Professional Documents
Culture Documents
Project of Cashew Processing Unit
Project of Cashew Processing Unit
Project of Cashew Processing Unit
CERTIFICATE
This is to certify that the project report entitled “COST AND PROFITABILITY ANALYSIS
OF CASHEW PROCESSING UNIT IN KOLLAM DISTRICT” is a record of Bonafede work
carried out by ARUNIMA D (15920126021), ASWATHY RAJ V S (15920126022), ASWATHY S
(15920126023), BINDHYA B BIJU (15920126024), EBINA MONACHAN (15920126025) submitted
to university of Kerala in partial fulfilment of the requirement for the award of the degree of Bachelor
of commerce. This project work was carried out under my supervision and guidance during the
academic year 2022-2023.
ARUNIMA D : 15920126021
ASWATHY RAJ V S : 15920126022
ASWATHY S : 15920126023
BINDHYA B BIJU : 15920126024
EBINA MONACHAN : 15920126025
ACKNOWLEDGEMENT
First of all, we thank the Almighty God for giving us an opportunity to do this project.
We acknowledge with gratitude to our guide, of DR. DEEJA SAJAN, St. Gregorios College
Kottarakara, for her keen interest and encouragement which gave us the essential confidence
and her valuable guidance and support through this project able that helped us to get the same
completed on time. We sincerely thank DR. SUMI ALEX, Principal; Head of Department;
Commerce St. Gregorios College Kottarakara and all other staffs of the college for their
valuable support and cooperation towards the completion of this project. We recall with
gratitude this service of all the faculties of the Department of Commerce, St. Gregorios College
Kottarakara. We express our deep sense of gratitude to the cashew factories in Kollam districts.
This work will become meaningless if we fail to express our kind acknowledgement to our
beloved parents, classmates and other friends who have consistently encouraged as for
completing this project work.
THANKU YOU
ARUNIMA D
ASWATHY RAJ
ASWATHY S
BHINDYA BYJU
EBINA
MONACHAN
Place: Kottarakara
Date:
CONTENT
CHAPTER TITLE PAGE NO
List of tables
List of figures
1 Introduction
2 Review of literature
6 Bibliography
7 Appendix
LIST OF TABLES
TABLE NO TABLE NAME PAGE NO
4.1 Classification according to value of
production
4.2 Classification according to nut
procurement
4.3 Classification of raw nut cost per bag
4.4 Classification according to packaging
and forwarding
4.5 Classification according to office and
administration of companies
4.6 Classification according to interest and
bank charges
4.7 Classification according to average
labour cost in roasting per bag
4.8 Classification according to average
labour cost in shelling per bag
4.9 Classification according to average
labour cost in borma and cooling per
bag
4.10 Classification according to average
labour cost in peeling per bag
4.11 Classification according to average
labour cost in grading per bag
4.12 Classification according to average
labour cost in supervision per bag
4.13 Classification according to average
labour cost in deprecation and on asset
4.14 Classification according to average
labour cost in other expense per
4.15 Classification according to average
profit per bag
4.16 Problems associate with working capital
4.17 Problems in the production of raw nuts
4.18 Problems in marketing
4.19 Problems in free trade in raw nuts
4.20 Problem related to import
LIST OF FIGURES
FIGURE NO FIGURE NAME PAGE NO
4.1 Classification according to value of
production
4.2 Classification according to nut
procurement
4.3 Classification of raw nut cost per bag
4.4 Classification according to packaging
and forwarding
4.5 Classification according to office and
administration of companies
4.6 Classification according to interest and
bank charges
4.7 Classification according to average
labour cost in roasting per bag
4.8 Classification according to average
labour cost in shelling per bag
4.9 Classification according to average
labour cost in borma and cooling per
bag
4.10 Classification according to average
labour cost in peeling per bag
4.11 Classification according to average
labour cost in grading per bag
4.12 Classification according to average
labour cost in supervision per bag
4.13 Classification according to average
labour cost in deprecation and on asset
4.14 Classification according to average
labour cost in other expense per
4.15 Classification according to average
profit per bag
4.16 Problems associate with working capital
4.17 Problems in the production of raw nuts
4.18 Problems in marketing
4.19 Problems in free trade in raw nuts
4.20 Problem related to import
Chapter 1
Introduction
INTRODUCTION
India is the largest producer and processor of cashew in the world. Cashew as a marketable
commodity, has a very important role to play in the liberalized Indian economy. With export
earnings of rs.12320 million in 1995-96, cashew ranked as one of the top agricultural export
commodities. From the farmers, as well as from the expert's point of view, the current emphasis
that cashew is reviving as a horticulture crop from the research and development front, is a
welcome sign. At present, India has a processing capacity of nearly seven hundred thousand
metric tons and to meet the raw nut demand, the country depends partially on imports from
several African, and in recent years, from south East Asian countries. This has considerable
drain on the country's foreign exchange reserves and there is an urgent need to increase local
production to substitute imported raw material in order to derive the maximum benefits from a
strong processing and marketing capability developed over the years by the Indian cashew
industry. W-180, the king of cashew. They are larger in size and very expensive. W-210, are
popularly known as ‘jumbo’ nuts. W-240, an attractive grade which is reasonably priced. W-
320, are the most popular among cashew kernels and highest in terms of availability, worldwide
in Kerala most of the cashew processing factories are located in Kollam district. The industry
provides livelihood for about 6-7 lakhs of employees and farmers, the cashew industry has
