Global raw cashew prices hit decadal low on Covid impact

Covid-19 has taken its toll on global raw cashew nut prices, which are at their the lowest in the last 10-12 years, ranging between $900 and $1,250 a tonne depending on origin and quality.

The prices crashed during February-March — starting with raw cashew net (RCN) and later, kernels. But the market moved up a bit in April, thanks to a spurt in retail demand in the US and the EU. Due to reduction in RCN prices and the slowing down of demand, prices eased a bit in May, said Pankaj N Sampat of Samsons Traders.

The extended lockdown has hit consumption in India as well, the biggest cashew consumer. However, it is expected that the lower prices will push up consumption beginning August, which is considered as the peak demand season. It is also likely that the consumption in the US and the EU may go up a bit due to increased snacking, he said.

Prices likely to rise

“Although there will not be a big jump, the prices will move up gradually in the second half of 2020,” Sampat said. Kernel supplies may be tight due to the slower movement of RCN from Africa to Asia for processing. This could lead to a spurt in prices.

Referring to cashew crop this year, he said it is expected to be better because of reasonable weather. Vietnam and Cambodia have harvested a good crop. But Covid has had an adverse impact on collection in many countries in West Africa.

The collections in India are also likely to be significantly less due to movement restrictions. The shipments to India and Vietnam from West Africa for processing will be slower. The delays in collection and shipment will result in lower kernel yields than normal and further reducing the overall kernel supplies, he added.

K Rajesh of Kerala Cashew Industries Protection Council said that RCN prices are now reasonable from the earlier level of $1,700 per tonne. However, dwindling exports have led to lower production, prompting processing units to focus on the retail market. The sector could ship a minimal quantity to the US and the EU due to the perking up of demand.

He pointed out that the industry is facing labour shortage with the departure of migrant labourers, forcing units to manage production with a minimal workforce. The easing of lockdown has started witnessing some positive trends of market revival. The shipments of RCN from Ivory Coast and Ghana for the current season have already commenced and Kerala’s total requirement is estimated at eight lakh tonnes.