The year has started with reasonable activity in Week 2 in most markets but there was very little activity with the largest importing market (USA). Even in India where the market is generally quiet at beginning of the year, there was some activity and this is expected to pick up in coming weeks.
There was not much change in prices but undertone is firm. There are very few offers at the lower end of the recent range for white wholes. Range this week was W240 from 3.80 to 3.90, W320 from 3.35 to 3.40, W450 around 3.15, SW320 around 3.10, SW360 from 2.75 to 2.90, Splits from 2.10 to 2.25, Pieces from 1.40 to 1.50 FOB.
RCN market is steady. Trader stocks in India & Vietnam are more or less exhausted. Fair amount (over 50,000mt) has been bought in Tanzania around $1350 and small quantities have been bought in Mozambique at prices ranging from $ 850 to 1000 depending on quality. It is too early to talk about Northern crops – all we can say is that there is nothing adverse as of now.
Having reviewed the 2012 trends and developments in last week’s report, we will attempt to look at prospects for 2013 in this week’s report.
As things stand, it is expected that the 2013 Northern crops should be normal. Supply should be comfortable unless there is some big adverse development – weather or logistic. If the kernel buying pattern does not change and there is regular buying every few weeks, shellers will be able to buy RCN comfortably during the season ensuring regular flow of product to the pipeline. This should keep RCN prices steady. If shellers are forced to keep away from the market due to lack of kernel demand (or lack of finance as reported in Vietnam), there could be a situation where RCN is available but kernels supplies are tight. Delays in procurement of RCN will lead to quality and yield issues as we have seen in the past. Lower prices will not compensate for that. If kernel demand is too strong in Mar/Apr, that will lead to scramble for RCN and push up prices.
As we noted in our last report, usage in all markets in 2012 has been higher than 2011. With steadier supplies and less fluctuation in prices, we should expect a growth in usage in 2013. If the economic situation improves (or does not deteriorate further), it will revive some confidence in the last mile of the chain leading to more planned buying (as compared to the sporadic short term buying we have seen for almost two years now).
A major challenge for the industry is to narrow the differentials for lower grades. This can be done either by (1) reducing the availability of lower grades with better post harvest handling and improving shelling operation or (2) by finding more uses for the lower grades. Otherwise the lower prices and difficulty to sell lower grades will continue to put upward pressure on W320 parity even if RCN prices do not move up.
Overall, the feeling is that market will continue to be steady to firm at the higher end of the range in the short term with possibility of slight dip in Apr/May UNLESS there is some major adverse development on the supply side. Later on in the year, we can expect prices to move up gradually if the offtake picks up as expected. Downside is limited because RCN prices are unlikely to go below a certain level and there is no chance of processing costs going down.
We would appreciate your comments and views, any special news or information …. and your interest.
Regards,
Pankaj N. Sampat
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Samsons Traders 
price and demand are both stable and firm in china market recently.as it is quite near chinese new year and too hard to get any clear idea about the market trend,all the buyers are just ordering small quantity.