New Delhi, Jan 20 (KNN) Due to rising domestic demand, the Indian cashew processing industry is expected to witnesses a 15 per cent year-on-year growth in revenue, taking the industry beyond Rs 30,000 crore in this and the next financial year, according to a Crisil Ratings report.

According to the report published on Thursday, India remains the world's largest consumer of cashews, processing almost half of the global cashew kernels and consuming 40 per cent of the global output.

Currently, India is only exporting 10 per cent of its entire output, 35 per cent less than the pre-pandemic times. This is also due to the rising domestic demand, the report stated.

Availability of cashew kernels at competitive prices from Vietnam, which accounts for around half of the annual global output, has allowed export destinations to replace their purchases, the report added.

The cashew kernel prices are likely to increase by 5 per cent to Rs 615-625 per kg this fiscal due to the rising demand that is led by the opening of hotels, restaurants and cafes after the pandemic.

On the other hand, it said that increased acreage leading to higher raw cashew nuts (RCN) production is pulling down RCN prices, while continued end-user demand creates the reverse pull-on prices.

Hence, RCN prices are seen stable at Rs 95-100 per kg for this financial year and the next, the report said, adding that the spread between kernel and RCN prices is expected at Rs 230-250 per kg this fiscal (Rs 210-230 per kg last fiscal) and is likely to remain at similar levels next fiscal as well.

"Cashew processors are currently operating at near-full capacity. With demand increasing, we anticipate they will increase capacity by a fifth over the medium term. But, there will be low reliance on debt to fund this as well as the increased working capital requirement, because cash flows are robust," Crisil Ratings Director Himank Sharma said.

However, delays in crop arrival from Africa or lower raw cashew nuts (RCN) output due to unanticipated rains and pest attacks pose downside risks to the growth estimates, the report added.

As per the report, after India, the second highest country in the consumption of the cashews is United States, accounting 10-15 per cent of global consumption.  (KNN Bureau)