Cashew Exports affected by the Red Sea imbroglio

Cashew nut exports from South Kannada district has been seriously affected due to the steep hike in Ocean freight due to ships taking a circuitous route to European ports via South Arica’s cape of good hope as sailing through Suez canal affected by Houthi rebels attacks.

This involves 6300 nautical miles of extra sailing and 15 additional days of ocean travel for the exports to reach European ports from New Mangalore port.

The cashew shippers also have to pay 2000 US dollars additional cost per container to reach European ports. As thousands of vessels are stuck in the red sea channel, there is also the risk of huge delays in cashew cargo reaching its destination. Shortage of containers and bunching of vessels at the New Mangalore port are also other issue facing the cashew shippers.

There are around 250 cashew industries in South Kannada district and the district exports around 5,800 tons of cashew kernels per annum. It produces 2,45,000 tons per annum of cashew nuts used for both domestic consumption and Exports

Imports of raw cashew kernels are not much impacted as most of them are from East and West Africa, below the Red Sea. What is most worrying for the cashew industry is that during Covid, there was a major disruption in shipping logistics. It took almost one-and-half years to return to normal.

Cashew manufacturers are contemplating using break-bulk vessels where three to four exporters join up and bring break-bulk cargo instead of dispatching through containers.