The cashew processing sector in Kerala has ground to a halt as severe cargo delays choke the entire supply chain. Shipping bottlenecks, especially around the critical Strait of Hormuz, have hit the industry from ends, blocking the import of raw cashew nuts (RCN) and stalling the export of finished kernels.

Exporters are facing a severe crisis as shipments to Gulf Cooperation Council (GCC) countries have almost stopped moving. With finished goods stuck in transit and payments delayed, cash-strapped private factory owners have been forced to down their shutters.

‘Already in trouble’

The sudden closures have hit workers hard, leaving thousands of cashew labourers without employment. “The industry was already in deep trouble, and our working days had shrunk to almost nothing over the last few years. But what we are facing right now is different. For the past several days, everything has just ground to a halt and nobody can tell us when operations will resume,” says Sudha, a cashew worker.

Adding to the industry’s woes, a fluctuating dollar rate has heavily impacted local businesses by pushing up the cost of raw material. “We are actually right in the middle of our peak season, but it feels like the off-season,” says Shan, a cashew processor. “The period from March until October is usually the busiest time of the year for us, but these developments have brought everything to a complete standstill,” he adds.

Already reeling from vulnerabilities like comparatively higher wages, lack of mechanisation and RCN shortages, the industry has been plunged into a deeper crisis by recent disruptions.

Since the State’s domestic RCN production is critically low, factories must rely heavily on imports from countries like the Ivory Coast, Ghana, and Tanzania to keep their wheels turning. “There are multiple reasons for processors to close their units. Despite demand, we are forced to stop production,” says Dileep, a processor.

With no immediate end in sight to the maritime delays and rising raw material costs, processors are bracing for a prolonged crisis.