To begin with, best wishes to you and yours for a happy, healthy, successful 2020 !!

Every other year, the Cashew market throws a googly (or curve ball) – 2019 was not different.

Two events which surprised most people in the trade :

– End of 2018 / beginning of 2019, we saw Tanzania hold back its 2018 crop of over 250,000MT. There was brief spike in prices in Nov/Dec but market quickly drifted down by Jan/Feb and stayed at the lower end of the range for rest of the year. Virtually no impact of 7% of the World crop being out of the equation for a whole year

– Last quarter of 2019 saw Tanzania selling 2 crops (2018 + 2019) together. Despite this, RCN prices moved up from lows of FH 2019 (range of US$ 1100-1400) to current range of US$ 1500-1700. No significant increase in kernel prices – market was steady – a bit higher than the very low levels of mid 2019.

Before I talk about prospects for FH 2020, here is a recap of how cashew prices have moved in the last 3 years

FOB price range for W320 depending on origin + packer :

2017 – Very steady
For most of the year, prices moved in the US$ 4.50-5.00 range except for
a brief period in May June when trades were in US$ 5.00-5.25 range

2018 – Drifting down with some volatility
Jan to Apr : US$ 4.50-5.00
May to Aug : US$ 3.75 to 4.25
Sep Oct   : US$ 3.25 to 3.75
Nov Dec : US$ 3.75 to 4.25
Spike in Nov Dec was due to Tanzania decision not to sell 2018 crop RCN
at market prices

2019 – drifting down in FH and steady in SH
Jan to Mar : US$ 3.50 to 4.00
Apr to Jun : US$ 3.10 to 3.60
Jul to Sep : US$ 3.20 to 3.70
Oct to Dec : US$ 3.15 to 3.65

These prices are for FAQ from small medium large packers.   Top packers are able to sell 10-20 cents higher (more for forwards) to specific markets & buyers

The RCN price movement was something like this :

2017 – steady at high levels
Opened in the range of $ 2100-2200 drifted down to $ 1800-2000 and
ended at $ 2100-2300

2018 – volatile including a bloodbath
Opened at $ 2200-2400, crashed to $ 1100-1500 and recovered a bit $ 1500-1700

2019 – steady at low levels
Opened at $ 1500-1700, drifted down to $ 1200-1400, moved up again to $ 1550-1700

Looking forward to 2020, my take on the market is :

  • The oversupply built up in 2017/2018 which led to the downward trend from mid 2018 seems to have been used up. There does not seem to be any excess inventory in the chain.
  • Kernel off-take during 2019 has been good in all marketsExports from Vietnam in 2019 will be close to 460,000MT compared to 395,000MT in 2018.    Exports from India will be same as / slightly higher. Exports from Africa will be atleast 50,000MT higher.  Even if we reduce the quantity of unpeeled kernels exported from Africa to avoid double counting, we are looking at minimum increase during 2019 of 50,000MT (over 7% of kernel exports).  Despite this, no excess inventory in any market.If prices do not move up too much, it is reasonable to expect this trend to continue
  • During 2018 & 2019, the gap between lowest & highest price on the same day has been very big – most times it has been 40-50 cents per lb, never below 25-30 cents per lb. Although we can understand some difference based on quality + reliability + shipment period, such a large gap cannot be justified (or sustained)
  • The gap between Wholes and Brokens has also widened – Splits are around $ 1.50 below W320 and LP are almost $ 2.00 below W320. Even at these lower prices, demand is slow.  Hopefully, these lower prices will generate more interest & newer products will create more demand for the lower grades.  Otherwise, the wide gap and slow movement will take a toll on processors liquidity and parity calculations for Wholes.
  • The main 2020 crop (Northern Hemisphere which is 75% of world production) will start in Feb. Some reports indicate that it might start 2-4 weeks late in some areas but there is no significant adverse news (so far)
  • It is too early to forecast price range but the feeling is that 2020 RCN will open at high levels because processors do not have much inventory. And as usual, they will pay premium for early arrivals because kernel yields are higher.
  • On the kernel side, although some buyers have been buying 6-9 months forward, most of them have been buying for 3-4 months.  This has worked well because market has been steady for last 3 quarters after having drifted down in the previous 3 quarters.
  • If there is any big buying in Jan Feb for 2nd quarter 2020, processors will obviously ask for higher prices because of high RCN prices.  And if business is done at those higher levels, RCN prices will continue to be firm for the first 2-3 months of the crop.
  • Our feeling is that we will see some volatility in both RCN snd kernel prices in the first quarter (maybe April as well).  By May/Jun things should settle down

Now, I will go where angels fear to tread – predict the future :

– My guess it that we will see prices move up a bit in first quarter (on back of high RCN prices paid end of 2019) – down a bit in mid year (peak of the crop) and gradually move up in the second half (when demand picks up)

– Range for 2020 should be : RCN at US$ 1200 to 1600 and Kernels at US$ 3.25 to 3.75 (FAQ), with a reasonable possibility of touching $ 4.00

Caveat 1 : There should be no big surprises (or distortions) with the 2020 crop.

Caveat 2 : My prediction for 2019 at beginning of 2019 was wide off the mark !!!

And to end the report, here is some food for thought :

JAN -NOV 2017 JAN – NOV 2018 JAN-NOV 2019
Vietnam Import 12,48,659 1,941 12,03,430 1,836 15,34,825 1,263
(- 3.75%) (- 5.50%) (+ 27.50%) (-31.25%)
Vietnam Export 3,32,498 4.85 3,58,792 4.13 4,18,111 3.25
(+ 8.00%) (- 8.75%) (+ 16.50%) (- 21.50%)
JAN-OCT 2017 JAN-OCT 2018 JAN-OCT 2019
India Import 7,53,536 2,058 7,65,629 2,001 7,86,373 1,295
(+ 1.50%) (- 2.75%) (+ 2.75%) (- 35.25%)
India Export 72,828 4.85 52,553 4.65 53,943 3.75
(- 27.75%) (-4.25%) (+ 2.50%) (- 19.50%)

Would appreciate your comments / thoughts and your views on what to expect going forward

Thank you

Pankaj N. Sampat
Mumbai & San Francisco
+91 98200 79015 / +1 415 881 0633 /



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