Cashew prices likely to decline

Kochi: The cashew nut market is likely to ease due to sluggish demand for cashew from the global and domestic market. Market prices have eased a bit, but is likely to decline further as consumption from the euro zone is seen slower, traders said.

“People in European countries are worried about their future and consumption is lower and contracts are often delayed. Buying is hand to mouth and the market is quite difficult to predict,” Hari Krishnan R Nair, Chairman of the Cashew Export Promotion Council of India (CEPC) said.

“Actually, nut consumption increased during the problems of 2008 as people remained more at home. But this time, the demand seems to be less,” he added. But cashew nuts are relatively better placed as competing nuts like pistachios and pecans are on the higher side, Hari said.

“For the last several months, everyone has been in ‘wait and watch’ mode. Business is being done every month for 2-3 months ahead. Nobody is taking long positions. It seems that this will continue through December and early January. If the sellers come under pressure to sell before the buyers need to buy, we will see prices drifting lower in the first quarter,” Pankaj Sampat of Samsons Trading said.

Hari feels that the Indian consumption of nuts is also on the lower side and not as expected. “Domestic consumption was very strong in the last FY. This year it has not grown as desired maybe because of the high prices,” he said. On the supply side, Hari feels that the raw nut availability would be better in the current season as production in Western Africa is higher compared to last year. “Indian production is also estimated to be better this year. Lasts season we lost some yield due to erratic rains in Andhra Pradesh,” he added. According to the data provided by the Directorate of Cashew and Cocoa Development (DACCD),

Indian production during 2009-10 stands at 6.13 lakh tonne. During 2008-09 it was around 6.95 lakh tonne and 6.6 lakh tonne in 2007-08. India has to import more than half of its requirement of raw cashew due to the poor productivity of its cashew plantations.

The global cashew trade is estimated at around 5,13,750 tonne on kernel basis in 2010. India is the largest producer and processor of cashews in the world. India exported 91,559 tonne of cashew kernels valued at R2,598 crore and 11,364 tonne of cashew nut shell liquid at R31.85 crore in FY 2010-11.

Source: http://www.financialexpress.com/news/cashew-prices-likely-to-decline/888663/0