The yield of a particular variety or batch of cashew nuts is commonly referred to as the 'Outturn' in industry parlance. This outturn value for a batch of cashews is a value that is obtained after the removal of the shells of all the raw cashews in that particular batch. The value is denoted in terms of pounds or lbs and is calculated per 80 kilograms. While an outturn value of anywhere between 40 and 45 is determined as average to descent, an outturn value of between 46 and 50 is considered outstanding.
The Widespread Misconception About The Outturn Value
Despite the fact that general awareness about raw cashew processing, quality metrics, peak seasons for specific cashew varieties, and the top cashew producing nations, is universal and accurate for the most part, there is still the widespread misconception amongst cashew retailers and processors especially, that the 46 lbs variety of cashew nuts is a far more 'retailable' variety of cashews than the 50 lbs variety. This is largely due to the marginal price difference between the two grades (the 46 lbs grade being cheaper than the 50 lbs grade). However, this marginal price difference is negligible in view of the larger picture - the many other areas in which the 50 lbs grade outclasses the 46 lbs grade.
The objective of this article is to enlighten those who are under this false impression, that the fact of the matter is that the 50 lbs grade of raw cashews is a far more retail-friendly and profit-making variety than any other variety, even the 46 lbs grade.
First Things First - The Values Being Assumed
As anyone involved in the cashew export/import, processing, or retailing trade might be aware, cashew prices change constantly according to - the variety of cashews, the yield or harvest of cashews in a country (which may be affected for several reasons such as drought, pestilence, crop disease, political/ economic turmoil), etc. For the purposes of clarity and simplification, certain assumptions about cashew prices have to made. Every one of these values is closest to the market cashew rates as of the time of writing this article (July 2024).
Market Price of Processed Cashews is INR 500 per Kilogram
Market Price of the 46 lbs grade of raw cashews is INR 9,000 per 100 Kilograms
Market Price of the 50 lbs grade of raw cashews is INR 9,500 per 100 Kilograms
The Retail Price of the 46 lbs grade of processed cashews is INR 13,000 per 100 Kilograms of raw cashews
The Retail Price of the 50 lbs grade of processed cashews is INR 14,150 per 100 Kilograms of raw cashews
The Output of the 46 lbs grade is 26 kg per 100 Kilograms of raw cashews
The Output of the 50 lbs grade is 28.3 kg per 100 Kilograms of raw cashews
The Nut Count of the 46 lbs grade is 190 nuts per Kilogram of raw cashews
The Nut Count of the 50 lbs grade is 180 nuts per Kilogram of raw cashews
Perk #1 - Higher Yield
The first advantage of opting for the 50 lbs grade over the 46 lbs grade is that the former offers a much higher yield than the latter. This can be explained by the simple equation below -
While 100 Kilograms of the 46 lbs grade of raw cashews yields 26 kg of processed cashews,
100 Kilograms of the 50 lbs grade yields 28.3 kg of processed cashews.
This implies that, by opting for the 50 lbs grade, one is guaranteed to get as much as 2.3 kg (two kilograms and three hundred grams) of processed cashew more than they would if they opted for the 46 lbs grade.
Perk #2 - Higher Profit Margin
Secondly, despite the price of the 50 lbs grade of raw cashews being more (only marginally) than that of the 46 lbs grade, cashew retailers are guaranteed to profit more from the former than they are from the latter.
To put it simply,
On procuring 100 Kilograms of the 46 lbs grade raw cashews for INR 9,000, one is likely to make INR 13,000 after processing this batch. This implies a profit of INR 4,000
However, on procuring 100 Kilograms of 50 lbs grade of raw cashews for INR 9,500, one is likely to make INR 14,150 after processing this batch, implying a profit of INR 4,650.
Therefore, although one is likely to spend INR 500 more in procuring 100 Kilograms of the 50 lbs grade than they would in procuring the same quantity of the 46 lbs grade, they are guaranteed to make a profit of INR 650 more on the former than the latter!
Perk #3 - Lesser Manpower & Resources Required For Processing (Most Important Of All)
Lastly, the most significant of all the advantages that the 50 lbs grade offers over the 46 lbs grade, is that it requires less manpower and resources to process an entire batch of raw cashews. This is due to the higher nut count of the 46 lbs grade.
the assumptions made earlier, it's easy to understand that -
there are 19,000 nuts for every 100 Kilograms of the 46 lbs grade of raw cashews, and
there are 18,000 nuts for every 100 Kilograms of the 50 lbs grade of raw cashews.
This, in turn, means that anyone procuring 100 kg of the 46 lbs grade of raw cashews will have a whopping 1000 more nuts to process than someone procuring the same quantity of the 50 lbs grade.
Many people take the nut count to be an advantage but fail to put the size or weight of these nuts into context.
As seen from Perk #1, the weight of processed nuts obtained after processing a 100 kg the 50 lbs grade of raw cashews is 2.3 kg more than the weight of processed nuts obtained upon processing a batch (of the same quantity) of the 46 lbs grade. One can, therefore, imagine that the size of the nuts in the 46 lbs grade is far smaller and less wholesome in nature than those from the 50 lbs grade.
Also, having 1000 more nuts to process for every 100 kg of a less profit-making grade of cashews requires more manpower and resources. This eventually cuts into the profit margin of this already less-profit-making (46 lbs grade) variety of cashews, even further!
Conclusion
From all the above-listed perks, it is obvious that cashew retailers are more likely to profit by procuring a batch of the 50 lbs grade (which has a higher yield, is more profit-making and requires less manpower to process) of raw cashews, than they would from the 46 grade of raw cashews!
Feel free to reach out to us at SCashews anytime! We'd be more than happy to enlighten you on how the 50 lbs grade is guaranteed to turn your cashew retail business into the profit-making machine you also envisioned it being!
