Indian cashew market commenttary

Cashew market was steady in Week 13. There was reasonable activity in W320 in the USD 3.20 to 3.30 per lb FOB range for shipments up to June. Some business was done for third quarter as well. Not much business was reported in other grades. Offering range was more or less unchanged - W240 from 3.60 to 3.75.

Cashew market was steady in Week 13. There was reasonable activity in W320 in the USD 3.20 to 3.30 per lb FOB range for shipments up to June. Some business was done for third quarter as well. Not much business was reported in other grades. Offering range was more or less unchanged - W240 from 3.60 to 3.75, W320 from 3.20 to 3.30, W450 from 3.00 to 3.15, SW320 from 3.05 to 3.15, SW360 from 2.75 to 2.90, SSW from 2.65 to 2.80, Splits from 2.15 to 2.30, Pieces from 1.90 to 2.05 FOB.

Tanzania RCN continues to be traded around USD 1250 but in small lots - they still have a lot to sell but delay in arrivals / shipments from West Africa may provide a window for them to sell (provided kernel activity picks up). Offers from West Africa are steady at the higher levels - Benin around USD 1000 + IVC around USD 875 + Nigeria around USD 800 C&F. Activity is limited because (a) arrivals are slow (b) shellers are in no hurry to buy as kernel market is quiet. But they are well prepared to enter the market if they see RCN prices come down OR if they see revival of kernel activity. Indian RCN prices are high but this does not have direct impact on export costs as exporting shellers use very small quantities of domestic RCN. However, the continued firmness in Vietnam RCN prices does affect the export costs of Vietnam shellers.

The trend of business for short periods for the last year and half has been reasonably good for the buyer. Though the prices went up much beyond historical highs in the middle of 2011, their average cost for 2011 was not very high. And the average for the last two quarters has been much lower. Shellers have had to carry the burden for the last six months having bought bulk of the last year's crop when prices were at / close to the peaks. Things could be different in the 6-12 months.

The fact that not much kernels have been sold in the last quarter and that WA, RCN arrivals in India & Vietnam are going to be slow has the potential to create a unnatural and unwanted squeeze in kernel supplies in the next 3-4 months. Beyond that, kernel supplies should be okay provided nothing goes wrong with the crops in the next eight weeks.

As discussed earlier, Cashews lost significant market share in the second half of 2011 in all markets including the Asian market. It would be reasonable to expect that lower prices and better availability will help Cashews regain some of the lost share in most markets - especially India & Asia from the second half of 2012 if prices do not go up too much.

Market is very delicately poised. In the next 8 eight weeks, things could change quickly - either way. Sudden pick up in arrivals (collection) and continued quietness in kernel market could lead to prices drifting lower to unexpected levels. Fears of crop problems (size or quality) coming true and kernel activity picking up would lead to a jump in prices. All these things are impossible to predict and could happen to varying degrees.

Overall, we continue to feel that for the next few months will be steady around the current levels - with possibility of 5% decline if kernel activity does not pick up in Apr/May and potential for at least 10% increase in the latter part of the year.

Mr Giridhar Prabhu, Achal Cashews Private Limited, Mangalore

There is positive news on regulatory front that Maharashtra Government has made the Vat rate at 5%. The previous rates from 1/4/2010 to 31/3/2012 were at 12.5%. This augurs well for consumers as well as traders and small outlets who had difficulties in absorbing and passing on this rate.

Mumbai is a principal terminal and trading market leading to a good consuming base with a worthy target consumer base.

West Africa shows some inherent discovery of value and is not supporting an earlier view of low prices.

Tanzania has some quantities which are being slowly brought down.

The cashew world is in a peculiar transition period where the high prices of July to September' 2011 have had a cascading fall.

Any price fall is good for consumption but the lack of off take is surprising experienced people. There are no in-depth studies across the value chain. If Brazil is surely present in West Africa there are good options in the present supply. If they do so supply crunch in kernels is not likely.

The Indian crop is not fancy and it is 'India for India' and not 'India for exports'.

Kerala is having moisture issues and arrivals are yet to gain momentum. Manufacturers will get squeezed for some time till normal consumption resumes.

Mr Rajendra Sabat, Sabat Associate (Cashew Expert/ Consultant), Odisha.

Each and every one in coastal part of India is waiting for new crop to arrive. Generally in Andhra Pradesh the new crop arrives first then in Coastal Odisha and lastly at Jeypore. Now in some areas like Palkonda of Andhra Pradesh crop has started coming. The price is around Rs 65 to 70/- per Kg of RCN. But the quantity is very low. It is expected that the prices of new crop will start at around Rs. 65/- per Kg.

Now all most all the old local RCN closed and gradually the processing units are closing down for the year. But due to availability of some unsold stocks of IVC the units are running. The kernel demand was not there at all but recently some sale occurred last week. But only the wholes are being sold and no broken grades have been sold.

Source Cashewinfo