Export of cashew nuts

Presented by: Gargi Vohra, R740209037, MBA IBM III sem UPES

Introduction
upper class nut. snack market as a roasted and salted snack. Grades / Varieties Whole grades : W180, W210, W240, W320, W450. terms are used : White (W), scorched (S) and second scorched (SS).

Grades of Indian Raw Cashew/nut Per Kg. Extra special Special Good Fair

Type No. of nuts 100 150 160 180

Indian scenario..
India is the second largest producer of cashew nuts after Vietnam, Vietnam (827000 tons) , India (460000 tons). India contributes to over half of the world cashew exports. It annually exports around 4 million cartons in one year. Vietnam gives a tough competition to India in the world market as it is the largest cashew producing nation of the world but still India is ahead in this scenario. Major importing countries of Indian cashew nuts are:-

Statistics
Hyperlink C:\Documents and Settings\500007032\Desktop\EXPORT OF CASHEW KERNELS FROM INDIA DURING 2007.docx

Indian scenario..
The price for super quality cashew-nut in the national market ranges from Rs 500 to Rs 550. The domestic cashew processing industry requires around 1.2 million tons of raw cashew a year to meet export and domestic demand. Kerala is the highest producer of cashew nut. It is also grown in Maharashtra, Goa, Karnataka ,Tamil Nadu, Andhra Pradesh, Orissa , West Bengal, Manipur, Meghalaya, Tripura, Andaman and Nicobar Islands and Chhattisgarh.

Standard specifications for Indian cashew kernels for purposes of export have been laid down by the Government of India under the Export (Quality Control and Inspection) Act 1963. The Government Act prescribes 33 different grades of cashew kernels. Of these, only 26 grades are commercially available and exported.

Indian scenario..
Domestic demand is also growing at a 5.3 per cent annually. The export performance and indigenous consumption of cashew kernels has been growing at the rate of 4% to 10% per annum . At present in India there are 1098 processing units with an installed capacity of 1 million tonnes of raw nuts. Indias production was around 6.35 lakh ton in 2009-10 as against 6.3 lakh ton In 2008-09.

The Cashew Export Promotion Council of India (CEPCI) under the aegis of Ministry of Commerce, Government of India (1955) has been playing an important role in promoting exports of cashew kernels by undertaking various activities such as:
Organizing global buyer-seller meets, Organizing studies on the nutritional aspects of cashew, Assisting cashew festivals organized for promotion of cashew , Promoting setting up of cashew apple extraction units, promoting Indian branded cashew packets exploring new markets, promoting production of quality raw cashew nuts, etc.

Indian Exporters of Cashew Kernel Aleph Enterprises prathibha Allied Cashew Industries Alphonsa Cashew Industries Ambadi Cashew Ebenezer Cashew Co Ebenezer Cashew Co. Quilon Emgeeyaar Cashews Emmanuel Cashew Industries

The major trading centers of cashew nuts in India are

Palasa , Andhra Pradesh. Kollam, Tamil Nadu Manglore , Karnataka Quilon ,Kerala Kochi , Kerala

Storage and handling

Cashew nut is hand picked and manually handled in various stages of operation-right from picking at farm level to processing at factory level and to storage and transportation.

FILLING AND PACKING The grated and moisture conditioned cashew kernel are filled in 18Lt/ square tins, (11.34kg) to a tin.

The Cashew kernel are fed into the vibratory filling machine through a pneumatic Foreign Matter Segregator (PFMS). 8 Tins (Leak tested and Tar weighed) are filled at a time.

 Filled tins are then weighed for a net weighed of 11.34 kg plus or minus 10gm using electronic weighing scale.
The weighed tins are Vita Packed. Vita packing is the process of vacuumising and injecting inert gas viz. Carbondioxide or Nitrogen into the cashew kernel filled tins. The gas infused tins is hand-soldered hermetically using lead free solder. Two tins are packed in a unit carton and strapped and stencil marked for shipment. The consignment is shipped after pershipment inspection formalities.

Modern Packaging system - Cashew Kernels can be also being packed in multilayer flexible pouches; gas flushed and sealed 25 pounds net per pouch. All importers in USA and Europe prefer this system of packing.

Export ..
It is not included in FMS and FPS.

HS CODE : Item 14 of the Fourth Schedule. Chapter 8: Edible Fruit and Nuts; Peel of Citrus Fruit or Melons.

