India’s Domestic Cashew Consumption Slows, Imports Down 15% YoY

Published Sep 22, 2023
India's cashew consumption has been steadily declining since its peak in 2022, attributed to rising prices and reduced availability. However, consumption remains well above the five-year average. The first seven months of 2023 have witnessed a 15% drop in imports, with total imports for 2023 projected to reach around 1.1 to 1.2 million mt, indicative of a further deceleration in domestic consumption.

India has long been the world’s top cashew consumer, consuming well over 300,000 metric tons (mt) of cashew kernels annually. With the anomalous events over the last few years, there has been a shift in cashew consumption and compositions. High living costs post-pandemic led to a significant decrease in cashew consumption in the United States (US) and Europe, the largest consumers of cashews after India. Cashews are primarily consumed as a snack in the US and Europe. Meanwhile, in India, cashew consumption increased, but this was mostly driven by the use of cashews as a food ingredient.

Cashews have a long history of being enjoyed as a snack in India, particularly during weddings and religious celebrations. However, they have recently become more popular as an ingredient in savory dishes such as curries and biryanis. Additionally, their use in desserts and confectioneries has been rising. The India Directorate of Cashew Research estimates that more than 60% of India’s cashew consumption is indirect. Moreover, the popularity of cashews has spread from the southern states, where most of them are produced, to other regions further north, both as a snack and an ingredient.

The industries that have seen the most significant increase in cashew consumption are those where a slightly lower-quality cashew nut is acceptable. Cashews used in curries or those used in cooking, for instance, can be of slightly lower quality compared to those intended for the snacking industry. The global affordability of cashews has further fueled their consumption and their use as an ingredient in a variety of dishes.

This culminated in 2022 when India’s raw cashew nut (RCN) imports soared to 1,375,020 mt, equivalent to around 303,000 mt of cashew kernels. Add to that the domestic production of around 150,000 mt, on a kernel basis, and consumption is estimated to have topped 400,000 mt in 2022.

In 2023, there has been a noticeable decline in cashew consumption, primarily due to households grappling with rising living costs and inflation, and cashew prices have increased over recent months. India’s RCN imports for the first seven months of 2023 at 727,442 mt dropped 15% YoY but remained 25% higher than the five-year average. Based on historical data, projections show imports could reach 1.1 to 1.2 million mt for 2023. In addition, India’s domestic production also decreased slightly in 2023, estimated at around 650,000 mt. Additionally, the availability of cashews has diminished because of a resurgence in consumption in the US and Europe, as well as growing demand in the Middle East. This is evident from Vietnam’s cashew kernel export figures, which already stood at a record 399,000 mt, up 16% YoY.

Source: India Ministry of Commerce and Industry, Tridge

India's cashew consumption is evidently sensitive to price changes. When prices declined, cashews gained popularity, especially as a food ingredient. However, as prices rise due to a resurgence in global demand and a supply-demand equilibrium, consumer demand in India is anticipated to decline. Since the beginning of the year, cashew prices in India's main wholesale markets have risen by 7%. This upward price trend is likely to persist, leading to a further decrease in domestic demand.

Source: Tridge

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