Kernel of calm for Goa's cashew business as Trump hits 90-day pause on higher tariffs

PANAJI: US President Donald Trump's decision to hit pause on his trade war - except with China - has alleviated anxieties in the far corners of North Goa. While Trump's tariff tantrums did not result in any additional duties on Indian cashew nuts, his move to impose higher tariffs on Vietnam, which holds more than 80% market share of cashews in the US, would have seen nuts from Vietnam and African nations flooding India.

Owners of cashew nut processing plants said that such an eventuality would have sent prices tumbling in Goa. Vietnam, which has the lion's share as a supplier of cashews - raw and processed - in the US market, was hit with a steep 46% tariff by Trump before the 90-day pause was announced.

Vietnam imports raw cashews from West African nations and then exports them to the US. If the demand from the US and Vietnam had dropped, cashew nuts from West Africa would have swamped India, crashing cashew prices. "If Vietnam is affected, it will default on the African crop and the price will drop. This is our worry," Goa Cashew Manufacturers Association president Rohit Zantye said. Vietnam imports raw cashew nuts from Cote d'Ivoire, Tanzania, Benin, Tonga, and Ghana. Goan companies also tap those markets. Many Goan cashew nut processing factories and packers have already placed import orders for the current year.

As of now, the landed cost for African cashew nuts is Rs 155 per kg while for Goa cashew nuts, which are of a higher quality, it is Rs 175 per kg. "We have already purchased 40% of our raw material. If the raw cashew prices collapse after we have purchased at a higher price, it would have been a challenge," Zantye said. "Those who have bought local produce will be in the soup since the African cashew nuts will flood the Indian market," he added.

The reciprocal tariffs imposed by Trump roiled the international markets last week and an impact analysis by the Federation of Indian Chambers of Commerce & Industry (Ficci) had said tariffs could be an opportunity for the cashew nut processing units. "Vietnam is the dominant supplier of cashews (raw as well as processed) in the US market with more than 80% share," the Ficci report said. "Since the reciprocal tariff imposed on Vietnam is considerably high at 46%, this gives an opportunity to other exporting countries like India to expand their market share in the US."

India currently has a 0.9% share in the export of fresh or dried cashew nuts to the US, the same as Nigeria, while Vietnam has an 88% share. Trump's reciprocal tariff on India is just 26%. In terms of preserved cashew nuts, India has a 6% share in exports to the US. However, the 15-odd cashew nut processing units in North Goa were worried last week. The state's cashew crop spanning 55,302 hectares yields estimated 27,070 tonnes annually.