Cashew Market Report – Mar 16, 2013

Cashew market was steady in Week 11. There was scattered activity with several markets – mainly in W240 + W320.  Indian domestic market continued to be soft but there was reasonable buying from some markets at the lower prices.

There was no change in price range i.e.  W240 from 3.85 to 4.00, W320 from 3.30 to 3.45,  W450 from 3.05 to 3.15, SW320 from 3.00 to 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 were very few offers at the lower end of the range and limited buying interest at the higher end of the range.

RCN prices in Vietnam moved up further with untimely rains causing some concern. Vietnam shellers have started contracting for West Africa RCN and this might provide some support to RCN traders as arrivals pick up in coming weeks.  At the beginning of March, there were some signs of RCN prices softening but they have stabilised now.  As we said before, a clearer picture of the West Africa RCN price trend will be available only in April when flow picks up, provided there are no major logistical issues.

Most roasters have probably covered major portion of their needs upto Jun/Jul and some have covered a small portion of their needs for second half. Traders who have sold to the roasters have been able to buy product for prompt and nearby shipments at reasonable prices from processors who have not sold forwards. As a result of this, they are not under pressure to pay higher prices asked by some processors for forward contracts.  At the same time, the periodic buying provides a floor to the market.

In the next 6-8 weeks, roasters will have to buy major portion of their needs for second half.  We expect that traders will probably want to cover their existing short positions  (and maybe even go a little but long) before that so that they are comfortable in making new contracts with retailers.

By that time, if RCN movements are smooth and RCN prices have come down, some shellers will continue to sell at lower levels and some might be willing to sell some volume for forwards at middle or higher end of the current range.  On the other hand, if for some reason RCN prices are firm (or God forbid, higher than current levels), we can expect kernel prices to be steady to firm for prompt/nearbys and higher than current range for forwards.

To sum up, there is nothing on the horizon to change the broad view on the market trend – limited downside, usual volatility in Apr/May and a good possibility of higher prices for whole cashews in second half of the year unless RCN prices come down significantly (and offtake for lower grades picks up with lower price differentials).

Would appreciate your comments on market situation, views & forecast about the demand and market trend, any information or news…. and your interest.
Pankaj N. Sampat
Please see CONTACTS PAGE for full contact details

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