national importance. In Kollam district alone there are more than 2.5 lakhs employees directly
involved in the industry, which comes about 10 per cent of the population of the district, out of
which 95 per cent are women workers. It is a fact that any amount received by a woman worker
will be utilized directly for the benefit of the family and hence the link relating to family welfare
is quite clear. Even though the government of Kerala has incorporated the Kerala state cashew
development corporation (KSCD) and Kerala state cashew workers apex industrial co—
operative society (capex) to develop the cashew industry, the cashew industry and ancillary
industries did not grow as per the expectation. In this context, an attempt has been made to
analyse the problems and potential of the industry so as to make the industry viable and
sustainable for the perpetual employment and income generation as well as the overall
development of the Kollam district. Marketing in respect of cashew involved several players
and channels. Marketing begins from the sale of raw cashew nuts by farmers and reaches the
level of exporters/retailers for selling of processed and graded kernels to the ultimate
consumers. The sample cashew growers sold a major portion of the produce to the local traders,
who in turn supplied the nuts to large traders and processing units located in Kollam (Kerala),
Godlore (Tamil Nadu), Mangalore (Karnataka) etc. There are several entities in the marketing
channels that get good share in the total spread between the producer and consumer. The
cashew industry, being an important sector in terms of GDP , it is cultivated in more than 17
states of India which makes easy availability of raw cashew ready for exports as well as to
catch the growing demand of cashew and cashew kernels for the Indian population.
SIGNIFICANCE OF THE STUDY
Cashew nut processing allows for the development of an important by-
product, which can increase its added value. The liquid inside the shell represents
15% of the gross weight and has some attractive possible medicinal and industrial
uses. Cashew has been cultivated primarily for its food and medicinal importance,
which involves the use of whole cashew fruit, that is the apple, kernel as well as
a nut for various industrial purposes. Currently, there is a huge market for cashew
products. The units together have a processing capacity of more than 8 lakh tons
per annum. Often cashew nut processing business is considered profitable, and
budding entrepreneurs can take this venture for long-term profits.
OBJECTIVE
1. To analyse the cost of cashew processing units.
2. To analyse the profitability of cashew processing units.
3. To identify the reason for the increase in cost and decrease in profitability of cashew
processing units.
METHODOLOGY
This an empirical study based on survey method. The data collected are both from primary
and secondary source. The questionnaire is prepared with interview schedule and 40 samples
were taken.
COLLECTION OF DATA
The data needed for the project study is collected through primary source and secondary
source. Survey through questionnaire was conducted for primary source. In secondary source
the data was collected with the help of books, other projects, and also through the help of
internet.
TOOLS OF ANALYSIS
The data collected were analysed by using mathematical and statistical tools like percentage
diagram and figures.
LIMITATIONS
• The study mainly focused on the socioeconomic conditions
• Lack of time for data collection
• The availability time for conducting survey was limited
• The field study has been made in the selected units only
• Some data are not 100 % accurate
CHAPTERISATION
CHAPTER-1- INTRODUCTION
CHAPTER-2- REVIEW OF LITERATURE
CHAPTER-3- HISTORY ABOUT CASHEW INDUSTRY
CHAPTER-4- ANALYSIS AND INTERPRETATION
CHAPETR-5- FINDINGS, SUGGESTIONS, CONCLUSION
Chapter 2
Review of literature
1. JAFFEE. S. (1995), Private sector response to market liberalization Tanzania's cashew
nut industry. In marketing affairs High Value Crops (EDS) Jaffee and Morton Dubuque.
J. Kendall Hunt. pp. 153-198. The fact that little capital is required for cashew
establishment and that low nut perishability minimizes the contribution requirements
for post-harvest activities have given cashew the reputation of being a poor man’s crop.
6. TAKALA.J and SAASELA K.L, (2006), TAKALA et.al, (2006) observed that all over
the world there are about 430 million people were affected by occupational accidents
and occupational diseases annually.
7. NABARD,(2007) Cashew nuts in Orissa evaluation study series: One heart touching
point about this sector is that it gives employment in the lean agricultural sectors and
mostly to women from economically back ward areas of rural and tribal belts.
9. RIJUMOHAN.A (2009): Air Pollution: a case study of cashew nut factory, MPRA
paper. Commercial processing of cashew nuts at factories involves different stages of
operations, such as roasting, shelling, peeling, grading, and packing. Most hazardous
stages of cashew nut processing are roasting and shelling. Through the state
Governments press the cashew nut processing units to use non-polluting stembased
technique in place of drum roasting drum roasting technique that creates air pollution,
many units still follow the oldest cheaper method.
10. YADAV.S (2010), Economics of cashew in India NABARD, Mumbai: Cashew industry
provides source of livelihood for the women in processing sector and generates foreign
exchange through exports.
12. Dr. S. SIVASANKARAN, Dr. R. SIVANESAN (2013): A study about the wages and
incentive of cashew industries in Kanyakumari district. Studies indicated that wages
and incentives in cashew factories indicates the rising cost of living compels the
workers to take up the job. The researcher's revels that the workers get their wage on
the basis of piece rate system. Majority of them spent huge money for food. The
workers are satisfied with their job as well as the promotion allowed in the industry.
