Case: The cashew
Case: The cashew
The cashew tree is best known today for its nuts, which account for about 20 percent of the value of nuts produced worldwide—a value about equal to that of almonds or hazelnuts.
The fruit of the tree (known as the cashew apple), however, drew first attention. The Tupi Indians of Brazil first harvested the cashew apple in the wild. They later introduced it to early Portuguese traders, who in turn propagated the plant in other tropical countries. But attempts to grow the tree on plantations proved unsuccessful because the cashew was vulnerable to insects in the close quarters of plantations. Instead, some of the abandoned plantation trees propagated new trees in the wild where they thrived in the forests of India, East Africa, Indonesia, and Southeast Asia.
Several factors inhibited early use of the cashew nut. First, cashew fruit matures before the nut, so the fruit is spoiled by the time the nut can be harvested usefully. Second, the processing of cashew nuts is tedious and time consuming. In the 1920s, however, a processing industry developed in India, and the nuts became more valuable than the fruit because they became so popular among Indian consumers. India maintained a virtual monopoly on cashew processing until the mid-1970s. This monopoly
was due to a combination of three factors: First, India was the largest producer of wild cashews; second, early demand occurred in India, meaning that any other country would have to incur added transport charges in order to reach the Indian market; and third, and most importantly, the Indian workers were particularly adept at the process technology.
Cashew nut processing was performed in a very labor-intensive manner, requiring manual dexterity and low labor rates. The nut is contained beneath layers of shell and thin skin. To remove the shell, the nut must be placed in an open fire for a few minutes and then tapped (while still hot) with a wooden hammer. If the nut is broken in the tapping, its value decreases considerably. Once the shell is removed, the nut is placed in an oven for up to ten hours, after which the skin is removed by hand while the nut is still warm. Removal is done without fingernails or any sharp objects that can mark or break the surface. The nuts are then sorted and graded into 24 different categories by the size of the pieces. The highest-quality grade typically sells for about four times the price of the lowest grade, which is sold almost entirely to the confectionery industry.
Through the years several factors began to threaten India's prominence as a cashew producer. First, as demand for the nuts grew in the United States and the United Kingdom, a shortage developed. Since the nuts were grown in the wild and were unsuited to plantation growth,
India turned to East Africa, especially Mozambique, Tanzania, and Kenya, for supplies. Those countries were experiencing high unemployment and were at first eager to sell the raw nuts. Nevertheless, by the late 1980s India was still the largest nut producer (see Map 4.2).
By the 1950s India was no longer the world's major consumer, and the East African countries began to realize that they might be able to bypass India by processing the raw nuts themselves. Cashew-processing methods were well known, so there was no technological obstacle. There was another barrier, however, that blocked early competition from East Africa. The Indian labor force worked on homemade handicrafts as children, and as a result, by the time they were employed in cashew processing, they could perform delicate hand operations efficiently. Without this training, the East Africans were at a fatal disadvantage.
Although the Africans' inability to compete granted a reprieve to the Indian industry, it put them on notice that they were vulnerable to supply cutoffs. The Indian Council for Agricultural Research, the International Society for Horticultural Sciences, and the Indian Society for Plantation Crops expanded their efforts to increase India's production of raw nuts. Concomitantly, three different companies developed mechanical equipment to replace hand processing. The Sturtevant Tropical Products Institute developed a method now used by a London equipment manufacturer, Fletcher and Stewart, which cracks the shells with a steel plate. Oltre-mare Industria of Italy and Widmer and Ernst of Switzerland both developed shell-cutting
machines. Equipment was sold to East African countries and to Brazil in the 1970s. These countries decreased their raw-nut exports to India in order to maintain supplies for their own processing.
