DEC 8, 2012
RCN market has been fairly active in the last 2-3 weeks. Bulk of the trader inventory in India & Vietnam seems to have been sold. Some new shipments are being made from West Africa to India, Vietnam & Brazil. If this trend continues, most of the 2012 crop will move out before the 2013 harvest starts – which will be a good thing. Tanzania has been able to sell close to 30,000mt in the auctions so far.
Considering that RCN prices have moved up and movement of lower grades is slow (with wider differentials), parity for W320 will be higher. Availability of larger wholes is likely to be tight with a lower crop in Brazil and smaller nuts in Africa. Unless demand for lower grades picks up, shellers will face the pressure of carrying costs plus higher parity.
During Oct/Nov, a fair amount of business has been done for shipment upto Mar/Apr (some buyers bought upto June). Volumes have been much smaller than normal which means that steady buying should continue in coming weeks. Although activity in Dec is expected to be low, if it is very slow it could lead to bunched up buying in Jan/Feb 2013.
Although there is no good news on the economic front and uncertainties continue, there is no deterioration. Unless something dramatic happens, we can expect some revival of confidence by second quarter of 2013.
During the last few weeks, prices for all treenuts have been steady with a firm undertone after a smart rise in price of Almonds. If the prices remain close to the current range, it would be reasonable to expect better offtake in 2013 in all markets.
We continue to feel that downside is limited unless there is a big increase in world supply (which seems unlikely) or some major adverse economic development. If offtake picks up, we can expect a gradual increase in prices in coming months.
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