The researcher document that workers get their 9 wages on the basis of number of
working hours per week. Researcher summed up workers is satisfied with incentive and
bonus scheme also the working condition in the factory.
17. V. V GIRI, (2014): National Labour Institute employment and social protection of
cashew workers in India with special reference to Kerala. A research study on
employment and social protection of cashew workers in India.
19. LUIS CATARINO, YUSUFO MENEZES (2015): cashew cultivation in Guinea Bissau
– risks and challenges of the success of a cash crop. The present Study provides an
account of the process of cashew expansion in Guinea Bissau, reviews the current
situation and discusses its future prospects. The spread of pests and diseases is
becoming a problem. Strong dependence on a single cash crop also renders the country
vulnerable to market fluctuations, entailing risk to local producers and the national
economy in the medium term, losses of the export earnings can occur, which may
impact the living standards and food security of Bissau Guineans both in Urban and
rural areas.
20. VINAY NELSON (2016): Work related health problems of female workers engaged in
the cashew processing industries a cross sectional study from Kollam district Kerala,
Indian Journal of Community Health. The aim of the study was to identify the health-
related problems among female workers of cashew industries in Kollam district. The
researcher recounted that health-related issues pertaining to musculoskeletal system,
respiratory systems skin conditions and eyestrain highly prevalent among women
engaged in cashew processing Industry. The researcher observed that musculoskeletal
problems are more among workers engaged in shelling and peeling among due to
repetitive movements of same joints and fixed squatting working position. Researcher
proposed that health issues can be limited by providing education on postural change.
with special reference to Kerala. The specific objective of the study was to assess the
efficiency of existing social security and welfare measures for workers in cashew
processing. Results from the study Indicate that the employees state insurance (ESI)
scheme act as the main provider of health facilities but not all are eligible for benefits
under ESI scheme. The researcher also suggests that cashew workers depend on ESI
facilities there is an urgent need to strengthen the system of medicines and consumables
to the ESI dispensaries and hospitals. There is much scope to improve working
conditions in Cashew factories. To improve working conditions the government may
provide a onetime grant /soft loans to employer as an incentive to good practices and
also for modernizing working sheds. It may be noted that some of the workers Such as
widows, unmarried women aged above 50 years and workers aged above 80 years are
eligible for higher amounts of pension under other social security schemes initiated by
state and central government.
21. M.V SAJEEV and A.V MEERA MANJUSHA (2016): Decline of cashew cultivation in
north Kerala, an analysis of impact. The Study states that the Social and economic
benefits accrued by frames from cashew and economic cultivation. The results reveal
that the majority of cashew farmers had derived low socio-economic benefits with
particularly high social benefits in comparison to low economic benefits. The farmers
are migrated to other remunerative crops. The study calls for government intervention
in price fixation of cashew farmers association. The findings and intended to help
research and development agencies in targeting their efforts towards increased socio-
economic impact from cashews cultivation.
25. JEMAL TOLA, YALEW MAZENGIA (2019): -Cashew production benefits and
opportunities in Ethiopia. Cashew nuts are to be used as food, medicine and source of
income in more tropical regions with largest coverage found in Brazil, Indian Vietnam
and several countries in west and east Africa. The study states that the increasing
demand for raw cashew nut from processors has made the crop to be the major source
of foreign exchange in most developing countries. However, despite the huge potential
to produce Cashew in Ethiopia, only little is known about its current production,
potential benefits, and opportunities in Ethiopia, mainly due to lack of knowledge and
awareness.
26. D.KINSLIN (2019): Occupational hazards of cashew workers in Kerala, Study shows
that in cashew industries still poses physical, chemical and psycho - sociological
hazards to the employees. The employers to take necessary steps to prevent the risk of
hazards in the cashew processing industries such as providing gloves, neat and clean
environment including hygienically maintained toilets, ensuring minimum exposure to
toxic gases and giving moral support to the suffering employees.
27. PELEMO, OLALEYA (2019): Analysis of Socio-Economic Benefits derived from
Cashew production in Kongi State Nigeria. The major constraints faced by Cashew
farmers in the study area were insufficient price information inadequate extension and
Inadequate capital. It was re commended that adequate capital and other production
incentives should be provided for farmers in order to maximize their production in the
study area, awareness on cashew potentials should be carried out in order to maximize
the potentials of cashews production and more lands should be devoted to cashew
production in the study areas to enable farmers enhance their production.
28. VIVEK MAHAJAN, Dr. PRAVIN CHAVAN (2019): An Empirical Analysis of factors
Affecting on preference for cashew in Nipani. The objective of the study was to study
the factors influencing on selection of Cashew. The primary data was collected from
120 cashew consumers through questionnaire. The data was analyzed by tabular
analysis, factor analysis, one way ANOVA test and descriptive statistics. The result
revealed that major factors influencing for cashew preference was reasonable price,
taste and quality. The hypothesis result revealed that there is no correlation between
preference for cashew and annual income of the consumers.
