Cashew prices likely to inch up on demand 24-08-2012

Cashew market ruled steady last week with hardly any business reported even though there was a fair amount of buying interest seen from some traders in the US and Europe at lower end of the range.

 

 

 

 

Prices remained unchanged and they were for W240 from $3.75-3.90, W320 from $3.30-3.45, W450 and SW320 from $3.20-3.30, SW360 from $2.90-3.10, Butts from $2.30-2.45, Splits from $2.10-2.30, Pieces from $1.75-1.90 all for an lb (fob).

The domestic market moved up a bit, but the activity was slow. Chinese demand in Vietnam is also slow but expected to pick up, trade sources in Mumbai said. Buyers in the main importing regions - the US and Europe - are picking up any offers they see at the lower end of the current range for nearbys. At the same time they do not seem to be willing to pay the 10-15 cents premium that shellers are asking for the forwards. This situation is likely to continue until there is some contracting with retailers, Pankaj N. Sampat, a major Mumbai-based dealer, told Business Line. In normal times, "some people - on both sides - would be willing to take forward positions but the precarious global economic situation is making things difficult. Buyers do not want to pay premium for securing volume as they do not know what they will be able to sell", he said. Shellers do not want to sell forwards at lower end of the range because it is below cost and they do not know or see any prospect of decline in Raw Cashew Nut (RCN) prices since availability in next few months is limited. 

 

Prices for West African RCN came down for the lower quality parcels - to around $800 a tonne for Ivory Coast (IVC), around $900 a tonne for Benin and at around $1,100 a tonne for Bissau/Senegal/ Gambia. Traders who have stocks of good quality do not seem to be in a hurry to sell. There are reports of some trades for Indonesia RCN at around $1,300-1,350 a tonne (c&f). Small shellers who were selling at lower levels in June/July have been quiet for the last few weeks. Most of the other shellers who have RCN to process till end of the year are waiting to see how kernel market behaves in coming weeks. As they have paid high prices for the RCN and there is not much replacement available, they are not keen to sell at lower levels, he said.

 

Us, EU Demand factor


In the medium term, demand will be the factor that will determine market movement. There is no big news expected on the supply side until the next Northern crops in 2013. Of course, the Brazil and East Africa 2012 crops, which will start in Sep/Oct, will have some impact but not too much as they only produce 25 per cent of the world crop. In the next 6-8 weeks, "we will know trend of Asian demand for the last quarter and we will probably get some idea of US/EU demand for the first half of next year. If activity picks up in this period, we could see prices inch up a bit to the levels seen at the end of last year", he said. Otherwise, prices will continue to move around the current level unless there is a big drop in demand followed by a decline in RCN prices.

 

Source VINACAS

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