Samsons Traders

01 JAN 2016

To begin, our best wishes to you and yours for a healthy 2016 filled with tons of success and joy – at work & in personal life.

During Nov/Dec 2015, cashew market was very steady.  Reasonable volume was traded to all markets without much change in prices.

Current price range is W240 from US$ 3.75 to 3.90,  W320 from US$ 3.50 to 3.65,  W450 from US$ 3.40 to 3.50,  SW320 from US$ 3.35 to 3.45, SW360 from US$ 3.25 to 3.35,  Splits from US$ 3.2- to 3.35 and Pieces from US$ 3.00 to 3.15 FOB’

As we move into 2016, here is a chart of Cashew Kernel prices during 2014 and 2015 :

MONTH        W240             W320             W450         SPLITS         PIECES

JAN 2014       3.65-3.85       3.30-3.45       3.00-3.10       2.25-2.40       1.55-1.65

APR 2014       3.50-3.70       3.10-3.30       2.95-3.00       2.40-2.50       1.65-1.75

JUL 2014        3.60-3.75       3.20-3.40       3.10-3.20       2.50-2.65       2.00-2.25

OCT 2014       3.90-4.10       3.60-3.70       3.35-3.45       2.90-3.05       2.75-2.95

DEC 2014       3.65-3.85       3.35-3.50       3.15-3.30       2.85-3.00       2.80-2.90

JAN 2015       3.70-3.85       3.30-3.50       3.00-3.10       2.85-2.95       2.75-2.90

APR 2015       3.65-3.85       3.40-3.60       3.15-3.25       2.95-3.10       2.85-3.00

JUN 2015       3.75-3.95       3.50-3.75       3.45-3.55       3.30-3.45       3.10-3.20

JUL 2015        3.65-3.85       3.45-3.65       3.45-3.50       3.20-3.35       2.95-3.10

OCT 2015      3.60-3.70       3.45-3.60       3.35-3.50       3.10-3.25       2.90-3.00

DEC 2015      3.75-3.90       3.50-3.65       3.35-3.50       3.20-3.35       2.95-3.10

Some observations :

1) At any time, there is a difference of 15-20 cents per lb  between the highest & lowest offer, depending on delivery period & category of supplier (in terms of quality, food safety, reliability, consistency)

2) For the last 2 years, prices have been moving sideways in the range of 3.30-3.60 excecpt for 1 dip below the range in APR-JUN 2014 and 2 spikes above the range in OCT 2014 and MAY/JUN 2015

3) Differentials between grades has narrowed in last 2 years.  This narrowing is very, very significant in the case of Brokens.  Differential between W240 and W320 narrowed from 40-50 cents to 20-25 cents.  Differential between W320 and Splits married from 1 dollar to 30-35 cents.  Differential between Splits & Pieces narrowed from 60-70 cents to 15-20 cents

4) Cashew kernel prices have been moving in current range for last 3 years.  This stability in a period when there have been significant changes in prices of other nuts has to reasonable steady growth in usage in all markets.   This trend is likely to continue as there is not much chance of any big price movement unless something dramatic happens on supply side (positive or negative).  Recent reduction in prices of other nuts may have some impact of the change is sustained and no terraced.

5) Production in West Africa continues to grow.  There has been hardly any growth in other areas.  Million dollar question is : What will be the tipping point for processing in Africa to become an important factor in the kernel market ?

6) During 2015, price of RCN  (in shell) was low in Feb/Mar before beginning of the Northern Crop (which accounts for over 75% of World  production). Prices moved in Apr/May when trading volume was at peak and came down a bit in Jul/Aug.  Prices moved up again n Sep-Nov (when Southerrn crop was being traded) and eased bit in last 2 weeks,.   

7) On an average, RCN prices in 2015 were about 25% higher than 2014 but there was almost no change in kernel prices.  This is putting pressure on processor margins. Many large processors have not bought their usual volumes in the Southern Crop

In last few years, there has been a significant shift on both sides of the Chain – supply & demand.   India is no longer the largest supplier to World market – that position has been taken by West Africa for RCN and Vietnam for kernels.  On the demand side, USA & EU continue to be large buyers but they have been overtaken by Asia which is  now the largest consuming region  (India is the largest consuming country).  This has altered market dynamics – relative power of each region to determine market trend has changed.  Activity in many more origins and markets influence the price.

Looking at current situation, our feeling is that we will see some volatility in the first quarter.  Kernel prices could move up a bit before 2016 crops begin if there is good demand in Jan/early Feb.   If that happens, RCN prices will not come down below 2015 levels.   If kernel demand in Jan/Feb is not very strong and if 2016 crops are very good (too early to judge or guess now), it is possible that RCN prices could dip a little in Mar/May.

Would appreciate your comments + views on developments & trends on both sides of the chain for a better understanding of market prospects.

Regards,
Pankaj N. Sampat
SAMSONS TRADERS
Mumbai – India
Phone  + 91 22 64564300
Mobile + 91 98200 79015
email   pankaj@samsons.co.in
http://www.samsons.co.in