Cashew Market Report – Sep 16, 2015

After a very steady May/June, cashew prices came down a bit in July / early August. Some processors at low levels whereas others were able to sell at higher levels. Reasonable volumes were traded at all levels.

In Weeks 37 and 38, range of prices has been W240 from 3.60 to 3.80 / W320 from 3.45 to 3.65 / W450 from 3.40 to 3.55 / WS from 3.15 to 3.30 / LP from 2.95 to 3.10 FOB. Forwards are trading at a premium of 5-10 cents per lb depending on processor & shipment period. Differential between lowest & highest price on a given day has increased from 5-10 cents to 15-20 cents !!

In the last couple of weeks, there are more enquiries but volume traded has been small as there are very few sellers at lower levels. If this trend continues, it is quite possible that price may move up gradually in coming weeks.

RCN prices came down end July / early Aug due to bunching of arrivals but not much was traded as most processors had adequate arrivals of their own. In last 2-3 weeks, prices have inched up a bit as medium & small processors started buying in small lots. Current RCN prices are in the range of 1350-1450 for IVC / Benin and 1550-1650 for GB / Senegal / Gambia depending on the quality. Except for IVC which reportedly shipped a record quantity, shipments from other West African origins were slightly lower than last year. Outlook for upcoming Southern crop is hazy – some people say Brazil may have a good crop and Tanzania movements may be delayed due to elections. Small lots of Indonesia are trading at insanely high prices.

On an average, RCN prices in 2015 have been 20 to 25% higher than 2014 whereas kernel prices have been almost the same (maybe 5% higher). Between now and Mar 2016, RCN availability will be from Indonesia, East Africa, Brazil which account for only 25% of World production. Traditionally, Southern crop prices are higher than Northern crop. Only reason for decline in Southern crop this year would be if kernel activity in Sep-Nov is very very slow.

Although kernel buying interest was reasonable but not very strong in the last 3 months, prices were steady in a narrow range and forwards were trading few cents higher at all times. This seems to indicate that below a certain level, selling interest is limited. High RCN costs and regular buying interest from some market or the other are providing a floor to the market.

During first half of 2015, there has been reasonable growth in usage in all markets and this trend should continue unless something dramatic happens.

Current uncertainty in economic situation makes it difficult to judge demand and market trend in coming months.

Overall, we don’t expect much change in market in coming weeks but there is certainly a possibility that prices could move up a bit if there is a good demand for year-end top-up requirements and first half 2016 shipments. We would not be surprised if prices cross the higher end of the range seen in the last 6 months. There are very little chances of decline from current levels in the foreseeable future.

We would appreciate your comments on the market situation and your views + forecast of demand and price trend in coming months.

Pankaj N. Sampat
Mumbai – India

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