Buying support pushes up cashew prices in overseas markets

Good buying support pushed up the cashew prices last week and business was conducted for W240 from $4.35 to $4.50; W320 from $3.90 to $4.05; Splits from $3.40 to $3.50 and Pieces from $3.20 to $3.30/lb (fob) during the week.

In the last 2-3 weeks there has been a fair amount of activity for second quarter shipments in all major markets. The Indian market has been quiet for some time but activity is expected to pick up in a couple of weeks.

The Raw Cashew Nut (RCN) market remained steady. India and Vietnam local crops were trading above $2,000 a tonne. For African RCN, a wide range of prices were being reported. For Benin it was $1,525 to $1,650, Ghana from $1,425 to $1,500, Ivory Coast (IVC) from $1,350 to $1,450, Nigeria from $1,275 to $1,350 a tonne C&F India/Vietnam.

Except for Nigeria, shipments from other origins have not started.

A clearer picture of RCN prices will be available when actual shipments start from the major origins, trade sources said. “We have to say that speed and timing of movement of IVC RCN will have major impact on RCN pricing and kernel availability in 2011,” they reiterated.

There is nothing on the horizon to change the outlook – which continues to be hazy.On the supply side, RCN prices are unlikely to come down until flows are in full swing and shellers have replenished inventory, as most processors in India and Vietnam are working partially in the last few weeks and some may have to shut operations for some time in April till they get shipments from Africa.

A significant improvement in the supply situation is possible only if an efficient alternative route for IVC RCN is found, Mr Pankaj N. Sampat, a major Mumbai-based dealer, told Business Line .

On the demand side, he said, there is considerable concern about the impact of high prices on the usage of cashews – especially because prices of other nuts have eased from the peaks of 2010.

If the demand comes down dramatically in the US and Europe, that may have an impact on demand and prices in Asia as well. But if the decline is small, the Asian demand will probably take up the slack because the high prices of the last six months have not had any negative impact on Asian demand, so far.

By June/July, “we will have better idea of actual supply and costs of RCN plus kernel usage trends in the major markets”, he said.

Depending on what happens in the next 3-4 months, “we will see a new price range being established for the next few quarters. The new range might be lower than the current levels, if RCN prices and kernel demand come down in the meantime, but will certainly be higher than the 2010 average”.

Until then, the pattern of regular activity for nearbys will continue, he said. This will support market around current levels unless the buying in the second quarter is very slow.

A slow kernel market may induce some shellers to come out with more offers as they would not like to keep buying RCN without making some kernel sales.

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