The shortfall in domestic production, however, cannot be bridged through imports as two main cashew growing countries, Vietnam and Brazil, are also witnessing acute crop damages. According to sources, the crop failure is evident in most countries.

Prices in the domestic market are bound to witness a steep hike due to these two major reasons, one domestic crop failure, two high import cost due to similar failures in two major producing countries from whom India imports cashew nut.

Following the crop failure in all major cashew producing countries, there is an estimated 20 to 25 per cent shortfall in the world supply scene which will lead to a flare up in prices of both raw nuts and cashew kernel, the source added.

According to cashew processors in Kochi, Vietnam and Brazil are also likely to enter the African market for raw nuts in thecoming days. African countries are the major sources of raw nut supply to India.

Top sources in the Cashew Export Promotion Council of India said cashew production in the country is estimated to have declined by 40 per cent in the current season compared to the previous year's corresponding figure of 4.3 lakh tonnes. This means that the total production of raw cashew in the current season will be around 2.6 lakh tonnes, down by 1.7 lakh tonnes.

Sources said this is the lowest ever production of the commodity during the last decade.

A major reason for the crop failure was the vagaries of weather and pest infection. The prolonged dry weather followed by intermittent rains during the flowering season played havoc with the production, sources said. The attack of tea mosquito was also instrumental in bringing down the production level to the record low, industry sources said.

The domestic cashew industry is unlikely to make up the 40 per cent shortfall in raw material through imports for several reasons,sources said. For one, Vietnam, which used to be one of the major source of raw cashew for the Indian industry, has stopped exporting raw nuts to India. This follows Vietnam's foray into global cashew market with value addition. Vietnam has set up a string of cashew processing factories and now processing raw nuts domestically, drying a major raw material source for India.

Besides, the cashew crop in Vietnam also took a beating with the production is estimated to be lower by around 35,000 tonnes from the projected 1.5 lakh tonnes. Similarly, the Brazilian crop has also estimated to be down by 20 per cent.