Cashew market was steady last week with a slightly firm undertone. Business was done from India and Vietnam to the US and Europe for W240 from $4.40 to $4.45, W320 from $3.90 to $4, Splits at around $3.40, Pieces at around $3.25 (f.o.b). Some processors were even able to sell few cents higher. Indian domestic market continued to remain quiet, trade sources said.

Raw cashewnut (RCN) market was also “very steady with Benin offering at around $1,550 and Ivory Coast (IVC) at around $1,400. As shipments from both origins are slow, buyers are reluctant to buy additional quantities,” Mr Pankaj N. Sampat, a major dealer told Business Line .

Initial reports, he said, indicate yields are lower than normal in both origins and there is concern that there will be further reduction with delays in movement and shipment, especially from IVC where the situation is becoming more difficult even for shipments from other ports due to the civil strife. There are reports of some trades for Guinea Bissau at around $1,600. India and Vietnam RCN prices came down a bit but still very high compared to the kernel market.

In the last one year, cashew prices have increased by about 35 per cent and “we should expect some correction but since the increase has been gradual and reflects processing cost increases to a great extent, the decline may not be sudden or large. A significant decline will not happen till RCN prices ease and supply position becomes comfortable”, he said.

Reduced offtake

Europe and the US expect reduced offtake by retailers due to less promotions and consumers' shift to other nuts or snacks consequent to the high prices. However, the entire increase has not yet been passed on in the retail prices. Clear picture of this trend will be available by middle of the year, he said.

But this may not have a significant immediate impact on prices because share of the US and Europe in world consumption is lower than what it used to be few years ago and the reduced availability will offset reduction in offtake in these two regions. The real impact of reduced offtake will be felt only when inventories are replenished and there are good crops in all origins to bring supply back to normal.

“We expect the market to move in the current range – with periodic spikes and dips – for next the few months because kernel availability will be lower due to late crops in Vietnam/India and slow movements from Africa plus short crop in Brazil; last 15-18 months pattern of buying for nearbys means there will always be buying interest from some direction every few weeks; and India and West Asian demand is expected to pick up mid-May onwards,” he added.

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