OCT 13, 2012
There was no change in Cashew prices during Week 41 although there was a slight pick up in enquiries – not so much in actual business done. There was reasonable buying interest at the lower end of the range (for nearbys as well as forwards) but selling interest at the lower levels is limited. Price range (offers and trades) is more or less unchanged i.e. W240 from 3.60 to 3.75, W320 from 3.15 to 3.35, W450 & SW320 from 3.00 to 3.10, SW360 from 2.70 to 2.90, Splits from 2.00 to 2.25, Butts from 2.10 to 2.30 and Pieces from 1.60 to 1.75 FOB.
There is absolutely nothing to report on RCN market except for some trades for good quality Indonesia in the range of 1325 to 1350 C&F. There seems to be reasonable quantity in West Africa but there is little buying interest because of dull kernel market and quality concerns. No news yet from Tanzania or Mozambique about pricing or movement.
Since there is nothing new to report, it might be a good idea to look at price movements in the last four years :
During 2009 and first quarter of 2010, W320 traded in the rage of 2.25 to 2.75 – substantially lower than current range (processing costs have gone up significantly in the last 3 years). In 2010, prices started moving up in the second quarter and picked up speed in the second half. W320 moved from 3.00 in Jul 2010 to 3.40 in Oct 2010, jumped to 3.80 in Nov 2010, rose to 4.00 by May 2011, again jumped to 4.70 in Jul 2011, slumped to 4.50 in Sep 2011 and crashed to 3.75 in Dec 2011. It was an upward trend from Jul 2010 to Jul 2011 and then downward from Jul to Dec 2011. Price movement in first half of 2012 has was very erratic – from 3.70 in Jan to 3.20 in Mar to 3.80 in early May and 3.50 by early June. Since then, market has been moving sideways in a narrow range of 3.25 to 3.50.
Current range is the lowest in the last two years and is significantly lower than the average of last two years. If you take into account the increase in processing costs, current prices are probably lower than the average of last 5 years – or at least close to that.
Due to the fragile economic situation, all links in the chain are content to operate with short term positions. In one way this is good as the market continues to move in a narrow range… but on the other hand there is the risk of sharp movements if something unusual happens. As far as cashews are concerned, supply side factors are well known and no big surprises are expected. Demand side continues to be hazy and short term developments on this side will continue to influence market movement until there is some confidence for long term planning.
Prices for other nuts – except peanuts – are steady and there are signs of small increases in some of the other treenuts. It seems that the market is adjusting to the new “normal” price range for treenuts which is higher than the 5-10 year average to reflect higher costs of raw material, processing, logistics (and the general increase in prices of all agricultural commodities).
Overall, everything points to a steady market moving sideways in a narrow range. Unless there is a big fall in RCN prices, there is very little chance of any further big decline in kernel prices. On the other hand, there is possibility of some price increase if kernel activity picks up in the next few weeks because shellers will be reluctant to take big positions at current levels.
Would like your comments on current situation, views + forecast on demand & market trend, any special information or news…. and your interest
Pankaj N. Sampat
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