6. NABARD, (2007) Cashew nuts in Orissa. (In) Evaluation study series: Orissa RO: No
12, National Bank for Agriculture and Rural Development, Bhubaneshwar. P.97.
7. RIJUMOHAN, A., (2009) "Air pollution: a case study of a cashew nut factory," MPRA
Paper 37712, University Library of Munich, Germany.
10. VV GIRI (2014) National Labour Institute. 2014. Employment and social protection of
cashew workers in India with special reference to Kerala. Ministry of Labour and
Employment, Government of India.
11. CATARINO, L., MENEZES, Y., AND SARDINHA, R. (2015) Cashew cultivation in
Guinea-Bissau—risks and challenges of the success of a cash crop. Sci. Agric. 72. [epub
ahead of print].
17. ISHASANI CHETHAN (2001). The impact about the ecommerce in cashew industries.
18. SHAHAL HASSAN (2001). Systematically depicts the evolution of Indian cashew
industry right from the form of a cottage industry.
25. VINAY NELSON(2016), Work related health problems of female workers engaged in
the cashew processing industries a cross sectional study from kollam ditrict kerala .
Cashew development
The cashew development programme started with distribution of seedlings of the crop
to farmers. A concerted effort to develop the cashew industry started with the focus on
production, area expansion, improvement of quality planting material and development of
production technology, which included rejuvenation and plant protection. Research was
strengthened by establishing the all India coordinated research project on cashew. At the same
time, the state forest departments started systematic plantation of this crop using seedlings from
high yielding plants. The formation of cashew development corporations and forest
development corporations was a significant developmental step in the promotion of cashew to
the public. Due to the absence of any recommended cultivars and suitable multiplication
techniques, massive 29 areas were covered using seeds and seedlings as planting material. High
yielding cultivars suitable for different agro-climatic conditions have been identified. The
establishment of regional nurseries, both under public and private sectors closely monitored by
dccd, provided an excellent infrastructure for the production of quality planting material. Forty
high yielding cultivars were developed (table 6). A standardized soft wood grafting technique
and standardized production practices were developed. These efforts continued with substantial
increase in allocation of funds coupled with accelerated growth in production and productivity.
The emphasis is now placed on removal of old unproductive plantations and replanting with
high yielding cultivars constraints in cashew production even though cashew production is
blessed with a huge research effort, a vast network of processing industries and elite private
processing sector, and the most congenial climatic conditions, there are still a number of
constraints on production. For example, many early cashew plantations were established with
poor quality seedling progeny and are now unproductive. Also, poor soil fertility in cashew
growing areas, seedling progeny of indistinct origin and neglect of crops have resulted in low
yields. This was prevalent in most of the cashew growing areas of Karnataka, Goa, Andhra
pradesh, Orissa and Tamil nadu. The lack of transfer of technology programmes to better equip
farmers is yet another constraint opportunities for enhancement of production and productivity
there is enormous scope to introduce cashew into the non-traditional states of Orissa,
Maharashtra, Andhra pradesh and Karnataka. Massive replanting programmes to replace the
aging cashew plantations with improved cultivars, establishing cashew export zones, using
quality clonal planting material, establishing cottage industries for the processing of raw nuts
and cashew apples, effective transfer of technology programmes, and introduction of a contract
farming system, provide opportunities to enhance production and productivity and to overcome
the shortage of raw nuts required by the processing industries.
Cashew industry in Kerala
Kerala is the main cashew processing state in India with almost hundred per cent
concentrations in Kollam district. As the industry began to grow, the number of processing
units increased and the importers began to take speculative position on the commodity. The
pioneering efforts taken by some industrialists in Kollam had helped to bring up the Indian
cashew industry into global monopoly. In the 1960s the government of Kerala had brought the
land reforms act; cashew was taken away from the plantation status while rubber, tea, coffee
and cardamom were given the plantation status. Before the act came into force, existing cashew
plantations were converted into rubber plantations. Since Kerala had a monopoly of the cashew
crop, the land reforms act and similar acts in other states simultaneously affected the indigenous
production of cashew nuts. The scarcity of raw nuts and unfavorable fluctuation in the market,
created out throat competition among the processors in achieving more export. According to
the directorate of cashew and cocoa we need about 10 lakh mt of raw nuts for processing and
the production is only 4 lakh mt giving rise to a deficit of 6 lakh tonnes, which is met through
imports. Now Brazil, Vietnam etc. Has started processing in a big way leading to lot of
problems for exporters in the market with respect to raw cashew procurement from abroad as
well as finding the export market.
HACCP
The hazard analysis critical control point approach consists of seven steps comprising
of
(a) conducting a hazard analysis to identify the hazard, assessing their severity and the risk they
pose.
(b) identification of critical control points required preventing or controlling significant hazards
(c) establishment of preventive and control measures
(d) monitoring of each critical points
(e) implementation of appropriate and immediate corrective action whenever criteria are not
met
(f) establishing a verification procedure to see that overall i-iaccp system is working
(g) the formulation of a proper record keeping system of the whole haccp system
the profit in any trade is the difference between the selling price of the product — (raw
material cost + processing cost). In the above chapter we have discussed the procurement
methods and the processing of raw nuts. To survive the industry there should be adequate profit
from the industry. So to get cheap raw material the internal production of raw nut should be
increased considerably. Quality improvement right from the plantation level is needed to get a
higher price. So certainly there is a positive relation between procurement price, production of
raw nut and development of the industry.
