Cashew kernel market shows some buoyancy on tight supplies

KOCHI, APRIL 8:  

The global cashew market has shown some buoyancy last month and the trend is expected to remain in April, after remaining subdued in January and February.

“Reasonable activity was witnessed in March and most of the business was for shipments up to May/June. However, some business was done for shipments in the second half of 2015,” trade sources said.

Last month cashew kernel prices were – depending on the processor and shipment period – in the range for W240 from $3.65-3.85; W320 $3.40-3.60; W450 $3.15-3.25; SW320 $3.25-3.35; splits $2.90-3.10 and pieces $2.85-3 all per lb (fob).

“In the last 2-3 weeks, prices for WW320 and SW320 have moved to the higher end of the range with hardly any offers near the lower end of the range,” Pankaj N Sampat, a Mumbai-based dealer, told BusinessLine.

Broken grades continue to be tight supplied as yield per tonne of Raw Cashew Nuts (RCN) has come down to normal levels and even below normal for more efficient shellers, and usage, especially in Asia, has gone up, he said.

In the first quarter of 2015, Indian shellers have been served a double blow, he said.

First, a huge wage increase in Kerala which has made processing very uncompetitive.

And this week, a reduction in duty credit from 5 per cent to 2 per cent of FOB value for all exports after April 1.

Higher productivity and cheap labour has steered Vietnam to the top rung as the producer of RCN and exporter of cashew Kernel, pushing India to the second slot, he pointed out.

According to Pankaj, Northern Hemisphere crops, which are projected as 75 per cent of the world production, are currently being harvested.

Crops are expected to be good in most areas. There is, however, concern about lower quantity in some areas and lower kernel yields in some others.

Also, there is concern that logistic issues in some countries might delay the movement of RCN to Vietnam and India.

RCN prices were trending lower in February on expectation of good crops but started moving up from mid-March due to slow arrivals.

Currently, India and Vietnam RCN are trading in the range of $1,450-1,500 a tonne. Prices from West Africa are in the range of $ 1,100-1,300 a tonne c&f, depending on origin, quality, shipment period, payment terms.

-The Hindu