Fragile economy curbs cashew market movement

The cashew market remained unchanged last week with some slight pick up in enquiries not translating into actual business. There was reasonable buying interest at the lower end of the range for nearbys as well as forwards but selling interest at the lower levels was limited.

Price range (offers and trades) is almost unchanged i.e., W240 from $3.60 to $3.75, W320 from $3.15 to $3.35, W450 and SW320 from $3.00 to $3.10, SW360 from $2.70 to $2.90, splits from $2.00 to $2.25, Butts from $2.10 to $2.30 and pieces from $1.60 to $1.75 a lb (f.o.b.).

A look at the price movements during the past four years will give an idea about the market trend. During 2009 and first quarter of 2010, W320 traded in the rage of$2.25-2.75 - substantially lower than current range. At the same time, during the past three years processing costs have gone up significantly, Pankaj N. Sampat, a Mumbai-based dealer told Business Line. 

Price movement in the first half of 2012 was very erratic - from $3.70 in January to $3.20 in March to $3.80 in early May and $3.50 by early June. Since then, market has been moving sideways in a narrow range of $3.25-3.50. "Current range is the lowest in the last two years and is significantly lower than the average of last two years. If you take into account the increase in processing costs, current prices are probably lower than the average of the last five years - or at least close to that," he said. 

Due to the fragile economic situation, all links are content to operate with short term positions as the market continues to move in a narrow range. But on the other hand, there is the risk of sharp movements if something unusual happens. As far as cashews are concerned, supply side factors are well known and no big surprises are expected.

RCN market quiet

There was not much activity in the RCN market except for some trades for good quality Indonesian nuts in the range of $1,325-1,350 a tonne (c&f). "There seems to be reasonable quantity in West Africa but there is little buying interest because of dull kernel market and quality concerns. No news yet from Tanzania or Mozambique about pricing or movement," Pankaj added. 

Source www.thehindubusinessline.com