Cashew prices drop in lacklustre market

KOCHI, MARCH 27:

The cashew market is witnessing a declining trend on slack demand and last week it remained, by and large, quiet.

Price range came down by 5-10 cents a pound. Current offers are: W240 from $3.60 to $3.75; W320 from $3.15 to $3.30; W450 from $3 to $3.15 ; SW320 from $3.10 to $3.15; Splits from $2.25 to $2.35; Butts from $2.30 to $2.40; Pieces from $1.95 to $2.05 a pound (f.o.b).

Few processors were selling at the lower end of the range, trade sources in Mumbai said.

In the first quarter of this year, kernel prices have come down by almost 10 per cent that is., from the range of $3.40-$3.60 to $3.15-$3.30 a lb (f.o.b.), Mr Pankaj N. Sampat, a Mumbai-based dealer told Business Line.

He said that volume traded has been smaller than normal and little business has been done for shipments beyond June. Lack of forward sales means shellers will have to come out and sell at some stage. “But, since they are not buying raw cashew nuts (RCN) so far, they may not be under too much pressure to sell unless RCN and kernel prices are in parity,” he said.

Lack of forward cover means roasters/retailers will have to start buying soon to maintain inventory and keep the chain filled to meet the core demand, even though they may not buy for promotions until they see some price stability.

Cashew lost significant market share in the second half of last year due to high prices and lack of product in certain periods. It would be reasonable to expect that lower prices and better availability will help cashew regain some of the lost market share, definitely in Asia and “may be” in the US and Europe, Mr Pankaj said.

If activity does not pick up during April, “we could find ourselves in a situation leading to a squeeze in kernel supplies during the summer in Europe and the US due to reduced processing/shipments from India and Vietnam in the second quarter”. This could lead to an unnatural and distorted price movement. If there is reasonable activity in April/May, shellers will become active in RCN purchases and this will ensure reasonable flow of RCN from Africa and kernels from India and Vietnam and that in turn will give some stability to prices rest of the year.

RCN prices are steady with Ivory Coast (IVC) in range of $850 to $875 a tonne (c&f) and Benin in the range of $950-$975 a tonne (c&f). Despite very little interest or activity, Tanzania is sticking to much higher levels.

Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article3251500.ece?homepage=true&ref=wl_home