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Cashew prices moved up a few cents last week and business was done for W240 at around $4.35; W320 $3.95; W450 .o.b.); WS at around $3.40; LP at around $3.20 (f.o.b.). Even at the higher levels, selling interest was limited. Activity in the Indian market picked up – specially for brokens, trade sources said.
Raw cashew nut (RCN) arrivals continued to be slow. Clearer picture of RCN price trend will be available in April, but it certainly seems that RCN supply in India and Vietnam will be tight for a couple of months, may be more if a viable alternate route for movement of Ivory Coast RCN is not found quickly, Mr Pankaj N. Sampat, a major Mumbai-based dealer told Business Line . “Until shellers have covered a reasonable quantity of RCN physically they will be reluctant to make any large kernel sales because of the uncertainty of supply despite the high prices,” he said.
Kernel buyers, he said, seem to be content to buy small volumes at regular intervals on hand to mouth basis. They are probably waiting for prices to come down before making any large purchases to replenish depleted inventories. For now, it does not seem whether supply will become comfortable soon. Till then, the continued buying for nearbys will support the market.
Even if the RCN flow picks up in April/May, initial prices will be high as most sellers are running out of stock. “We might see a softening of RCN prices in June/July, but that may not have immediate impact on kernel prices unless kernel offtake in the next two to three months is very low and buyers are able to extend their limited inventories for a few more weeks,” he said.
A significant downward move in prices is possible only if during the second quarter, the RCN flow is normal and the kernel demand is very low. If supplies picked up in the third quarter it might not lead to lower prices as the third quarter is the peak buying period for all markets, including the largest consuming region, Asia, he said.
Outlook for the second half of the year continues to be hazy, traders said, adding that “everything points to a tight supply and firm market for next 2-3 months which might continue into third quarter if the RCN flow does not pick up in second quarter.”
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