Uncertainties, supply delay hit cashew trade

Uncertainties and delay in cashew supply is turning to be a major concern in the global cashew trade. Traders and roasters seem to be content to sell and buy limited quantities as and when needed as the uncertainties are much larger than normal. Political uncertainty in Ivory Coast, the biggest supplier in West Africa is a worrying factor in the supply chain.

“Every stakeholder in the cashew supply chain is confused and uncomfortable with the current situation. Buyers are afraid of taking any big positions,” Pankaj Sampat of Samsons Trading told FE. Despite the historical high prices, shellers are reluctant to sell any large volumes as the raw cashew nuts pipeline is empty and until the gap is bridged, raw nut prices are unlikely to ease, he added.

“Ivory Coast supplies nearly four lakh tonne of raw cashew to the world. Cashew trade would be seriously affected if the problems in that country persists for a longer period,” Pratap Nair of Vijayalakshmi Cashews told Fe. The market is likely to take a cue when the new crop in India and Vietnam comes to the market by March. Bulk of the raw cashew production comes to the market during March-June He expects the market to remain steady and firm in the short-run due to the supply concerns.

Pankaj says that despite low inventories of raw cashew and kernels, buyers are reluctant to buy any large volumes because of the high prices. Prices of other tree nuts are a little softer in the last few weeks and this would affect consumption of cashew, he added.

The global cashew trade is estimated at around 5, 13,750 tonne on Kernel basis in 2010. Due to weather problems in most growing areas raw seed production was down by.15-20% in 2010. India, China and the Middle Eastern markets have registered double-digit growth. Asia, China and West Asian markets are the new growth engines of nut consumption, Pratap said.

“We might see some decline in kernel prices if nearby demand during March and May in the new Asian market as well as traditional markets) is much lower than what we have seen in the last few months,” Pankaj said and added that that some experts expect a double-digit decline in the US and EU market in 2011 due to the high prices. This might lead to slower raw cashew nut buying after the immediate needs are covered resulting in lower prices later in the season, he said.

(Source: http://www.financialexpress.com/news/uncertainties-supply-delay-hit-cashew-trade/755014/0)