Samsons Traders

In Week 45, there was not much activity in the Cashew market. There was good buying interest from USA & Europe at the last traded levels. Offers inched up a bit on all grades. Limited business was done in some grades at the higher levels. There was not much change in prices in Indian domestic market – the next two weeks are likely to be quiet. China paid higher prices for some grades in Vietnam.

Range of offers (and some trades) during the week was W240 from 3.80 to 3.90, W320 from 3.30 to 3.40, W450 from 3.10 to 3.15, SW320 from 3.00 to 3.10, SW360 from 2.80 to 2.90, Splits from 2.15 to 2.25, Butts from 2.25 to 2.30, Pieces from 1.65 to 1.75 FOB.

RCN prices were steady – around 1250 to 1275 for Indonesia, from 750 to 850 for IVC and from 950 to 1000 for Guinea Bissau. No positive news from Tanzania. Procurement is reported to be very slow due to inadequate financing. If there is no progress in Tanzania during November, traders holding West African RCN will have window of opportunity to liquidate stocks by end of the year. This would be a good thing as the industry will not have to worry about old crop stocks when the 2013 crops start in Feb/Mar.

On the kernel buying side, although there is still some concern about demand trends, some buyers feel that present range is comfortable and are taking some cover for first few months of 2013. But the quantities traded are small as there are not many sellers willing to sell big volumes at current levels. We have heard that some buyers have paid few cents higher than reported levels to secure some volume from preferred shellers.

In general, nut prices have been reasonably steady for the last few months – and except for peanuts – all other snack nuts have settled in a slightly higher range than average of last 5 years. Given the good image of nuts as snacks, we would expect usage to increase with “less volatile” prices and some improvement in the economy.

It would be reasonable to expect cashew market to move sideways in the current range. This would probably be a good thing for all stakeholders as they can move away from the pattern of shot term business for smaller volumes. Any big price movement will cause another crisis of confidence and lack of interest in the product which would make the bottomline vulnerable for all links in the chain.

To sum up, (a) downside is limited unless something dramatic happens externally and (b) big upward move is possible only if there are major supply problems. Both scenarios seem unlikely at this stage. We continue to feel that there is some possibility of a price increase at the end of the year if buyers have to come in to cover additional volume for the first quarter of 2013.
Please inform your comments on market situation, views + forecast on demand & market trends, any news or information …. and your interest.
Regards,
Pankaj N. Sampat
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