KOLKATA, India - Cashew exports from India may fall by 40 percent this year as global consumers heavily slashed  purchases because of economic recession in the West, said an exporter of dry fruits Thursday.

This drop in shipments comes after a record export of over 40 billion rupees ($727 million) last year. The comfort of the Indian market is also not there as the proliferation of processing units has pushed down the prices.

The shipments have been dwindling in the recent months, causing a setback to the exporters. In place of 30 containers, the exports have fallen to two to three containers a month.

Lots of import containers, carrying raw cashew nuts, are stuck in Kochi and Tuticorin ports  in India's southern state of Kerala as exporters are deliberately delaying clearance due to a dull global market, said P Somarajan, proprietor, Kailas Cashews.

Raw kernels were purchased from Africa at high prices of $1,050 to $1,100 dollars per ton. A comparatively poor production in India necessitated higher imports. But the rates subsequently crashed to $750 per ton.

Indian exporters were unable to capitalize on the fall of rupee as the export prices also declined. From a level of $3.75 per pound, it has come down to $3.10  per pound. The problems began late during the year. Riding on higher unit value, the cashew kernel exports had reached 43.9 billion rupees ( $798 million) in 2011-12 as against Rs 28.19 billion ( $512 million) in the previous year.

The unit value surged but higher imports have taken some sheen of the exports. The import of raw cashew kernels zoomed to 809,000 ton in 2011-12 from 529,000 ton. The value went up to 53.77 billion rupees ($977 million) from 26.49 billion rupees ($481 million)

The proliferation of processing units has pushed down the cashew prices in the Indian domestic market. Earlier, the three south Indian states of Kerala, Tamil Nadu and Karnataka accounted for majority of cashew processing. It has now spread to other states. The average retail prices, after peaking close to 1,000 rupees ($18) per kg, it has slipped 400 rupees ($7.2) to 600 rupees ($10.9) and is further dipping.

As such, the dry fruits traders are finding to pay bonus to their workers for the Muslim festival of Eid scheduled on August 20 and the Malaylam festival of Onam on August 29.

But dry fruits traders are hoping that during the ongoing period of Ramadan and the harvest festival of Onam the demand will increase and sales will pick up which will supplement the decrease in exports.