Cashew rules steady

KOCHI, MARCH 18: 

Cashew ruled steady last week with stray trading activities with several markets mainly in W240 and W320 grades.

Domestic market continued to be soft but there was reasonable buying at the lower prices.

The prices remained unchanged for W240: $3.85-4.00; W320: $3.30-3.45; W450: $3.05-3.15; SW320: $3.00-3.10; SW360: $2.80-2.90; Splits $2.10-2.20 and Pieces $1.40-1.50 f.o.b.

There were very few offers at the lower end of the range and limited buying interest at the higher end of the range.

Most roasters have probably covered major portion of their needs up to June/July and some have covered a small portion of their needs for second half, Pankaj N. Sampat, a Mumbai-based dealer toldBusiness Line.

In the next 6-8 weeks, roasters will have to buy major portion of their needs for second half. “We expect that traders will probably want to cover their existing short positions and may be even go a little but long, before that so that they are comfortable in making new contracts with retailers,” he said.

RCN OUTPUT RISES

Raw cashew nut (RCN) production is estimated at around 7.3 lakh tonnes as against 6.75 lakh tonnes in 2011-12, according to official sources.

The prices for raw nuts are at Rs 75-85 a kg depending on the quality and area of production.

But, the indigenous production still remains much below i.e., below 50 per cent of the requirement of the processing industry estimated at around two million tonnes, industry sources said.

RCN prices in Vietnam moved up further with untimely rains causing some concern. Vietnam shellers have started contracting for West Africa RCN and this might provide some support to RCN traders as arrivals pick up in the coming weeks.

At the beginning of March, there were some signs of RCN prices softening but they have stabilised now.

A clearer picture of the West Africa RCN price trend will be available only in April when flow picks up, provided there are no major logistical issues, he said.

By that time, if RCN movements are smooth and RCN prices have come down, some shellers will continue to sell at lower levels and some might be willing to sell some volume for forwards at middle or higher end of the current range.

On the other hand, if for some reason RCN prices are firm “we can expect kernel prices to be steady to firm for prompt/nearbys and higher than current range for forwards.”

There is nothing on the horizon to change the broad view on the market trend i.e., limited downside, usual volatility in April/May and a good possibility of higher prices for whole cashews in second half of the year unless RCN prices come down significantly, and offtake for lower grades picks up with lower price differentials.

Source: Business Line