PhD

Cashew (Anacardiumoccidentale L) often referred to as ‘wonder nut’ is one of
the most valuable processed nuts traded on the global commodity markets and also an
important cash crop. In 2021, the global cashew nut production was 39 lakh tonnes, led
by Vietnam and India with a combined 39 percent of the world total (FAOSTAT, 2021).
Vietnam (20%) is the largest producer of cashew and the major competitor for India
(19%) in cashew export. Vietnam exports 54.24 percent of the total cashew traded in the
world compared to India’s share of 16.32 percent (Rajesh, 2019). India is the secondlargest
exporter of cashew in the world. India’s export of cashew was 67647 metric tonne
valued at 3867.16 crore in 2021. The major markets for Indian cashew during 2021
were the UAE, Netherlands, Japan and USA (GoI). India is the largest importer of raw
cashew nuts from African nations.
The Cashew Export Promotion Council of India (CEPCI) is an agency to promote
the export of cashews and acts as an intermediary between global importers and Indian
exporters of cashew. Even though Kerala stands 5th position in the production of the
cashew in India, it is ranked first in the processing and exporting followed by Tamil
Nadu, Karnataka and Andhra Pradesh (GoI, 2021). However, currently, there is a
continuous decline in both the area and production of cashews in Kerala from 2013
onwards (Annual Report of CEPCI, 2020). The cashew processing industry in Kerala
which has been facing lot of problems due to increased wage rate, trade union issues,
continuous use of traditional methods of processing (labour intensive), stiff international
competition, fluctuations in international markets etc. The cost of production in Kerala is
too high compared to other states. It is around . 3400 for a bag in Kerala compared to
1000 to 1800 in other states. Besides in other states the industry was able to improve
the productivity by mechanisation and automation processes as a result it was multiplied
by two or three times. In Kerala due to high resistance from the labour force this could
not be materialised. More over high dependence on imports and price fluctuation affected
our cashew exports. Cashew export processing unit also face supply crunch amid low
xiv
domestic output. The above listed problems are serious export marketing problems faced
by the cashew export industry. Though there are lot of literature related to the trend and
pattern and problems of cashew exporters, the study related to export marketing strategies
and the determinants of cashew exports is very limited. In this context a study of
“Marketing strategies for export of cashew in Kerala” is highly imperative. The study
will help to contribute to this research gap. Moreover, the findings of the study will help
to identify the existing export strategies and the problems faced by cashew exporters
which will in turn help to improve the existing status of cashew exports and find a
solution to the problems of cashew exporters.
The objectives of the study are: to analyse the trend and pattern in cashew
exports, to analyse the export marketing strategies for export of cashew in Kerala, to
identify the major determinants of cashew exports in Kerala and to examine the problems
faced by the cashew exporters in Kerala.
The study used both primary and secondary sources for the collection of data.
Secondary data were collected for analysing the trend and pattern in cashew exports from
authenticated sources like Cashew Export Promotion Council of India (CEPCI),
Directorate of Cashew nut and Cocoa Development Board (DCCD), Department of
Economics and Statistics, Ministry of Agriculture and Farmers Welfare, Directorate
General of Commercial Intelligence and Statistics (DGCIS), Agricultural and Processed
Food Products Export Development Authority (APEDA) and UN Trade Statistics.
Primary data were collected from the cashew exporters of Kollam district in
Kerala. A sample of 68 exporters who were continuously exporting cashew for the last
five years were selected through stratified random sampling method. To analyse the trend
and pattern in cashew exports, variables like area, production, productivity of cashew
nuts in India and Kerala, price of raw cashew nuts in Kerala, country wise export and
country-wise import during the period from 1990-91 to 2019-20 (30 years), and the
variables like import of raw cashew nut to India and export of cashew kernel from India
were measured. The collected data were analysed with Annual Growth Rate (AGR),
xv
Compound Annual Growth Rate (CAGR), Instability Index, Regression Analysis and
Kinked Exponential Method. To analyse the export marketing strategies of cashew
exporters in Kerala, export marketing mix strategies (product, packaging, pricing,
payment, distribution and promotion) were taken and analysed by using percentage
method. The major determinants of cashew exports were identified by using variables
such as legal and political factors, socio-cultural, geographic, economic, export and
import policy, international trade agreement, market logistics, competitive and cost
factors. Indices method and factor analysis were used to identify the major determinants
in cashew export. Internal and external factors were taken into account for identifying the
problems of cashew exporters. Garrett ranking method was employed to examine the
problems faced by the exporters in Kerala.
