Karkala
The cashew processing industry along Karnataka’s coast is facing mounting pressure due to the weakening rupee against the US dollar and ongoing tensions in the Middle East. Industry stakeholders say rising import costs and logistical disruptions have significantly impacted operations, pushing the sector into a challenging phase.
India requires around 22 lakh tonnes of raw cashew nuts annually, but domestic production meets only about 7 lakh tonnes. The remaining quantity is largely imported from West African countries. With the rupee depreciating from around ₹86–87 per dollar last year to nearly ₹95 now, the cost of importing raw cashew has increased by ₹5–6 per kilogram. This has resulted in an 8–10% rise in overall production costs, according to industry sources.
Compounding the problem, the Middle East conflict has disrupted container movement, particularly around the Strait of Hormuz near Dubai. This led to a shortage of empty containers in Africa and delays in shipments. As a result, exporters were forced to bear significantly higher freight and risk charges, with costs rising by nearly $1,000 per container.
Though container availability has slightly improved, uncertainty persists due to the volatile geopolitical situation. Meanwhile, processed cashew kernels are not fetching adequate prices in the market, further squeezing margins.
The industry, which supports thousands of families in Dakshina Kannada and Udupi districts, now faces an uncertain future without policy support and stable global conditions.
