Cashew market ruled steady last week with a firm undertone. Some business was done for W320 in the range of $3.95-$4 from India and Vietnam as there was a fair amount of buying interest from several directions.

There were also reports that Vietnam sold splits at around $3.45-$3.50 and pieces from $3.25 to $3.35 (f.o.b). Most processors were asking a few cents more and that too for limited quantities, according to the trade sources.

Meanwhile, raw cashew nut (RCN) prices have moved up from the lows seen in April. Shipments from West Africa are picking up but not to the extent expected. It seems that the shipping period will extend several weeks beyond normal. This will affect the kernel yields and will also mean continued tightness of kernel availability for the next few months, they said.

In the last three weeks, prices have moved from $3.80-$3.85 to $3.95-$4 (f.o.b.) and all markets have been buying for third quarter shipments which indicates that offtake in January-April has not been as bad as expected. This will probably mean that there will be regular buying to fulfil delivery commitments. Added to that, there will be buying in case of any new contracts with roasters/retailers, they said.

Indian domestic market which was quiet for about six weeks is showing some signs of activity. Traders normally start buying from mid/late June to build up positions before the peak consumption period of August-December. It will be interesting to see how they operate this year – high prices could reduce carrying capacity but if the demand is there, financing should not be a problem, Mr Pankaj N. Sampat, a Mumbai-based dealer told Business Line .

Market may go higher

Considering this demand side scenario and no possibility of any immediate increase in supply, some people feel that there is room for the market to go still higher, he said. “Our feeling is that even if the prices do not go up too much, there is very little chance of any price decline in the near future.

Market will continue to be supported by regular buying from some market or the other (although there may be periodic dips if some processors need to sell in a hurry to finance RCN purchases - this may not happen if the RCN flow is spread over a longer period).”

Apart from any major development in external factors, a change in the cashew market trend will happen only when the supply-demand balance turns easier – this is possible only when supply increases significantly (good crops in all origins) or if there is a significant move away from cashews in major consuming regions, he said.

“There are no signs of the either at the moment but things could change at the end of the year or beginning of next year”. Until there are clear indications of change in either of the fundamental factors, we should expect a steady to firm market, he added.

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