Samsons Traders

Cashew market was quiet during Week 47 but undertone was firm – export as well as domestic.   Business was done with USA, Europe and some other markets at the higher levels but limited volumes were reported.  China paid good prices to some processors in Vietnam for good quality product.  Prices picked up in Indian domestic market for brokens as well as wholes. Brokens are currently trading at 30 to 35% premium over international market.

In the international market, there was not much change in price range i.e. W240 from 3.85 to 3.95, W320 from 3.35 to 3.45, W450 from 3.10 to 3.15, SW320 from 2.90 to 3.05, SW360 from 2.75 to 2.85,  Splits from 2.15 to 2.25, Butts from 2.25 to 2.30, Pieces from 1.65 to 1.75 FOB.  Some business was reported at the higher end of the range in some grades.

In the last two weeks, there has been reasonable activity in the RCN market. Traders are able to get good prices for their stocks in India & Vietnam and there have been some sales for shipment from West Africa as well.  Prices have moved up by over 15% from the lows seen in Sep/Oct.  This activity is good as it will mean better kernel availability in few weeks and if this buying is sustained, it will move most of the 2012 product before 2013 season starts.  Very small quantity (less than 10% of the offered volume) was taken up in the first Tanzania auction due to high reserve price.  It will be interesting to see what happens in the next 2-3 weeks.  There are some very pessimistic reports from Brazil – some of which seem to be quite unbelievable.

Although there has been a fair amount of activity in the last 4-6 weeks, overall volume traded has not been much.  This has kept the market steady in a narrow range – if demand had been strong, prices would have climbed to the 3.50-3.75 range by now.  If more RCN is traded in coming weeks at workable levels, we will probably see continued selling interest BUT if the RCN activity is slow, shellers will be reluctant to take any large positions at current levels.

USA & Europe buyers have covered part of their needs for the first few months of 2013.  There is some resistance to buying more at higher levels as buyers feel supply position is comfortable and there is no hurry to buy. We expect steady buying interest to continue which would help smooth movement of  2012 crop in the next 2-3 months without the prices running too far from the current range.

The nut sector seems to be settling down in range slightly higher than average of the last 5 years.  For the last few months, all treenut prices have been steady with a firm undertone.  There has been a sharp increase in the price of the barometer – almonds – in the last two months.  Unless there is some big adverse economic development, we can expect this steadiness at higher levels to be sustained.

In the last couple of years, cashew usage has been severely affected due to high prices and high volatility.  We have now seen almost a year of cashews moving in a narrow range,  except for a brief period in Apr/May.  It would be reasonable to expect return of some growth in usage in 2013 in USA & Europe (we are already seeing some signs in Asia).

To sum up, we expect the market to be steady around the high end of the current range  with possibility of some increase in prices before end of the year if buying picks up.

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Regards,
Pankaj N. Sampat
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