Project Report for Cashew Industry
India processes more cashew nuts than any other country in the world, importing raw cashew nuts (RCN) from Africa and processing them into kernels for home and export use. A cashew processing plant is a food manufacturing enterprise that takes raw nuts and produces graded kernels, with cashew shell liquid (CNSL) as a valuable byproduct. Sharda Associates generates CA-certified cashew processing project reports. Starting at Rs. 2,999.
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What Is a Cashew Processing Business?
A cashew processing facility is an agricultural manufacturing company that turns raw cashew nuts (RCN) into processed cashew kernels, which are edible and shelf-stable products offered in retail, food production, and export markets.
India is the world’s largest cashew nut processor, processing both domestically grown RCN (from Kerala, Goa, Maharashtra, Odisha, Andhra Pradesh, and Karnataka) and imported RCN (from West Africa, including Ivory Coast, Tanzania, Mozambique, and Guinea-Bissau). The processing sector is concentrated in coastal locations where RCN is available, although interior processing units that source imported RCN through major ports are also viable.
The business plan is to buy RCN at raw material cost, process it through the shelling-peeling-grading-packaging chain, and sell finished kernels at a much higher price — with cashew shell liquid (CNSL, produced during shelling) serving as an additional byproduct revenue stream.
At the MSME level, a cashew processing plant processes 100-500 MT of RCN per season, yielding roughly 20-25% of the input weight as kernels.
The Processing Chain — Raw Cashew to Finished Kernel
Step 1 — Raw material procurement: RCN is obtained from farmers (in growing states) or imported via Cochin, Mumbai, or Visakhapatnam ports. RCN quality (moisture content, nut count per kg, and outturn ratio) affects kernel yield and grade.
Step 2 — Steaming: RCN steamed at 100-105°C for 20-45 minutes to soften the shell and reduce the caustic CNSL content, making the shell simpler to cut without contaminating the kernel.
Step 3 — Shelling: The steamed nuts are shelled with mechanical shelling devices (drum shellers or centrifugal shellers) or by hand, separating the kernel and shell. Mechanical shelling is faster but results in more broken kernels, whereas hand cutting yields more entire kernels. CNSL is collected as it flows out during shelling.
Step 4 — Drying: Shelled kernels (with testa/skin still on) are dried in ovens at 60-80°C for 4-6 hours to reduce moisture content, facilitate peeling, and improve shelf stability.
Step 5: Peeling (skin removal): The dried testa (red-brown skin) is removed manually or with semi-automatic peeling equipment. This is the most labor-intensive step. Kernel quality (whiteness, breakage) is mostly determined here.
Step 6: Grading and sorting: Kernels are evaluated on size and quality. W180 (Jumbo) is a premium export grade with around 180 kernels per pound and the highest price. W210, W240, and W320 are standard grades, with W320 being the most commonly traded globally. W450 (smaller kernels): Economical grade. Broken/split grades (B, S, LP, SP): Low-cost domestic market.
Step 7 — Fumigation and packing: Graded kernels are vacuum-packed in aluminum or tin containers (flushed with CO2 or nitrogen to remove oxygen) for shelf stability. FSSAI label was applied.
CNSL — The By-Product That Changes the Economics
Cashew Nut Shell Liquid (CNSL) is extracted during the shelling process—a dark brown industrial liquid that is a really useful industrial raw material.
CNSL is used in a variety of products, including paints and varnishes, industrial resins, waterproofing compounds, insecticides, and friction materials (such as brake linings and clutch facings).
The value of CNSL ranges from Rs.30 to Rs.70 per kg, depending on grade and demand. A facility processing 300 MT of RCN produces about 15-18 MT of CNSL, which is worth Rs.4.50-12.60 lakh at current pricing.
This by-product revenue is frequently overlooked in project reports, despite the fact that it significantly enhances the business case and DSCR calculation.
Cashew Kernel Grades and Pricing
Grade | Description | Approx. price (Rs./kg) |
W180 (Jumbo) | ~180 kernels/lb, whole, white | Rs.900-1,200 |
W240 | ~240 kernels/lb, whole | Rs.800-1,000 |
W320 (Most traded) | ~320 kernels/lb, whole | Rs.700-900 |
W450 | ~450 kernels/lb, smaller whole | Rs.600-750 |
Broken (B, S grades) | Broken pieces | Rs.350-550 |
Pricing fluctuates with global RCN supply, USD exchange rate (cashew is priced globally in USD), and domestic demand. A unit producing primarily W320 whole kernels targets both export and domestic institutional buyers.
Market and Sales Channels
Domestic retail and branded packaging: Cashew kernels are packaged and sold to grocery stores, kirana shops, and online (Amazon, BigBasket, Flipkart) under the processor’s own brand or private label. The highest margin channel.
Bulk supply to food manufacturers: Confectionery companies, bakeries, hotel chains, and airline catering buy big quantities at wholesale pricing. Volume companies have lower margins than retail, but continuous large orders.
Export via APEDA: India exports processed cashew kernels to the United States, Europe, the Middle East, and Southeast Asia. Export-oriented processors must be registered with APEDA (Agricultural and Processed Food Products Export Development Authority), have EIC (Export Inspection Council) quality certification, and comply with phytosanitary standards. Premium grades (W180, W240) are generally export-oriented.
Institutional and government procurement: Canteen Stores Department (CSD) and government supply chains use tender-based pricing.
