Cashew market continued to move up with the prices of almost all grades rising on good demand amid limited supply in the overseas market.

W240 was traded at around $4.50, W320 was traded from $4 to $4.10, W450 at around $3.95, Splits at around $3.60, Pieces were sold at around $3.50 (f.o.b.), and even some processors were able to sell some grades few cents higher, trade sources said.

Although volume traded was small, several markets participated, mainly for nearbys. However, some business was done up to August/September shipment as well, Mr Pankaj N. Sampat, a mumbai-based dealer told Business Line .

Raw Cashew Nut (RCN) prices have also moved up by $75-$100 a tonne i.e., equivalent to 15-20 cents per lb of kernels, in the last couple of weeks. Brazil buying target is reported to be 30,000-50,000 tonnes, and it is adding to the usual competition between India and Vietnam for West African RCN.

Availability of good quality RCN is limited. A lot of the Ivory Coast (IVC) RCN will have lower kernel yields and higher percentage of second and third grades because of inadequate post collection handling and delayed shipments, he said. “Shipments spread over a long period (normal March to June - this year May to August/September) means a continued tight pipeline and less pressure on shellers,” he added.

Global Cashew Task Force

Meanwhile, according to Mr Pankaj, who is currently attending the World International Nut Council Congress in Budapest, a much awaited annual gathering of handlers of all tree-nuts and dried fruits has mooted the formation of the Global Cashew Task Force. Main objectives are to promote production of cashews, promote food safety in the supply chain, initiate nutritional and heath studies, generic promotion of cashews by increasing awareness of health and nutritional benefits.

All stakeholders should support this initiative and help the Task Force in its objective of a healthy and sustained growth of the cashew sector, he told Business Line from Budapest.

All cashew stakeholders present at the Budapest Congress agreed that the last 15-18 months have been difficult and challenging for everyone in the cashew supply chain. Tight supply situation, uncertainties about supply and demand, firm market and increasing prices, changes in the buying pattern and pricing power have made it necessary for everyone to re-think their strategies to get through this difficult period, which does not seem to be ending soon, he pointed out.

There is an understanding that the big increase in prices in the last 18 months – almost 50 per cent higher than the five-year average will certainly have impact on usage of cashews in many markets by way of reduced promotions, lower pack size, lower percentage in blends, and so on. At the same time, there is also the realisation that there have been big changes in the market such as higher consumption in spot markets, where price changes are transferred to the consumer fast, higher raw material and processing cost, stagnant production with weather related shortages and steady growth in overall demand, despite reduction in some areas.

Unless the supply-demand balance is restored by big increases in production, there is very little chance of softening of prices “although we will certainly see periodic dips from time to time”. Until this happens, volatility with an upward bias will continue. “Even when the market comes down, there is very little chance of it reaching the lower end of the five-year range – we will probably see it settling around the middle of the last 12-month range. We must remember that almost all nuts – and other food commodities for that matter — have been trending higher in the last few years.”

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