Two factors have kept India's hand-processing industry afloat. First, the machinery breaks many nuts, so Indian processors still face little competition in the sale of higher-grade cashew nuts. At any time, however, newer machinery might solve the breakage problem, again threatening the approximately 200 Indian processors and their 300,000 employees. Furthermore, there is increased competition for the lower-grade output. The second factor responsible for the enduring Indian industry is that their processors have been able to obtain more raw nuts as Indian raw-nut production has increased. Pesticide technology now makes cashew tree plantations feasible, thus increasing the number of trees per acre. Furthermore, Indian experimentation in hybridization, vegetative propagation, and grafting and budding techniques promises to increase the output per tree to five times what it was in the wild.
The Indian processors have been vulnerable to two more threats. One is political, the other technological. First, because India could no longer compete as well in its traditional North American and European markets for lower-grade nuts, a larger portion of those nuts was sold during the 1980s in the USSR, which became India's largest cashew nut customer in terms of tonnage. The USSR bought the nuts at a price above world market levels, and its buying habits were believed to have a political motive. By buying large quantities at a high price, the Commonwealth of Independent States (CIS) might acquire considerable political influence in India, especially in the Kerala area where the processing industry is centered. If the CIS continues to
develop friendlier relations with Western countries and continues its internal political and economic problems in the 1990s, there is an increasing possibility that these sales might decline drastically.
Second, there has been a potential for an excess cashew nut supply, which can result from plantation techniques and improved technology in India and elsewhere. To find outlets for a possible nut glut, the All-India Coordinated Spices and Cashew Nut Improvement Project has centered on finding new markets for products from the cashew tree. The cashew apple, for example, is available in far greater tonnage than the cashew nut. It has been discarded in the past because processors could get either fruit or nut but not both, and the nuts have been considered more valuable. Experimentation is going on to harvest both the fruit and the nut. The fruit is also being studied for commercial use in candy, jams, chutney, juice, carbonated beverages, syrup, wine, and vinegar. A second area of research is in the use of cashew nut shell liquid, which was once discarded as a waste product and is now used extensively in industrial production of friction dusts for formulation in brake linings and clutch facings. Thus far, however, the extraction of cashew nut shell liquid has been too costly to make it fully competitive with some other types of oils.
The cashew tree is best known today for its nuts, which account for about 20 percent of the value of nuts produced worldwide—a value about equal to that of almonds or hazelnuts.
The fruit of the tree (known as the cashew apple), however, drew first attention. The Tupi Indians of Brazil first harvested the cashew apple in the wild. They later introduced it to early Portuguese traders, who in turn propagated the plant in other tropical countries. But attempts to grow the tree on plantations proved unsuccessful because the cashew was vulnerable to insects in the close quarters of plantations. Instead, some of the abandoned plantation trees propagated new trees in the wild where they thrived in the forests of India, East Africa, Indonesia, and Southeast Asia.
Several factors inhibited early use of the cashew nut. First, cashew fruit matures before the nut, so the fruit is spoiled by the time the nut can be harvested usefully. Second, the processing of cashew nuts is tedious and time consuming. In the 1920s, however, a processing industry developed in India, and the nuts became more valuable than the fruit because they became so popular among Indian consumers. India maintained a virtual monopoly on cashew processing until the mid-1970s. This monopoly
was due to a combination of three factors: First, India was the largest producer of wild cashews; second, early demand occurred in India, meaning that any other country would have to incur added transport charges in order to reach the Indian market; and third, and most importantly, the Indian workers were particularly adept at the process technology.
Cashew nut processing was performed in a very labor-intensive manner, requiring manual dexterity and low labor rates. The nut is contained beneath layers of shell and thin skin. To remove the shell, the nut must be placed in an open fire for a few minutes and then tapped (while still hot) with a wooden hammer. If the nut is broken in the tapping, its value decreases considerably. Once the shell is removed, the nut is placed in an oven for up to ten hours, after which the skin is removed by hand while the nut is still warm. Removal is done without fingernails or any sharp objects that can mark or break the surface. The nuts are then sorted and graded into 24 different categories by the size of the pieces. The highest-quality grade typically sells for about four times the price of the lowest grade, which is sold almost entirely to the confectionery industry.