ITC HS CODES OF CASHEW

ITCHSCode 08013100 08013200 08013210 08013220 Product Cashewnutsinshell Cashewnutsshelled Cashewkernel,broken Cashewkernel,wholes

08013290
08135010 20081910 20081930 13021920 13021930

Cashewnutsothers
Mixturesofnuts

Cashewnutroasted,saltedorroast ed&salted
Nutsotherwisepreparedorpreser ved Cashewnutshellliquid(CNSL),cru de Purified&distilledCNSL(cardanol)

License requirement
It does not require license, comes under the freed item list. Requires documents like phytosanitary certificate issued by the exporting country. The inspection conducted by inspection authority and fumigation.

 Custom duty on cashew nut is 35 % . Duty drawback rate is 4%. On an average exporter earns rs 10 to 12 per kg above the price.

Quotation sent by an Indian exporter to South Africa importer of Cashew Nut -Fortium Global Cote dIvoire SARL.

Type: Cashew Nut Cultivation Type: Common Processing Type: Roasted Style: Fresh Grade: W320 Use: Eatable White: Whitish Port: Kolkata Minimum Order Quantity: 5 Metric Ton/Metric Tons.

TECHNICAL CHARACTERISTICS
Max Nut Counts per kg: From 160 to 180 max Max Defectiveness: 0.5% max Max Moisture%: 7% max Crop Year: Current PACKAGE: Jute Bags of 80 Kg/Net LOADING: 1 x 20 Dry - FCL Container (18 MT) mode: mainly through sea as sent in bulk.

Quality Control and Pre-shipment Inspection

Exports of cashew kernels from India are normally subject to voluntary quality control and pre-shipment inspection. Inspection of cashews is being conducted under the consignment-wise inspection. It is ensured that the product is processed and packed as per the standards prescribed, by drawing samples from the finished product. Export of roasted and salted cashew kernels are also normally subjected to voluntary quality control.

Packing and Standard Weight

Cashew kernels in bulk are packed in four gallon prime tins with a net weight of 11.34 Kg (Or 25 lbs) in each tin. The filled tins are then vacuumised and filled with carbon-di-oxide gas and sealed. Two such tins of the same grade are packed in a carton for export. The net weight of each carton is thus 22.68 Kg. (50 lbs.). Some manufacturers also pack in tins of 10kg net to suit the requirements of buyers in certain markets. Recently,some exporters have started using flexible packs instead of tins as many buyers opt for new generation flexible packs.

Shipping Specifications
The overall dimensions of a carton are about: Length 490mm Breadth 240mm Height 350mm Overall volume 0. 041 Cu. M/Carton.

 Cashew shipments from India are mainly in 2Oft. containers which carry about 650-700 cartons. Requests for less than a container load are also accepted by exporters in India. Freight is charged per Cubic Metre on volume basis. Freight for full container load is fixed and the same is cheaper than the freight for part container load (LCL).

Contract Terms
Contracts are normally made on FOB or C&F basis. Pricing in international trade in cashew is in US Dollars per lb. Current and forward price quotations in US $ and other currencies are available on request directly from member exporters of the Council. Business in cashew is done on an offer and acceptance basis between buyers and sellers by telephone, telex or cable, since the prices are subject to frequent fluctuations.

 The cost of insurance is borne by the buyer. At the time of contract, the month of shipment, grade, price etc., are to be clearly indicated. Sometimes, exporters offer commodity for shipments upto six months in advance. Export dealings are usually finalised on the basis of the opening of 100% irrevocable Letter of Credit by the buyer in favour of the shipper. The LC is opened immediately on execution of contract or one month prior to shipment.

 SHIPMENT DOCUMENTS REQUIRED. a. Bill of Loading (B/L). b. Original Invoice. c. Sanitary Certificate. d. Fumigate Certificate e. Certificate of Origin. f. Certificate of Inspection. 10. PAYMENT TERMS: Bank Transfer for 30% of Total Amount at moment of Close/Confirm ORDER and 70% balance against presentation of Confirmed / Irrevocable LC, Payable at sight against Export Documents presentation.

The cashew nuts shall conform to certain basispecification based on different parameters which are more fully described below :
Count : indicated by the number of Raw Cashew nuts per Kg. The Number of counts usually ranges from 140 nuts per kg- 240 nuts per kg.

