Cashew Market Report – Jan 19, 2013

Cashew market was steady with a firm undertone in Week 3.  There was reasonable buying interest from Europe and several other markets but USA continued to be quiet.  Activity was limited to a few grades.  Indian domestic market was reasonably active but there was no change in prices due to the flow of imported kernels.

There was not much change in prices but for white wholes, there were very few offers at the lower end of the range.  Range this week was W240 from 3.85 to 3.95, W320 from 3.35 to 3.40, W450 around 3.15, SW320 around 3.10, SW360 from 2.80 to 2.90, Splits from 2.10 to 2.20, Pieces from 1.40 to 1.50 FOB.

There was very little activity in the RCN market. Prices were steady – range of 1325 to 1350 for Tanzania, 900 to 1000 for Mozambique and 850 to 1050 for 2012 crop West African.

There have been some major changes in the last couple of years in the cashew sector :

1)    High volatility in 2011 disrupted sales plans apart from financial losses to all links in the chain.  Changes in buying pattern meant that despite adequate RCN availability, there were many periods in 2011 and 2012 when kernels supplies were tight leading to lost sales volume. Hopefully, recent history of 12 months of relative stability and prospects of trading in narrow range for coming months will result in some revival of confidence.

2)    Brazil had 3 consecutive bad crops. Is this a structural change to which the industry must adjust or will things improve ?  With smaller crop, Brazil has become an important player in the international RCN market.  An additional participant naturally puts upward pressure on prices in origin.

3)    Differentials for lower grades have increased from 50-60 cents a lb to over 1.25 dollar per lb.  This has significant impact  on shellers realisation per mt of RCN. On top of this,  the slow movement of some grades is increasing financing costs for the shellers. Unless prices and movement of these grades picks up (or prices of white wholes move up), shellers will have to be able to buy RCN at lower levels.

It will be interesting to see how these developments play out in the coming months.

On the supply side, except for the problems in Brazil, there is nothing adverse (so far) for the 2013 supply prospects.  By late Feb/early Mar, we will start getting some indications of crop size + quality + price levels for Northern Hemisphere crops but trend will be established only in April. Until then, most of the activity will be on “feelings or expectations”.

On the demand side, the general feeling is that retail offtake in the last few months was reasonable. Most people expect that offtake in coming months should improve considering that prices are significantly lower than the 2010/11 highs and have been relatively stable during 2012.

The trend of buying for shorter tranches will keep the market moving sideways in a narrow range.  Unless something big happens, there does not seem to be much likelihood of the range being broken on either side.  But in the next few weeks, we will probably see some spikes or dips depending on news (and rumours) about the upcoming crops.

Overall,  we expect prices to move around the current range for the next few months with a distinct possibility of some upward movement in the second half if offtake improves and there is no deterioriation in economic situation.

Would appreciate your comments and views on market trend, any special news or information… and your interest

Pankaj N. Sampat
Please see CONTACTS page for full contact details

2 thoughts on “Cashew Market Report – Jan 19, 2013

  1. Dear Pankaj :

    In your report , first paragraph you comment that prices in India for kernels are stable due to imports. Can you clarify that ? Are you suggesting/reporting Vietnan exports of pieces , since they have been accumulating and cutting prices while India is a major user for pieces in your festivals , etc… This means your prices of pieces cannot increase due to this factor. Please comment.


    Enviado via iPhone

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