Cashew Market Report – Oct 14, 2013

During second half Sep and early Oct, some processors sold W240 in 3.60-3.65 range and W320 around 3.10 FOB for nearby shipments. There was reasonable buying interest at these levels but the volume traded / available was limited to a few processors as many have sold earlier at higher levels. In the last 2-3 weeks, some business was done for FH 2014 shipments at 15-20 cents higher.

In week 41, range of cashew prices was W240 from 3.60 to 3.80, W320 from 3.10 to 3.30,  W450 from 2.95 to 3.10, SW320 from 3.00 to 3.10, Splits from 2.25 to 2.30 and Pieces from 1.45 to 1.55 FOB.

Indian domestic market moved up during Sept but has been steady for the last 2-3 weeks.  There is good demand for quality product – wholes as well as brokens.  We can expect a slowing down of activity during end of Oct / early Nov but there should be revival of buying by traders after mid Nov for the marriage season, depending on retail offtake in the festival season which will end by early Nov.

Due to the high prices and slow shipments from Indonesia & no movement from Tanzania, prices for West African RCN moved up 10 to 15% (especially for the better quality, dried nuts).  There are reports of trades for Bissau around US$ 1100 and for IVC/Ghana from US$ 750 to 850 depending on quality.  Demand is limited to small lots by small processors who operate on hand to mouth basis.  Large processors – especially in India – seem to have adequate RCN stocks.  Unless Tanzania opens at reasonable levels, movement will be slow at the beginning of the season.

In the last two months, the kernel market broke the lower end of the 3.25-3.40 range of  the last 9-12 months (and the broader 3.20-3.50 range of the last 15-18 months).  But the volume traded at the lower levels has been small and has been limited to a few processors who sell for spot / nearbys.  Processors who are able to make forward sales have been selling 15-20 cents higher depending on the grade and shipment period.

In the next six months, very little fresh RCN is available for the processors in India & Vietnam.  Unless the Tanzania RCN prices are substantially lower than last year, processors will not be able to reduce kernel prices.  Latest reports indicate that Tanzania auctions should start soon. What processors and RCN traders do in the initial auctions will give some idea of market direction.

In the last 15-18 months, steady trading and regular shipments – RCN and kernels – have kept the market moving within a narrow range.  There have been no major disruptions in supply (but there have been some quality issues).  Overall, everybody seems to be comfortable with the range that has been established.

Even if kernel  demand continues to be sporadic, there is no reason to expect a decline from current levels if the RCN prices do not come down.  At the same time, there does not seem to be anything on horizon which would warrant prices breaking the higher end of the range unless there is a big spurt in buying  in the next two months for shipments during FH of 2014.

To sum up, unless something dramatic happens – and it could be external rather than fundamental demand / supply factors – we can expect “more of the same”  in the coming weeks and months until the 2014 crops start.

Pankaj N. Sampat
Mumbai – India
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