Cashew market turns active as trading for next year begins

KOCHI, OCT. 16: 

The cashew market has turned buoyant over the last 2-3 weeks with some business taking place for the first half of 2014 at a price 15-20 cents higher.

During the second half of September and early October, some processors sold W-240 around $3.10/lb (f.o.b) for nearby shipments.

There was reasonable buying interest at these levels but the volume traded was limited to a few processors as many have sold earlier at higher prices, said market sources.

Cashew prices last week were in the range for W-240 $3.60-3.80, W-320 $3.10-3.30, W-450 $2.95-3.10, SW-320 $3-3.10, splits $2.25-2.30 and pieces $1.45-1.55/lb (f.o.b).

Domestic prices moved up during September but have been ruling steady for the last 2-3 weeks.

“There is good demand for quality product – wholes as well as brokens. We can expect a slow down in activity during the end of this month or early next month. However, there should be a revival after mid-November for the marriage season, depending on retail offtake in the festival season,” Pankaj N. Sampat, a Mumbai-based dealer told Business Line.

In the last two months, the kernel market has dropped below the $3.25-3.40 support range seen in the last 9-12 months and the broader $3.20-3.50 range over the last 15-18 months.

Processors, who are able to make forward sales, have been selling 15-20 cents higher depending on the grade and shipment period.

Due to the high prices and slow shipments from Indonesia and no movement from Tanzania, prices for West African raw cashew nut moved up 10-15 per cent, especially for the better quality, dried nuts.

There are reports of trades for Bissau at around $1,100 a tonne and for Ivory Coast and Ghana from $750-850 a tonne depending on quality.

In the next six months, little raw cashew is available for processors in India and Vietnam.

Unless the Tanzania raw cashew prices rule substantially lower than last year, processors will not be able to reduce kernel prices.

Latest reports indicate that Tanzania auctions should start soon.

What processors and raw cashew traders do in the initial auctions will give some idea of where the market is heading to.

Source: The Hindu