The cashew market was subdued last week with some stray business for W240 at around $4.40 and W320 between $3.85 and $3.95 (f.o.b) by a few processors.

However, there were offers and even some sales from large processors at 5-10 cents higher. There was little change in the prices of other grades. W450 was at around $3.80, SW320 at around $3.75, SW360 at around $3.60 (f.o.b).

The domestic market continued to remain quiet but there was no pressure on processors as the availability was limited, market sources said.

In the past 2-3 weeks, RCN prices have come down a bit in all origins, mainly because of lower quality and limited buying interest, as the kernel market has been in a lull for some time. Movement of RCN from West Africa is still very slow and hopefully, things will pick up after mid-May (shipments so far have been 50 per cent less than normal), they said.

Since RCN arrivals will be spread over a longer period:

(1) yields will be lower than normal (2) kernel availability will continue to be tight for a longer period i.e., till pipeline is filled; and (3) usual pressure on processors to make sales to be able to buy more RCN will be reduced, Mr Pankaj N Sampat, a Mumbai based dealer told Business Line .

There seems to be a fair buying interest for shipments up to Julu/August – especially from the US and from some traders in Europe – at around the low end of the current range, he said. But, “selling interest is limited. Most processors prefer to wait unless until they get RCN physically – due to the slow movement from Africa, they do not know the quantity they will have for processing in next 2-3 months.”

Meantime, they are making some sales when they get bids at the higher end of the current range.

Bulk buying

Unless kernel prices drop or they get an indication that higher prices have been accepted by consumers without an adverse impact on off take, roasters and retailers in the two big importing regions are unlikely to buy in bulk for forward deliveries, he said.

Unless RCN prices fall significantly and supply becomes comfortable, shellers will be reluctant to reduce kernel prices. So, the stalemate is likely to continue for some time with the pattern of periodic buying for nearbys supporting the market in the current range. The 15 per cent appreciation in Euro will provide some relief to the second biggest importing region when they are buying for second half 2011 deliveries, he said.

“We might see a correction in prices after a few months when supply position has become comfortable, if there is a big adverse impact on usage in the US and the EU in second and third quarters. But, if the Asian demand is as strong as it was last year (August/September onwards), the extent of correction may not be large,” the trade predicted.

Overall, the outlook continues to be unchanged, Mr Pankaj said. “However, we can expect market to move sideways in the current range (with a small possibility of a price increase if demand in second half is stronger than expected). This will continue until a tipping point is reached by way of a big drop in usage in the medium term or substantial improvement in supply (which is possible only in the long term) leading to big drop in RCN prices,” he added.

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