The trend in production of cashew in India and Kerala state has witnessed a
positive growth. The demand for cashew nuts is always increasing in India and also at the
world level. On the other hand, in India, the cashew export sector witnessed a negative
growth in terms of quantity/value of export throughout the study period due to high
competition from other countries and the slashing of the export incentives. Compared to
export, import of raw cashew nut showed an increasing trend, because the domestic
production of cashew in India is not sufficient enough to fulfill the requirement of the
international demand of cashew kernels. The study on pattern of cashew export showed
that USA, Netherlands, Japan, UAE and UK were found the most stable markets for
Indian cashew. Ivory Coast, Tanzania, Guinea Bissau, Benin and Ghana were found as
the major importing countries of raw cashew nuts to India. Additionally, the price of raw
cashew nuts in Kerala showed positive growth till 2018. The comparatively lower price
of imported raw cashew nuts increased the imports of raw cashew nuts and reduced the
demand for domestic raw cashew nuts which in turn resulted in a fall in the price of the
domestic cashew after 2018.
With respect to the export marketing strategies, the strategies related to product,
price, distribution and promotion were analysed. All the exporters are following only the
xvi
strategies directed by CEPCI nomenclature. The major export product strategies followed
by the exporters are offering certified cashew, specified grades of cashew, premium
cashew, crispier cashew, level of infestation, minimum broken percent of cashew and
high-quality cashew. All the exporters were following premium and competitive pricing
as pricing strategies. Further they focus on the distribution strategies like reaching
customers via their mail order / WhatsApp/ online modes, exporting through shipping
mode and ensuring timely delivery. The promotion of the cashew is ensured by giving
samples to new customers, attending trade fairs organised by CEPCI (Kaju India) and
BSM (Business Sellers Meet), publishing advertisements in the CEPCI Directory;
permitting visitors to the exporting company, sending brochures, photographs and price
lists by postal/online mode to their clients.
From the factor analysis, quality of the product, the language and communication
of the product package, the proximity of the international buyers to India, food quality
standards and location where cashew is processed were found as the major critical
success factors of cashew export market.
After examining the problems faced by the exporters of cashew it is found that
they were facing both internal and external problems. Exporters were confronted with
internal problems such as high processing costs, Continuous strike of labours in seaport,
high wage rates of workers, outdated shelling methods and high penalty charges for the
damage of the product during transit. Unattainable Standard Input Output Norms (SION),
competition from other countries, the impact of import duty on raw cashew nuts, export
incentives are low compared to competing countries and penalties for late clearance cargo
were the major external problems faced by the cashew exporters in Kerala.
The study put forward some suggestions to improve the cashew export sector in
Kerala. Drum roasting method (labour intensive) of processing of raw cashew nuts to
cashew kernels to be replaced with machineries in a phased manner without affecting the
premium label of cashew kernels from Kerala. This will help to reduce the cost of
processing and there by reduction in the price of cashew kernels in the export market.
xvii
Further the reduced price will attract the price sensitive customers in the international
market and will help to boost up export position of India. Effective marketing strategies
like featuring of “Indian Cashew” (like brands of almonds, pistachio) as a brand and
promoting through films, or television programmes, offering free gift to regular importers
at certain intervals etc may be implemented to increase the quantity of export of cashew
kernels in the existing markets and to attract more countries to export from India.
Abolishment of Merchandise Export from India Scheme (MEIS) negatively affected
exporting firms of cashew kernels. Recently announced Remission of Duty and Taxes on
Export Products (RODTEP) scheme has to be implemented at the earliest so as to help
the exporters. Based on the study, it is suggested that, as state of Kerala is exporting only
cashew kernels at present, if the exporters can explore the market of value added products
of cashew which could help to improve their income generation and premier position in
the export. In this regard, promotion and support from the cashew regulatory authorities
is essential.