Through the years several factors began to threaten India's prominence as a cashew producer. First, as demand for the nuts grew in the United States and the United Kingdom, a shortage developed. Since the nuts were grown in the wild and were unsuited to plantation growth,
India turned to East Africa, especially Mozambique, Tanzania, and Kenya, for supplies. Those countries were experiencing high unemployment and were at first eager to sell the raw nuts. Nevertheless, by the late 1980s India was still the largest nut producer (see Map 4.2).
By the 1950s India was no longer the world's major consumer, and the East African countries began to realize that they might be able to bypass India by processing the raw nuts themselves. Cashew-processing methods were well known, so there was no technological obstacle. There was another barrier, however, that blocked early competition from East Africa. The Indian labor force worked on homemade handicrafts as children, and as a result, by the time they were employed in cashew processing, they could perform delicate hand operations efficiently. Without this training, the East Africans were at a fatal disadvantage.
Although the Africans' inability to compete granted a reprieve to the Indian industry, it put them on notice that they were vulnerable to supply cutoffs. The Indian Council for Agricultural Research, the International Society for Horticultural Sciences, and the Indian Society for Plantation Crops expanded their efforts to increase India's production of raw nuts. Concomitantly, three different companies developed mechanical equipment to replace hand processing. The Sturtevant Tropical Products Institute developed a method now used by a London equipment manufacturer, Fletcher and Stewart, which cracks the shells with a steel plate. Oltre-mare Industria of Italy and Widmer and Ernst of Switzerland both developed shell-cutting
machines. Equipment was sold to East African countries and to Brazil in the 1970s. These countries decreased their raw-nut exports to India in order to maintain supplies for their own processing.
Two factors have kept India's hand-processing industry afloat. First, the machinery breaks many nuts, so Indian processors still face little competition in the sale of higher-grade cashew nuts. At any time, however, newer machinery might solve the breakage problem, again threatening the approximately 200 Indian processors and their 300,000 employees. Furthermore, there is increased competition for the lower-grade output. The second factor responsible for the enduring Indian industry is that their processors have been able to obtain more raw nuts as Indian raw-nut production has increased. Pesticide technology now makes cashew tree plantations feasible, thus increasing the number of trees per acre. Furthermore, Indian experimentation in hybridization, vegetative propagation, and grafting and budding techniques promises to increase the output per tree to five times what it was in the wild.
The Indian processors have been vulnerable to two more threats. One is political, the other technological. First, because India could no longer compete as well in its traditional North American and European markets for lower-grade nuts, a larger portion of those nuts was sold during the 1980s in the USSR, which became India's largest cashew nut customer in terms of tonnage. The USSR bought the nuts at a price above world market levels, and its buying habits were believed to have a political motive. By buying large quantities at a high price, the Commonwealth of Independent States (CIS) might acquire considerable political influence in India, especially in the Kerala area where the processing industry is centered. If the CIS continues to
develop friendlier relations with Western countries and continues its internal political and economic problems in the 1990s, there is an increasing possibility that these sales might decline drastically.
Second, there has been a potential for an excess cashew nut supply, which can result from plantation techniques and improved technology in India and elsewhere. To find outlets for a possible nut glut, the All-India Coordinated Spices and Cashew Nut Improvement Project has centered on finding new markets for products from the cashew tree. The cashew apple, for example, is available in far greater tonnage than the cashew nut. It has been discarded in the past because processors could get either fruit or nut but not both, and the nuts have been considered more valuable. Experimentation is going on to harvest both the fruit and the nut. The fruit is also being studied for commercial use in candy, jams, chutney, juice, carbonated beverages, syrup, wine, and vinegar. A second area of research is in the use of cashew nut shell liquid, which was once discarded as a waste product and is now used extensively in industrial production of friction dusts for formulation in brake linings and clutch facings. Thus far, however, the extraction of cashew nut shell liquid has been too costly to make it fully competitive with some other types of oils.
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