PMFME Scheme — For MSME Cashew Processors
PM Formalisation of Micro Food Enterprises (PMFME) provides:
- Credit-linked capital subsidy of 35% (up to Rs.10 lakh) for individual micro food enterprises
- Support for branding, packaging, and certification
- Seed capital for SHG members in food processing
A MSME cashew processing plant that transitions from informal to formal (FSSAI-registered, bankable) is eligible for PMFME. When combined with an MSME term loan or Mudra for bigger units, the PMFME subsidy reduces effective capital costs.
Project Cost for Cashew Processing Unit
Scale (RCN/season) | Capital Cost (Rs.) |
Small (100-200 MT RCN) | Rs.15-35 lakh |
Medium (200-500 MT RCN) | Rs.35-80 lakh |
Large (500+ MT RCN) | Rs.80 lakh-2 crore |
Key equipment includes a cashew steaming drum, shelling machines (mechanical and hand cutting stations), drying ovens, peeling stations, grading conveyor, vacuum packing machine, CO2/nitrogen gas system, CNSL collection tank, and an FSSAI-compliant packing room.
Small units accommodate PMFME + MSME term loans. Medium and bigger businesses are suitable for MSME term loans from NABARD or bank project finance.
Why Choose Sharda Associates
- 45,500+ Project Reports: Agri-Processing and Food Manufacturing Experience. Cashew processing is a food manufacturing MSME with a distinct raw material cost structure (RCN as the principal input), grading-dependent output revenue, and a CNSL byproduct, all of which we appropriately model.
- CNSL By-Product Revenue is correctly included. Many project reports omit CNSL; we incorporate it as a separate revenue stream, which improves the DSCR and overall business case.
- Kernel Grade Mix is correctly modelled. The grade mix (W180 premium vs W320 standard vs broken) impacts the average selling price and overall revenue; we simulate a realistic grade distribution for your processing scale and equipment.
- RCN Input Cost as Primary Variable: RCN prices fluctuate seasonally and with global supply; we accurately model raw material costs at realistic market prices with suitable sensitivity.
- PMFME + MSME Loan Dual Documentation: For smaller enterprises, the PMFME subsidy (35%, up to Rs.10 lakh) is combined with an MSME term loan, both of which are documented simultaneously.
- APEDA Export Channel Mentioned Where Relevant For export-oriented processors, APEDA registration, EIC certification, and export-grade documentation are mentioned in the compliance and market sections.
- Starting at ₹2,999 · 24–48 working hours ·
+91 89899 77769 | All India service
Frequently Asked Questions
A company that processes raw cashew nuts (RCN) into graded cashew kernels by steaming, shelling, drying, peeling, grading, and vacuum packing. Revenue from kernel sales (W180 premium to W450 economy grades, Rs. 600-1,200/kg) and CNSL byproduct (Rs. 30-70/kg). The processing ratio is typically 20-25% kernel yield from RCN weight.
Kernels are graded by size: W180 (Jumbo, ~180 kernels/lb, Rs.900-1,200/kg), W240 (Rs.800-1,000/kg), W320 (most traded globally, Rs.700-900/kg), W450 (Rs.600-750/kg), and broken grades (Rs.350-550/kg). The W320 entire kernel is the leading global trade grade. Premium W180 and W240 are mostly export-oriented.
Cashew Nut Shell Liquid is an industrial liquid extracted during the shelling process that is utilized in automotive friction materials (brake linings), paints, resins, and waterproofing compounds. Valued at Rs.30-70 per kg. A unit processing 300 MT RCN generates 15-18 MT CNSL worth Rs.4.50-12.60 lakh, which is a considerable by-product revenue that enhances DSCR when accurately reported in the project report.
PMFME (PM Formalisation of Micro Food Enterprises) provides a 35% credit-linked capital subsidy of up to Rs.10 lakh to micro food enterprises. MSME term loans for medium and big businesses. APEDA support for export-oriented processors. NABARD refinances agricultural processing units in rural areas. FSSAI registration is required for all official scheme access.
RCN availability is seasonal (India's cashew crop runs from February to May) and price varies. Units in non-growing states rely on imported RCN from West Africa, which is subject to import duties, exchange rates, and international supply chain logistics. The key variable cost is RCN purchasing, and the RCN price per kilogram has a direct impact on processing profitability. Project financial models must incorporate accurate RCN prices, as well as suitable seasonal and FX buffers.
Yes. India is the world's biggest cashew kernel exporter. Processed cashew kernels are shipped to the United States, Europe, the Middle East, and Southeast Asia. Export needs APEDA registration, EIC (Export Inspection Council) quality certification, an NPPO phytosanitary certificate, and adherence to the importing country's food safety regulations. Premium grades (W180, W240, and W320 full) are predominantly export quality.
Starting at Rs.2,999, with 24-48 hour delivery. RCN input cost, kernel grade mix, CNSL by-product revenue, PMFME/MSME dual documentation, APEDA export compliance, and FSSAI regulations. If the bank or PMFME authority has any concerns, they can request a free revision. Call +91 89899 77769.
A cashew processing unit is most effective near cashew-growing regions, agricultural produce marketplaces, ports, or significant raw cashew nut (RCN) trading centers. Easy access to raw materials lowers transportation expenses while increasing procurement efficiency. Locations with trained labor, dependable power supply, water access, and proximity to export ports or wholesale markets provide a significant competitive advantage and promote long-term profitability.