Time to fix issues cramping cashew-processing industry

Umpteen issues have been discouraging local cashew nut-processing investors from further expanding this booming agro-based industry, dampening government efforts to diversify its export basket.
Although a number of large companies, including BSRM, City Group, JMI and Kazi, have already invested in the cashew nut processing industry, higher customs assessment value of raw cashew nuts, cheap import from India under SAFTA benefits, under invoicing through Benapole and other customs ports maligning their efforts, industry insiders said.
Following the complexities, the local cashew nut processing industry has sought an urgent action from the National Board of Revenue (NBR) and the Bangladesh Trade and Tariff Commission (BTTC) to help the sector survive and grow.
They said local investment in cashew nut industries has been threatened due to concessionary tax benefits on import of finished cashew nut from India under SAFTA benefits.
Currently, importers are enjoying 3.0 per cent taxes on import of finished cashew nut under SAFTA benefit while it is 15 per cent for other importers.
Local industries have 78 per cent wastage and subject to payment of 11.0 per cent duty on import of raw cashew nuts.
Already, the Bangladesh Steel Re-rolling Mills Ltd (BSRM) set up a pilot project with 1.5 tonnes per day capacity project in Chattogram, diversifying from steel businesses.
In a recent letter, BSRM Group chairman Alihussain Akberali has sought urgent action from the NBR for imposition of regulatory duty (RD) of minimum 15 per cent on the import of cashew nut from India.
He wrote lots of industries coming up would not survive if such concessionary tax benefit remains.
He feared the local market would be flooded with Indian cashew nuts if the NBR keeps the decision pension without taking urgent action.
"The main reason for the thrust in this industry was high labour intensive and export potential like Vietnam is doing," he wrote.
The local industry has to employ at least 50 day labourers and eight supervisors, packaging stuffers and technicians to produce 1.5 tonnes of cashew nuts, he added.
The BSRM has established a cashew nut processing factory through its sister concern, Bangladesh Agricultural Products Ltd, in Chattogram.
Talking to the FE, Mr Akberali said the industry has potential to grow if the government supports and devises proper fiscal incentives.
"Bangladesh would be able to develop an import-substitute cashew nut industry as many investors are willing to invest in the fast growing industry," he added.
Md Ibnul Arifuzzaman, managing director of the Jackpot Cashew Nut Industries Limited in Nilphamari, said the customs has set minimum assessment value $2.0 per kilogram of raw cashew nut which is the highest in Bangladesh.
Also, finished cashew nut is entering the country at cheaper prices, below $1000 per tonnes than that of the prices local industries selling after processing raw cashew nuts.
"We've held meeting with the BTTC on these issues and also wrote to the NBR for taking prompt action," he said.
Mr Arifuzzaman also said local industries can sell cashew nut at Tk 1,100 per kg while it's below Tk 1000 for imported finished ones from India.
His industry has two tonnes of monthly production of cashew nuts involving 55 labours.
"My industry has an expansion plan and target to produce 10 to 14 tonnes of cashew nuts per months for export," he said.
There are some 22 local companies processing RCN (raw cashew nut) and exporting to different countries.
"The industry needs lower investment as there are no energy consumptions. Also local demand for cashew nut is lower in Bangladesh compared to that of the other countries," he said.
Abdus Salam, general secretary of the Cashew Grower, Processors and Exporters Association of Bangladesh, has earlier requested the NBR to implement unified assessment of customs on imported cashew nuts.
The Chattogram Customs House is assessing per kg cashew nut at $6.0 while Hili and Sona Masjid at $ 3.62 under SAFTA benefits.
Mazzak Agro Business Ltd Managing Director Md Zabed Iqbal Pathan has also wrote to the Chattogram Customs House to allow $1.10 as assessment value for importing RCN as it is $ 1.150 in Nigeria, $0.90 to $1.01 in China, $.875 to 1.10 in India, $1.0 to $1.25 in Ivory, $0.890 to $1.10 in Niger.
"RCN assessment value was $2.5 per kg while we have purchased it at $0.70 per kg. In that case, assessment value of finished cashew should be $11.25 per kg but its $6.0 per kg in CCH," said Mr Arifuzzaman.
It is difficult for RCN processors to survive if such the customs claimed such a high assessment value while its world market price is around $.80 to highest $1.25, he added.
A journey to process RCN started in 2016 in Bangladesh.

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