Cashew industry in a crunch amid rising demand, bureaucratic hurdles
Sri Lanka’s strategic plan of developing its cashew industry into a cash crop—both for local consumption and for export—have been hit with a serious hitch, with players blaming bureaucratic delays and policy ambiguity for disrupting supply.
With rising tourist visits, there is greater demand for cashew, which is well-loved by locals and tourists. In a bid to meet this demand and offset erratic local cashew harvests, the previous government introduced a system of regulated importation of cashew, which may be imported between December and April—the off-season for local cashew.
This import window was closely watched by a multi-ministerial committee to ensure that imports were not inhibiting local harvests. Industry insiders now assert that this deal has broken down.
A senior official from the Plantation Industries Ministry confirmed that local output is currently just 12,500 tonnes—far below what is needed to meet the country’s requirement. And to compound the problem, this year’s production fell below expectations, leaving imports to make up the shortfall even further.
It has been made more complex by the introduction of the National Imports Tariff Guide 2025 (NITG-2025), which introduced fresh amendments to harmonised system (HS) codes and tax frameworks. The amendments, introduced by Sri Lanka Customs, have made the import process complex and sluggish, stakeholders say.
Traders claim that scrapping the previous committee-based approval system and making it more cumbersome under NITG-2025 caused delays in shipments, cancellation of orders, and general uncertainty. Each permit is valid only for three months—delays inevitably render them useless, forcing traders to apply anew or risk forgoing shipments altogether.
Exporters also cited other bottlenecks such as the need for foreign laboratory certification and protracted document verification activities by customs, putting extra strain on an already crippled system.
At the same time, Sri Lanka Cashew Corporation is tasked with tightrope walking—equating domestic production to import needs. The task has the tendency to slow the process since officials determine domestic supply and import quotas.
Unforeseen weather swings can hit crop yields,” the official of the Plantation Ministry explained, “and without early imports, shortages and price hikes are unavoidable”.
Beyond licencing problems, the cashew industry also suffers from old facilities and excessive red tape at import and export checkpoints—ailments that have plagued Sri Lanka’s entire trade sector for many years.
Unless swift measures are taken to streamline import approvals and iron out logistical bottlenecks, the country’s fledgling cashew sector could find itself in a crunchy issue.
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