Cashew Market Report – Mar 31, 2014

Cashew prices – kernels and RCN – came down during Feb.  There was
reasonable activity in kernels and good activity in RCN during March. At the end of the month, market was steady   and there was not much selling interest at lower level of the range seen in the first quarter.  Indian domestic market has also been steady in a narrow range with periodic bursts of activity.

During week 13, range of offers for second quarter was W240 from 3.60 to 3.75,  W320 from 3.15 to 3.30,  W450 and SW320 from 2.95 to 3.05,  SW360 from 2.75 to 2.90,  SSW from 2.45 to 2.55, Splits from 2.40 to 2.55, Pieces from 1.65 to 1.75 FOB. Offers for second half were few cents higher.

After decline during February, RCN prices have moved up slightly in the last two weeks.  Current prices are around 850 to 875 C&F for Nigeria, 950 to 975 C&F for IVC, 1075 to 1100 C&F for Ghana and around 1150 C&F for Benin. These prices are 10 to 15% higher than same time last year (whereas kernel prices are 3 to 5% lower).  Such disparity cannot be sustained – something has to change.

Shipments of West Africa RCN have started. During April, we will see whether flow from IVC will be smooth despite the movement restrictions.  Also, the impact of the minimum procurement price in IVC.  Initial reports indicate that efforts to enforce quality standards are bearing fruit – if these translate into better realisation for the growers / collectors and are implemented on a continuous basis in all African countries, that would help to reduce inefficiencies in the supply chain.

As we move into the second quarter of the year – peak of the RCN collection season – some points to be kept in mind :

1)    Processing which had gone down in the first quarter due to the huge disparity in prices should pick up pace in second quarter but the pick up is likely to be slow as there is still some disparity despite the reduction in RCN prices.

2)    If the RCN prices do not come down during April, shellers will find it difficult to continue buying unless kernel activity picks up and prices move up to the higher end of the 2 year range.

3)    The kernel market has been moving around 3.25 – plus or minus 5% – for almost two years.  During this period prices of all other treenuts have moved up and are higher than 2-3 year average.

4)    The stability in prices has meant continuance of the trend for regular buying of smaller volumes for shorter spreads. Buyers do not see the need to take cover for longer periods.  Complacency has set in and this could prove dangerous.

In our opinion, downside from current levels is limited – at the same time, there is no reason to expect a big jump in prices. BUT, a reasonable and gradual price increase in second half of the year is definitely possible unless the RCN prices come down significantly in Apr/May. Decline in RCN prices after May will not have any major impact because that will be accompanied by decline in kernel yields.

To repeat what we said in our last report :

If the RCN prices come down a bit, kernel prices will remain in the current range.  If RCN prices come down significantly, kernel prices could come down a bit from the current range.

If there is any strong kernel demand from USA and / or EU during the next 4 to 6 weeks, kernel prices will move up a bit from current levels and the RCN prices will not come down.

Would appreciate your views on market situation & trend,    any news or information….. and interest.

Pankaj N. Sampat
Mumbai – India
Phone +91 22 64564300
Fax     +91 22 26462346
Email /

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