Pricing
Indian raw nut price projections
Since 85 per cent of indian production is exported, world market price would determine local
raw nut prices. Other factors are the kernel mix, farm gate to wholesaler expenses and value of
byproduct. The only by-product of importance is cashew nut shell liquid. There is a trade off
for cashew nut shell liquid because when cashew nut shell liquid is recovered from the raw
cashew nut it will affect the quality of the cashew kernel and also a reduction in the price of
kernel. At present, the breakeven price of cnsl is about us$ 500 per tonne. Prices of cnsl are
above us$ 1,000 per tonne at present, after years of being between us$ 150 and us$ 300 per
tonne. Since little information is available on cnsl market and prices, which might again decline
below breakeven level, and since only some factories have cnsl extracting equipment, by-
product recovery has not been assumed in raw nut price calculation. There is considerable
variation in processing costs between private and public sector and, because of different wage
rates, among states. Similarly, there are variations in processing qu'ality among factories and
different states. Main differences are between kerala 70 where both wage rates and quality of
processing are high and in other states where wage rates and quality of processing are low.
Since public sector processors have been steadily expanding their share of exports, their costs
etc. Have been considered for calculating raw nut price for kerala. Quality advantages are more
than offset by high processing costs, and raw nut prices in kerala are, and will continue to be
lower than in other states.
Marketing
India is the largest producer, processor and exporter of cashew kernels in the world. Our
cashew kernels are exported to more than 60 countries of the world mainly to USA,
Netherlands, uk. Gennany, Australia and uae. About 65 per cent of the world export of cashew
kernel is from india. Usa is the largest importer of cashew kernels in the world. Over 60 per
cent of the cashew imports in to usa are from India, and over 40 per cent of India’s export are
to USA. Large quantities of Indian cashews are also re exported from the Netherlands to
European countries and USA after making value addition by the Netherlands. Until the early
1970s, India had a near monopoly in the export of cashew kernels to world markets, although
India was by no means the only producer of raw cashew nuts, India has been traditionally
deficient in production of raw nuts and depends, to a large measure, on imports from the east
African countries and lately from countries in south east Asia. In the matter of export of cashew
kernels, Brazil has the second position. At present, cashew kernels are mainly used as a snack
food in the roasted and salted form. The broken cashew kernels are 78 mainly used in
confectionery, bakery and chocolate industries. In India, cashew is used in a variety of food
items. Many cashew recipes have been developed and they are gaining popularity among chefs
and housewives all over the world. Cashew is a unique combination of fat, proteins,
carbohydrates, minerals and vitamins. High percentage of fat content in food items is
considered to be not good for health. However, there is good fat and bad fat content in food
materials. The fat which cashew contains is definitely good fat. Even though cashew contains
47 per cent of fat, 82 per cent of this fat is unsaturated fatty acids. The unsaturated fat content
of cashew not only eliminates the possibility of the increase of cholesterol in the blood, but
also balances or reduces the cholesterol level. Cashew also contains 21 per cent of proteins and
22 per cent of carbohydrates and a right combination of amino acids, minerals and vitamins,
and therefore, nutritionally they stand at par with milk, eggs and meat. As cashew has a very
low content of carbohydrate, almost as low as 1 per cent of soluble sugar, the consumer of
cashew is privileged to get a sweet taste without having to worry about excess calories. Cashew
nuts do not add to obesity and help to control diabetes. 79 even though cashews have lot of
health advantages this information has not been brought to the knowledge of the consuming
public and no worthwhile programme of promotion has so far been undertaken by any country
or company to increase the consumption of cashews worldwide. Now people are taking efforts
to develop internal market also. Till about a decade and half ago, India enjoyed a virtual
monopoly in the international markets. More than 95 per cent of the cashew kernels consumer
worldwide was supplied by India. It was not only processing the entire raw cashew nuts
produced in India but also was importing most of the cashew crop from east African countries
like Tanzania, Kenya and Mozambique as well. Brazil entered the market in the later years of
1970’s and over a few years they became a major competitor for us. The factors, which helped
them to achieve this status, were: -most of the processors are large-scale farmers of cashew.
This helps them to have a captive cultivation. —even though their production method, which
is machine, oriented produces more brokens, the low raw seed prices ensured price
competitiveness. 80 —proximity to the american markets. This competition from brazil
necessitates that indian cashew nuts needs to be promoted generically. An effort towards this
has been undertaken by the cashew export promotion council of india by way of participation
in trade fairs and by the publishing of brochures etc. But this effort will have to be intensified
if more headway is to be made. Recently the major roasters and salters of cashew nuts in the
u.s have decided to undertake promotion for cashew nuts among the consumers. But here the
problem is that it is cashews as whole, and not indian cashews, which are being promoted. If
we have to reap the benefits of the promotion, we have to be strategically poised to have an
edge over brazil. Recently other cashew producing countries like kenya, tanzania,
mozambique, vietnam and indonesia have started processing of their own. But since they have
not yet mastered the art and since the production efficiencies have not been achieved, they
continue to be small players. It is found that china has also started cashew processing. With the
reputation they have in economic 81 activities, they may soon become a major competitor in
the input as well as in the output market.
