Weekly report: Cashew prices may rise in Sep/Oct;no big jump likely

By Pankaj N Sampat
In the first half of August 2014, there has been limited activity in the cashew market. Offers and trades have been in the range of W240 from 3.60 to 3.75, W320 from 3.20 to 3.40, W450 from 3.10 to 3.20, SW320 from 3.10 to 3.15, SW360 from 2.95 to 3.00, SSW from 2.70 to 2.75, Butts from 2.65 to 2.75, Splits from 2.55 to 2.65, Large Pieces from 2.10 to 2.20 FOB.
Cashew prices (FOB origin) in Weeks 32 and 33 :
W240 US$ 3.60 to 3.75
W320 US$ 3.20 to 3.40
W450 US$ 3.10 to 3.20
SW320 US$ 3.10 to 3.15
SW360 US$ 2.95 to 3.00
SSW US$ 2.70 to 2.75
Butts US$ 2.65 to 2.70
Splits US$ 2.55 to 2.65
Large Pieces US$ 2.10 to 2.20

During June & July, there was a fair amount of activity in W320 with USA & Europe - depending on the processor & shipment period, trades have been in the range of 3.20 to 3.40 FOB. Most of the business at lower levels has been for nearbys. Fair amount of business has been done at higher end of
the range for shipment upto Dec 2014. Some business has been done few cents above the range as well for fourth quarter 2014 + early 2015 shipments.
There has not been much activity in W240 - differential has narrowed to about 30-40 cents from the earlier 50-60 cents per lb. Availability of W450 / SW is lower than normal and differential is about 15-25 cents from W320. Prices for Broken grades have moved up sharply - differential is less than 75 cents for Splits & Butts and about 1 dollar for Pieces.
In the Indian domestic market, there has been regular steady offtake every month. There have been periodic spurts in demand for brokens - for short periods, domestic prices for Splits & Pieces have been very close to the international price for Wholes !!Except for small shortages in some areas, 2014 crop in Northern Hemisphere has been reasonably good - most of it has been sold to processors but some quantities are still with traders.
During the season, RCN prices have gone up by 150-250 dollars per mt depending on the origin and quality. On an average, RCN prices in 2014 have been 15-20% higher than 2013, despite the fact that kernel prices have been in the same range as last year (with some premium for forwards). Prices for broken grades have moved up but since percentage of brokens in total yield is low, the increased realisation does not compensate the higher RCN price.
Higher RCN price means that shellers margins are probably under pressure. Keeping in mind that Southern hemisphere contributes less than 25% of the world crop, many shellers may decide to hold on to part of their stocks (either as kernels or RCN) for higher prices during the last quarter.
Since overall availability is comfortable, there may not be a big jump in the market. But, there is an expectation that prices could move up a bit during Sep/Oct when USA / EU buyers cover significant part of their requirements for first half of next year. It would be reasonable to expect more interest in cashews because prices have been in the same narrow range for more than 2 years (giving room for some increase beyond the current range because prices for other nuts are higher than last year).
We would appreciate your comments on market situation, views on trend + likely developments, any special information. and your interest.
Courtesy: Samson Traders, Mumbai