Visakhapatnam: The demonetisation drive has crippled the cashew processing industry in Srikakulam district which is largely dependent on the festival season from October to January for nearly 40-50 per cent of the trade throughout the year.
According to sources, Srikakulam district is home to around 330 registered cashew processing units out of which around 260 are located in and around Palasa mandal. The sources said more than 90 per cent of the cashew processing units have stopped production after the demonetisation drive was announced due to payments issues related to labour and sale of processed cashew. The processed cashew is sold in the range of around Rs 450-850 per kilo depending on the quality. However, the prices have dropped by around Rs 75-100 per kilo after the demonetisation drive was introduced, according to the sources.
The cashew processing industry provides direct employment to around 10,000 people while another 5,000 people are indirectly dependent on the industry for their livelihood.
Speaking to TOI, Palasa Cashew Manufacturers Association president M Srinivasa Rao said, “Sale of processed cashew is seasonal and based on festivals. Most of our sales happens between Dasara and Sankranti festival. While Deepavali sales were not affected, there is a demand during this time of the year for local festivals in Bihar and neighbouring areas. Also, December is the season for weddings during which time there is a demand for cashew. These sales have been hit due to problems with transactions.”
Furthermore, he said, “We are able to withdraw around Rs 50,000 per week, but the production cost per week comes to around Rs 1.25 lakh and we are facing difficulties in making payments.” Also, he said some of the cashew processing units are facing issues in imports from African countries as it is stuck at different ports due to the cash crunch.
Another industrial unit manager said, “Many of the traders who had paid a part of the advance for procuring the cashew for the festivals in Bihar are not able to take the stock of processed cashew as they are finding it difficult to find buyers. During this time of the year, on an average, around 400 tonnes of raw material is used per day for production, but now not even 20-30 tonnes is being used in Palasa by the units for processing the cashew.”
Proprietor of Modern Cashew Ganesh Raju said, “Cash flow has stopped due to which Palasa market has been hit. If this move had been introduced in February or March, then it would not have affected the region as much as now.”