EXPORT SCENARIO
India has a creditable record of attaining good foreign exchange by exporting cashew kernels.
During the year 2009-2010, India exported 108,120 MT of cashew kernels valued at US$590
million (Table 3). USA, The Netherlands, UK, Japan, UAE, France, Canada, Saudi Arabia,
Singapore, Italy, Germany, Austria, Israel and Spain are the major international buyers of
Indian cashews. Further, cashew nut is also imported into India from other producer countries.
These nuts are processed in the country and then are either distributed in the local market or
re-exported. The first commercial cashew processing unit was set up in Kollam in the mid-
1920s. However, early exports were not followed up because the cashew kernels were not
vacuum-packed, but wrapped in newspapers and packed in reused tea chests. World War II put
a halt to any further development of the trade. Export volumes picked up only after the
introduction of airtight tins infused with carbon dioxide in the mid1950s. Soon after this
technological advancement, processing plants were established in Mangalore and Goa. Another
small but important processing center is located in Panruti, the South Arcot district of Tamil
Nadu. A major problem facing the Indian cashew industry is the acute shortage of raw cashew
Figure 2. Major cashew growing areas in India. nuts within the country. The processing
requirement is about 1,200,000 MT per annum while the domestic production is only 600,000
MT per annum. Consequently, the cashew processing industry has resorted to importing raw
nuts for processing and export. Along with the increasing world demand for cashew, Indian
consumption is also growing. India and Brazil were the major suppliers of cashew to the world
market until about five years ago. In recent years, Vietnam has also emerged as a major supplier,
replacing Brazil in second position. At present, USA and West Europe are India’s major
markets, followed by Japan, West Asia and Australia. New emerging markets like Eastern
Europe, Commonwealth of independent state countries and China are becoming active buyers
of cashews. Another area where there is potential for significant market growth is export of
organically produced cashews. Moreover, new products are being developed apart from the
cashew kernels, including cashew apple, cashew nut shell liquid (CNSL), cashew shell and
cashew testa. Cashew apples can be sold fresh as soon as they have been picked, and are then
used as a culinary ingredient or further processed into drinks (juice, wine), marmalade or
vinegar. There are interesting prospects for setting up processing plants for utilization of
cashew apples, which, at present, are mostly wasted. Many preparations like juices, jams,
candies, pickles, chutneys, and alcoholic beverages can be prepared from this by-product.
Cashew nuts consist of 35-45% seed and around 55-65% shell. The shells contain 15-30% oil.
A ton of nuts contains around 200 kg seeds and 180 kg oil (cashew nut oil or CNSL). CNSL is
a naturally occurring phenol, which is contained in the soft honeycomb mesocarp of the shell.
CNSL is a viscous, oily or balsam-like substance, pale yellow to dark brown, having bitter taste
and caustic properties. Fresh CNSL contains 90% anacardia acid, which is converted into
cardanol 24 on heating. The remaining 10% is cardo, which is mainly responsible for the
vesicant property. CNSL, a by-product of cashew processing, is used as oil in industry. It is a
versatile industrial raw material that has applications in polymer-based industries such as
friction dust, brake linings, paints and varnishes, laminating resins, cashew cements,
polyurethane-based polymers, surfactants, and epoxy resins (Peter, 2002). Cashew shell, after
removal of the kernel and extraction of shell liquid, is currently used as fuel. However, this
shell can also be used to manufacture particle- based boards for the packaging industry. Tannin
can also be extracted from the testa of the kernel. It has application in the leather industry and
many other chemical industries. The major products for industrial applications are cashew
lacquer, insulating varnishes, electrical windings and electrical conductors impregnated with
CNSL and cashew cement (CNSL reacted with formaldehyde).
Global Scenario
Cashew production takes place mainly in central and South American zone, Asia and oceanic
zone and African zone. The Asiatic zones include India as the major producer besides China,
Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Srilanka and Myanmar. 101 In
African zone, Mozambique, Tanzania and Kenya are major producers, besides minor countries
such as Benin, Guinea Bissau, Ivory Coast, Madagascar, Nigeria, Ghana, Senegal and Togo. In
the Latin American zone, the primary producer of cashew to the world comprises Brazil, the
original inhabitant of cashew where development takes place on a faster speed besides
Columbia, Costa Rica, Honduras, Salvador, Guatemala, Panama and Venezuela. The total raw
nut production in the world is around 1.8 million tones from 4.0 million ha. The productive
area is likely to be around 3.6 million ha. The average global productivity is only around 500
kg/ha. The total and productive areas in Asiatic Zone are 1.34 and 1.12 million ha respectively.
Total production in this region is 0.75 million tones with manifested productivity of 670 kg/
ha. In African Zone, there is 0.7 million ha as total area and 0.58 million ha as productive area.
