free cashew imports into domestic markets. Ports like Kakinada, Chennai, Krishnapatnam, and Mumbai have become entry points for such flows, intensifying the squeeze on local manufacturers.
The Tax Disadvantage
Adding to the pain is the issue of double taxation. In Andhra Pradesh, cashew processors must pay the Agriculture Market Committee (AMC) cess both on raw cashew nuts and again on processed kernels. This dual levy erodes margins even further. In contrast, other producing states like Odisha, Karnataka, and West Bengal do not impose cess on imported nuts or processed kernels. This uneven playing field creates regional disparities and puts AP-based processors at a structural disadvantage.
With production levels in Andhra averaging 60,000 kilograms per day, even a slight erosion in margins translates into large-scale financial stress. For small and medium processors, survival itself is now at stake.
Employment at Risk
The crisis is not just about numbers—it is also about people. Over 30,000 women are directly employed in cashew processing units in districts like Srikakulam. These jobs are now under severe threat as companies struggle with declining profitability, disrupted cash flows, and shrinking demand for locally processed kernels. The collapse of this sector would not only hurt Andhra’s rural economy but also erode the social safety net that women’s employment in agro-industries provides.
What the Industry is Demanding
The Andhra Pradesh Cashew Manufacturers’ Association has raised three urgent demands:
Abolition of AMC cess on cashew kernels to remove the double taxation burden.
Stronger monitoring of imports, including strict checks on misclassification and diversion through SEZs and EOUs.
Trade safeguards that ensure a level playing field against underpriced imports.
These are not just defensive measures—they are essential policy corrections to ensure the survival of an industry that has built both economic and social capital in the state.
The Bigger Picture
India has long been one of the world’s largest processors and exporters of cashew kernels, but its competitive edge is eroding. Imports from Africa, while necessary to supplement raw nut shortages, must not become a backdoor entry that destroys domestic processing. If unchecked, this pattern could mirror what happened in other agri-processing sectors where regulatory loopholes and tariff arbitrage hollowed out domestic industries.
In summary, Andhra Pradesh’s cashew crisis is not a natural market correction—it is the product of policy loopholes, weak enforcement, and uneven taxation. Unless addressed urgently, it could lead to the collapse of a cluster of 400+ processing units, the loss of tens of thousands of jobs, and the weakening of India’s position in the global cashew value chain.#AfricanCashewImports
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