The cashew market witnessed good buying interest last week from the US and Europe at the last traded levels. Offers inched up a bit on all grades. Limited business was done in some grades at higher levels also.
There was not much change in prices in the domestic market and the next two weeks are likely to be quiet. China paid higher prices for some grades in Vietnam, according to the trade.
Range of offers made including some trades, during the week was for W240: $3.80-3.90, W320: $3.30-3.40, W450: $3.10-3.15, SW320: $3-3.10, SW360: $2.80-2.90, splits: $2.15-2.25, butts: $2.25-2.30, pieces: $1.65-1.75 for a lb (f.o.b).
Although there is still some concern about kernel demand trends, some buyers feel that present range is comfortable and are taking some cover for first few months of 2013. But the quantities traded are small, as there are not many sellers willing to sell big volumes at current levels.
“We have heard that some buyers have paid few cents higher than reported levels to secure some volume from preferred shellers”, Pankaj N. Sampat, a Mumbai-based dealer told Business Line.
In general, he said, nut prices have been reasonably steady for the last few months, except for peanuts, all other snack nuts have settled at a slightly higher range than average of last five years. “Given the good image of nuts as snacks, we would expect usage to increase with “less volatile” prices and some improvement in the economy”, he said.
It would be reasonable to expect cashew market to move sideways in the current range. This would probably be a good thing for all stakeholders as they can move away from the pattern of shot term business for smaller volumes. Any big price movement will cause another crisis of confidence and lack of interest in the product which would make the bottom line vulnerable for all links in the chain, he claimed.. Raw Cashew Nut (RCN) prices were steady at around $1,250 to $1,275 a tonne for Indonesia; at $750 to $850 for Ivory Coast (IVC) and at $950 to $1,000 for Guinea Bissau. No positive news has so far emanated from Tanzania. Procurement is reported to be very slow due to inadequate financing. If there is no progress in Tanzania during November, traders holding West African RCN will have window of opportunity to liquidate stocks by end of the year. This would be a good thing as the industry will not have to worry about old crop stocks when the 2013 crops start in Feb/Mar, market sources said.
According to Pankaj, downside is limited unless something dramatic happens externally while big upward move is possible only if there are major supply problems. Both scenarios, he said, seem unlikely at this stage. “We continue to feel that there is some possibility of a price increase at the end of the year if buyers have to come in to cover additional volume for the first quarter of 2013”, he added.