Total production emanating from this region is 0.51 104 million tones with productivity of 880
kg/ ha. Under Latin American Zone, there is nearly 2 million ha (50 per cent of global area) as
total area. Productive areas also are more or less the same. Total production of this region is
0.57 million tones with productivity of 300 kg/ha. India in Asiatic Zone, Nigeria in African
Zone and Brazil in Latin American Zone are largest area holders under cashew, in each of the
zones. India has 150 per cent productivity in comparison to the global productivity, while the
same in Nigeria is 152 per cent. Inter zonal productivity in global relationship is 1:123 in case
of Asiatic zone, 1:1:8 in African zone and 1:026 in Latin American Zone. Some of the countries
having more than 1 tonne / ha of productivity are Malaysia and Thailand In Asiatic Zone,
Tanzania and Kenya in African Zone, Guatemala and Panama in Latin American Zone. In this
group Malaysia and Philippines are recent emerges for cashew production, gaining the
knowledge of advanced technologies from other well — developed countries.
Value of production
The details regarding the value of production of companies are shown
below:
Table 4.1
Classification according to the value of production
Sl.no Year Average
1 2020 1127.625
2 2021 1252.72
SOURCE: Primary data
It is clear from the table the value of production in 2020 is 1127.625
and the average of 2021 is 1252.72.
Fig:4.1
Classification according to the value of production
VALUE OF PRODUCTION
1350
1340
1330
1320
Average
1310
1300
1290
1280
1270
1260
2021-22 2022-23
Details of nut procurement
The details regarding the details of nut procurement of companies are
shown below:
Table 4.2
Classification according to nut procurement
Sl.no Year Average
1 2020 1187.51
2 2021 1262.75
SOURCE: Primary source
It is clear from the table the details of nut procurement in 2020 is
1187.51 and the average of 2021 is 1262.75
Fig:4.2
Classification according to the value of production
Average
1280
1260
1240
1220
1200
1180
1160
1140
2020 2021
Raw nut cost per bag
The details regarding the details of raw nut cost per bag of companies
are shown below:
Table 4.3
Classification according to raw nut cost per bag
Sl.no Year Average
1 2020 1293.31
2 2021 1342.54
SOURCE: Primary data
It is clear from the table the details of raw nut cost per bag in 2020 is
1293.31 and the average of 2021 is 1342.54.
Fig:4.3
Classification according to raw nut cost per bag
Average
1350
1340
1330
1320
1310
1300
1290
1280
1270
1260
2020 2021
Packaging and forwarding
The details regarding the details of packaging and forwarding of
companies are shown below:
Table 4.4
Classification according to packaging and forwarding
Sl.no Year Average
1 2020 129.20
2 2021 132.20
SOURCE: Primary data
It is clear from the table the packaging and forwarding in 2020 is
129.20 and the average of 2021 is 132.20
Fig:4.4
Classification according to packaging and forwarding
Average
132.5
132
131.5
131
130.5
130
129.5
129
128.5
128
127.5
2020 2021
Office and administration
The details regarding the details of office and administration of
companies are shown below:
Table 4.5
Classification according to office and administration of companies
Sl.no Year Average
1 2020 54.34
2 2021 62.56
SOURCE: Primary data
It is clear from the table the details of office and administration in
2020 is 54.34 and the average of 2021 is 62.56.
Fig:4.5
Classification according to office and administration
Average
64
62
60
58
56
54
52
50
2020 2021
Interest and bank charges
The details regarding the details of interest and bank charges of
companies are shown below:
Table 4.6
Classification according to interest and bank charges
Sl.no Year Average
1 2020 59.81
2 2021 64.56
SOURCE: Primary data
It is clear from the table the details of interest and bank charges in
2020 is 59.81 and the average of 2021 is 64.56
Fig:4.6
Classification according to interest and bank charges
Average
65
64
63
62
61
60
59
58
57
2020 2021
Average labour cost in roasting per bag
The details regarding the details of average labour cost in roasting per
bag of companies are shown below:
Table 4.7
Classification according to average labour cost in roasting per bag
Sl.no Year Average
1 2020 10
2 2021 13
SOURCE: Primary data
It is clear from the table the details of labour cost in roasting in 2020
is 10 and the average of 2021 is 13
Fig:4.7
Classification according to average labour cost in roasting per bag
Average
14
12
10
0
2020 2021
Average labour cost in shelling per bag
The details regarding the details of average labour cost in shelling per
bag of companies are shown below:
Table 4.8
Classification according to average labour cost in shelling per bag
Sl.no Year Average
1 2020 125
2 2021 148
SOURCE: Primary data
It is clear from the table the details of labour cost in shelling in 2020
is 125 and the average of 2021 is 148.
Fig:4.8
Classification according to average labour cost in shelling per bag
Average
150
145
140
135
130
125
120
115
110
2020 2021
Average labour cost in boorma and cooling per bag
The details regarding the details of average labour cost in boorma and
cooling per bag of companies are shown below:
Table 4.9
Classification according to average labour cost in boorma and
cooling per bag
Sl.no Year Average
1 2020 10.00
2 2021 62
SOURCE: Primary data
It is clear from the table the details of average labour cost in boorma
and cooling in 2020 is 10 and the average of 2021 is 62 .
Fig:4.9
Classification according to average labour cost in boorma and
cooling per bag
Average
70
60
50
40
30
20
10
0
2020 2021
Average labour cost in peeling per bag
The details regarding the details of average labour cost in peeling per
bag of companies are shown below:
Table 4.10
Classification according to average labour cost in peeling per bag
Sl.no Year Average
1 2020 125
2 2021 165
SOURCE: Primary data
It is clear from the table the details of peeling in 2020 is 125 and the
average of 2021 is 165.
