Cashew market likely to see uptrend in H2

KOCHI, FEB 6:

The cashew market, after remaining very quiet the week before last, witnessed reasonable activity last week with the prices of several grades moving up. But the rise in W240 and W320 was relatively more with hardly any offers at the lower end of the range.

Indian domestic market was steady with not much change in the price of broken grades.

Prices during the week were W240 at $3.90-4.00; W320 at $3.35-3.50; W450 at $3.15-3.25; SW320 at $3.00-3.15; SW360 at $2.80-2.90; SSW at $2.40-2.50; splits at $2.00-2.20 and pieces at $1.40-1.55 for a lb (f.o.b.).

On the demand side, there are reports that offtake in the last quarter was decent, Pankaj S. Sampat, a Mumbai-based dealer told Business Line.

Beginning of the year has seen reasonable activities from all markets, except the US, which was less active than others. There is a strong feeling that if there are no major surprises on the supply side and prices remain within a reasonable range, there could be growth in usage in all markets. And this could lead to a gradual rise in prices in the second half of the year. On the other hand, downside from current range is limited because processing costs will not go down; not much chance of a big decline in raw cashew nut (RCN) prices even if the 2013 crops are normal in view of 2011-12 shortages; prices of almost all nuts have been on gradual uptrend, except for almonds which have risen sharply and recent weakness in the dollar should help buying decisions in most markets.

During the next few months, “we can expect some volatility depending on crop “news”.

Hopefully, things will not go out of hand like 2012 when the jump in April/May sent wrong signals and higher prices could not be sustained. Another thing that the industry needs is liquidity in lower grades and narrowing of price differentials.

REASONABLE RCN ACTIVITY

There was reasonable activity in RCN market as well during January. Stocks of 2012 crop are being picked up briskly in the range of $850-1,100 a tonne depending on quality. Tanzania is steady at around $1,325-1,350 with rumours of lower quality trading $50-75 lower. Mozambique is trading at around $900.

Over all, the feeling of the trade is that prices will move in current range with bias towards the higher end of the range with a strong possibility of a gradual increase in the second half, he added.

Source: Business Line