Cashew offtake likely to improve

KOCHI, JULY 2: 

The cashew market has been steady all through last month with prices slightly higher than the lows seen in April-May.

Indications are that there is a slight possibility of breaking the top end of the range if Asian and the US-EU demand kick in together in the next 2-3 months.

The domestic market has witnessed some buying interest in the last two weeks. However, there has been no significant change in prices, market sources said.

Last week, trades and offers have been in a narrower range i.e., W240: $3.80-3.90; W320: $3.25-3.40; W450: $3.00-3.15; SW320: $3.00-3.10; SW360: $2.85-2.90; Butts: $2.40-2.45; Splits: $2.20-2.30; Pieces: $1.50-1.55 all for one lb (f.o.b.).

DECLINE IN RCN PRICES

“We have seen a decline in raw cashew nut (RCN) prices in all origins – part of it due to yields and also due to sheller reluctance to buy since kernel activity has been limited to short term buying”, Pankaj N. Sampat, a Mumbai-based dealer told Business Line.

Apart from some problems in the first few weeks of the season, movement from West Africa has been smooth but the unseasonal rains in some areas have affected the yields.

RCN prices were declining until the middle of June. Offers and trades are in the range of $750-925 a tonne (c&f) depending on the quality. Overall, RCN supply in 2013 is likely to be the same as 2012 despite the big shortfall in Brazil production.

Shelling capacity is not being utilised fully as shellers have not bought RCN due to finance issues and also due to slow kernel market.

So, kernel availability could be tight in some months – this could mean short-term price spikes but may not make a difference.

Since the supply side factors are now known and factored into the market, it will be the demand side which will drive the market in the coming weeks.

With fairly stable prices in a narrow range for a reasonably long period, it is safe to expect improvement in off take.

The next two months will give us a better picture of the Asian situation as this is the time when inventories are built up.

Considering all this, the trade expect the market to continue in the current range with a slight possibility of breaking the top end of the range if Asian and the US-EU demand kick in together in the next 2-3 months.

Source: Business Line