Moisture : Cashew nuts inherently contain moisture. The moisture can range from 5% to 14%. However, a higher content of moisture is likely to increase defective / rotten / damaged nuts even in transit. It is advised that the moisture content shall be to a maximum of 10% at the time of loading but the optimum would be between 6% and 8%

 Admixture : Cashew nut being a horticultural crop is likely to have admixture. The seller shall specify clearly what percentage by weight shall be the maximum admixture of the consignment at destination. It is advisable that nuts are cleaned thoroughly after collection and dried before bagging. Packing : Cashew nuts shall be packed in sound jute gunnies, preferably new or once used and should withstand the conditions of transportation by sea. Any form of insecure packing is likely to lead to spillage in-transit which will result in loss of weight as also damage to the nuts.

 Fumigation Certificate : As Cashew nut is a horticultural produce, it needs to be fumigated before dispatch. The recommended fumigant is Aluminum Phosphide. Payment Conditions : Payment is usually by irrevocable Letter of Credit. Buyer will specify whether payment will be on sight or on usance basis. The seller may offer credit for 30 - 180 days depending on his ability to do so Packing List : A Packing List should be available indicating number of packages, marks thereon which will clearly identify the Cargo to the buyers. Particular care about this should be taken if the shipper has more than one consignee at the destination port.

 Phytosanitary Certificate : As Cashew nut is a horticultural product, it is essential that a Phytosanitary Certificate from the country of origin is available which is issued by a Government Authority. Phytosanitary certificates are issued to indicate that consignments of plants, plant products or other regulated articles meet specified phytosanitary import requirements and are in conformity with the certifying statement of the appropriate model certificate. Certificate of Origin : Certificate of Origin is required from a competent authority as a part of the documents.

 Weight Certificate : Weight Certificate duly authenticated by a competent authority as insisted on by the buyer is an important document required at the time of export of Cashew nuts. CITES Certificate - A Cites certificate must be applied for, to permit re-export of any articles bought by a client, regardless of the quantity of bags or their dimensions. This certificate is temporary, that is, it is issued in the name of the purchaser of the product and is valid only for this one sale. So the buyer would have to apply for a new certificate before re-selling the product for commercial purposes.

 Certification : Certification of quality at port of loading is essential. Usually, the well accepted Certifying agency is SGS international agency
Insurance : Insurance is usually covered by buyers. However, if insurance is offered by sellers, then claim should be specified clearly including surveyor at destination and the office which settles the claims. Other standard documents like Commercial Invoice, Bill of Lading as specified in the Letter of Credit, Certificate about shipping line etc., will be informed at the time of opening of Letter of Credit.

Export promotion schemes..

Export Prospects Against the backdrop of endowment of various favorable factors such as availability of cheap labor and the huge demand for cashew both in the domestic and overseas markets for cashew, India offers tremendous potential for increasing its production and exports.

To tap full potential, India has to formulate a cohesive export strategy. Some of the points which merit attention of the policy makers include: Increasing the indigenous production of raw cashew nuts so as to make the country self sufficient in the production by applying advanced technologies in the cultivation of cashew developed by various research bodies. Launching of vigorous publicity campaign about the quality of our cashew abroad.

In The Eleventh Year Plan

The Govt. of India, Department Of Commerce has accorded approval to the Export Promotion Scheme of the Cashew Export Promotion Council of India to implement a scheme titled Modernization & Diversification Scheme with the following four components under Eleventh Plan. PROCESS UPGRADATION/ MODERNIZATION OF CASHEW PROCESSING UNITS SETTING UP FACILITIES FOR VALUE ADDITION/ CONSUMER PACKING OF CASHEW KERNELS ADOPTION OF NEW PACKAGING SYSTEMS IMPLEMENTATION OF INTERNATIONALLY ACCEPTED QUALITY SYSTEMS LIKE ISO, HACCP,

Developing an efficient export marketing network to optimize the production and exports. Setting up of more quality control laboratories for testing the quality of cashew Intensifying export promotion efforts in major markets on the one hand and exploring new markets for exports, on the other. With the implementation of the above steps, exports of cashew from the country are set to make a breakthrough in the coming years.

Conclusion
As India has good climatic conditions and cashew nuts demand is very high in international market , India should revive its position of the largest producer and exporter of cashew nuts and export it to other countries as it is a good source of generating foreign exchange.

Thank you