Fig:4.10
Classification according to average labour cost in peeling per bag
Average
180
160
140
120
100
80
60
40
20
0
2020 2021
Average labour cost in grading per labour
The details regarding the details of average labour cost in grading per
bag of companies are shown below:
Table 4.11
Classification according to average labour cost in grading per bag
Sl.no Year Average
1 2020 28.84
2 2021 39.94
SOURCE: Primary data
It is clear from the table the details of average labour cost in grading
per bag in 2020 is 28.84 and the average of 2021 is 39.94.
Fig:4.11
Classification according to average labour cost in grading per bag
Average
45
40
35
30
25
20
15
10
5
0
2020 2021
Average labour cost in supervision per bag
The details regarding the details of average labour cost in supervision
per bag of companies are shown below:
Table 4.12
Classification according to average labour cost in supervision per
bag
Sl.no Year Average
1 2020 20.31
2 2021 27.20
SOURCE: Primary data
It is clear from the table the details of average labour cost in
supervision per bag in 2020 is 20.31 and the average of 2021 is 27.20.
Fig:4.12
Classification according to average labour cost in supervision per
bag
Average
30
25
20
15
10
0
2020 2021
Average depreciation on asset per bag
The details regarding the details of average labour cost in depreciation
on asset of companies are shown below:
Table 4.13
Classification according to average labour cost in depreciation on
asset
Sl.no Year Average
1 2020 8.9
2 2021 10.2
SOURCE: Primary data
It is clear from the table the details of depreciation per asset in 2020 is
8.9 and the average of 2021 is 10.2.
Fig:4.13
Classification according to average labour cost in depreciation on
asset
Average
10.5
10
9.5
8.5
8
2020 2021
Average total of other expense per bag
The details regarding the details of average labour cost in other
expense per bag of companies are shown below:
Table 4.14
Classification according to average labour cost in other expense
per bag
Sl.no Year Average
1 2020 354.34
2 2021 362.56
SOURCE: Primary data
It is clear from the table the details of average labour cost in other
expense in 2020 is 354.34 and the average of 2021 is 362.56.
Fig:4.14
Classification according to average labour cost in other expense
per bag
Average
364
362
360
358
356
354
352
350
2020 2021
Average profit per bag
The details regarding the details of average profit per bag of
companies are shown below:
Table 4.15
Classification according to average profit per bag
Sl.no Year Average
1 2020 283.5
2 2021 316.32
SOURCE: Primary data
It is clear from the table the details of average profit in 2020 is 283.5
and the average of 2021 is 316.32.
Fig:4.15
Classification according to average profit per bag
Average
320
310
300
290
280
270
260
2020 2021
PROBLEMS ASSOCIATED WITH WORKING CAPTITAL
The table regarding the details which related with working capital of
companies are shown below:
Table 4.16
PROBLEMS ASSOCATE WITH WORKING CAPITAL
SL.NO Variables Factories Percentage
1 Huge legal 28 70
formality
2 High interest 6 15
3 Shortage of 4 10
security
4 Small amount 2 5
of financial
assistance
SOURCE: Primary data
The table represent the problems which are to be associate with the
working capital. Here the huge formality is to be faced by several
factories. Others are just below that the problems.
Fig:4.16
Problems associate with working capital
2, 5%
4, 10%
6, 15%
28, 70%
4, 10%
5, 13%
16, 40%
5, 12%
10, 25%
PROBLEMS IN MARKETING
2, 5%
2, 5%
10, 25%
26, 65%
8, 20%
13, 32%
9, 23%
10, 25%
PREOBLEMS OF IMPORT
5, 13%
5, 13%
15, 37%
8, 20%
7, 17%
SUGGESTIONS
• Adequate government support should be provided
• The higher prices in the cashew nuts should be reduced
• Trained and experienced manpower should be employed
• Welfare programmes for labourers and moderate mechanization should be provided
• There should not be any problems related to the quality and quantity of the raw nuts
• There should be an adequate marketing infrastructure
CONCLUSION
The project has a whole describes about the cost and profit analysis of cashew
industries. India primarily exports Cashew Kernels and very small quantities of
cashew nut shell liquid, during 2021-22, the cashew exports by value grew from US$
420 million in 2020-21 to US$ 452 million in 2021-22, witnessing a growth of 7%.
Continue to support the establishment of small-scale factories; consider how to make
affordable credit available to establish more factories; provide business development
services for better management.
BIBLIOGRAPHY
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processing unit and production cost of cashew Apple syrup”, The cashew, Vol xvi,
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Vol.xv, n02, p.p14, April 2001.
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Cashew, Vol. xvi, No.3, p.p 21-23.
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APPENDIX
VALUE OF PRODUCTION
YEAR QUANTITY VALUE
4. If yes (ranking)
• High price
• Uncertainty in the supply
• Poor quantity of nuts
• Diversification of nuts to other state
• Scarcity of local nut
5. Raw nut cost per bag (i) within the state
(ii) other state
(iii) import
PART -2 PROCESSING
1. Raw nut cost per bag
Year Raw nut Raw nut Total
expense