Crisil sees revenue of India's cashew processing industry surging beyond Rs 30,000 cr next fiscal

Published 2023년 1월 19일

Tridge summary

The Indian cashew processing industry is expected to surpass Rs 30,000 crore in revenue next fiscal, marking the highest ever, with a projected 15% annual growth rate due to increased domestic demand and higher realization prices. India, being the world's largest consumer of cashews, processes nearly half of the global cashew kernels and consumes 40% of the total output. The operating margins of cashew processors are expected to improve to an all-time high of 7% this fiscal, driven by an increase in the spread between raw cashew nut and kernel prices. This growth is despite a decrease in exports, as domestic demand continues to rise, and the industry operates near full capacity, with plans to expand capacity by 20% in the medium term. However, the growth projections could face challenges due to potential delays in crop arrival from Africa or unexpected drops in RCN production due to adverse weather conditions or pest attacks.

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Original content

Higher realization and rising domestic demand will lift the revenue of the Indian cashew processing industry beyond Rs 30,000 crore next fiscal, the highest ever, driven by 15% on-year growth in revenue this fiscal and the next, said CRISIL Rating on Thursday.Operating Margins will improve 200 basis points (bps) to an all-time high of 7% this fiscal and will remain at a similar level next fiscal, supported by an 8-10% increase in the spreads between raw cashew nut (RCN) and kernel prices. A study of 30 cashew processors rated by CRISIL Ratings, which account for 15% of the industry's revenue, indicates as much. India remains the world's largest consumer of cashews, processing almost half of global cashew kernels and consuming 40% of the global output. The United States is a distant second, accounting for 10–15% of global consumption. In contrast, India exports only ~10% of its output, down from 35% in pre-pandemic times. That’s because of an overwhelming rise in domestic demand, ...

Source: Economic times