The cashew market stayed quiet last week but some stray business with the US and Europe was done at the lower end. Volumes traded were small as most processors in India were not willing to sell at lower levels and Vietnam was closed.
The domestic market was quiet with slow offtake and lower buying ideas. Price range during the week was W240 from $3.85-4.05, W320 $3.35-3.50, W450 $3.05-3.15, SW320 at around $3.10, SW360 at around $2.90, splits $2-2.20 and pieces $1.45-1.55 f.o.b.
There was not much activity in raw cashew nut (RCN) market but the undertone was steady. Business was done for Tanzanian nuts at around $1,325 a tonne and for Mozambique $950. It seems that 2012 crop in both the origins will be smaller than the previous year’s.
There were reports of some trades for West Africa new crop RCN for March shipment in the range of $1,050-1,075 a tonne for Benin at around $1,000 for Ghana and at around $950 for Ivory Coast . Until movements start, all prices should be considered only as indications, Pankaj N. Sampat a Mumbai-based dealer told Business Line. With latest reports of Brazil crop being a third of normal, the pace of activity by Brazil will have an important effect on prices in West Africa.
Domestic RCN prices have opened at very high levels despite expectation of a good crop. In the next two weeks, “we should get an idea of price trend for Vietnam domestic RCN and also whether the reported financing problems are having any impact on intensity of buying by various categories of processors,” he said.
In March, all attention will be on West Africa, he said. If movements start early as expected and RCN prices soften, “we could see more processors reducing prices. But if there are any delays or supply disruptions, it would drive up prices.
Delays and disruptions could also mean some periods of lower shelling and kernel shipment.”
On the kernel side, the trend of short term buying continues and this means periodic bursts of activity with resultant dips and spikes in price within a narrow range. In a way, this is good as it reduces the chances of getting caught on the wrong foot.
But it increases the chances of temporary “stock out” situations. Slow movement and wide price differential for the scorched and brokens continues to be a “bug bear” for the shellers.
If consumption does not improve in the coming months, it will impact their operations in terms of costs and cash flow. With normal to good crops expected in all origins in the next 3-4 months, it is reasonable to expect steady market if everything remains on track.
Situation needs to be watched closely till Apr/May for any developments on weather and logistics, he added.