Cashew sluggish as buyers look for lower offers

KOCHI, DEC 10:

Cashew market was sluggish even though there was some buying interest from the US and Europe at lower levels.

But most of the processors withdrew or were offering at the higher end of the last traded range.

Domestic market was also quiet, trade sources said.

There is not much change in the range of bids and offers i.e., W240 $3.70-3.90; W320 $3.30-3.45; W450 $3.05-3.15; SW $2.60-3.10; SSW $2.40-2.50; Splits $2.05-2.20 and pieces $1.45-1.70 for a pound (f.o.b.).

During October-November, a fair amount of business had taken place for shipment up to March-April with some buyers even buying up to June.

VOLUMES

Volumes were much smaller than normal, which meant that steady buying should continue in the coming weeks.

Although activity in December is expected to be low, if it is very slow, it could lead to bunched up buying in Jan-Feb 2013, Pankaj N. Sampat, a Mumbai-based dealer told Business Line.

Although there is no good news on the economic front and uncertainties continued to stay, there is no deterioration, he said.

“Unless something dramatic happens, we can expect some revival of confidence by second quarter of 2013”.

RAW CASHEW NUT

Meanwhile, the raw cashew nut (RCN) market has been fairly active during the last 2-3 weeks. Bulk of the trader inventory in India and Vietnam seems to have exhausted. Some new shipments, therefore, are being made from West Africa to India, Vietnam and Brazil.

“If this trend continues, most of the 2012 crop will move out before the 2013 harvest starts – which will be a good thing. Tanzania has been able to sell close to 30,000 tonnes in the auctions so far”, he said.

Considering that RCN prices have moved up and movement of lower grades is slow with wider differentials, parity for W320 will be higher.

Availability of larger wholes is likely to be tight with a lower crop in Brazil and smaller nuts in Africa.

Unless demand for lower grades picks up, shellers will face the pressure of carrying costs plus higher parity.

During the last few weeks, prices for all tree nuts have been steady with a firm undertone after a smart rise in price of almonds.

If the prices remain close to the current range, it would be reasonable to expect better offtake in 2013 in all markets.

“We continue to feel that downside is limited unless there is a big increase in world supply, which seems unlikely or some major adverse economic development. If off take picks up, we can expect a gradual increase in prices in coming months”, market sources added.

Source: Business Line