SEP 10, 2011
Week 37 was the sixth consecutive quiet week in the Cashew market. Despite this quietness and sales at lower levels by some processors in Vietnam, most processors in India (and many in Vietnam) are not willing to reduce their prices. Business has been reported from Vietnam for W240 around 4.75 and W320 around 4.40 FOB. Prices from India for W240 around 4.85-4.90 and W320 from 4.55 to 4.60 FOB – stray business was done by some processors. This wide range of prices is distorting the market and making buyers wary of taking on large positions although they are picking up the lower offers.
In the Indian domestic market, there was limited business by a few processors but in general, market continued to be quiet. Wholesalers and stockists seem to be waiting for signals of retail offtake at the beginning of the peak consumption season before taking on additional volume.
On the RCN side, there are some stocks in Guinea Bissau but the stockists are holding on for high prices. The upcoming Southern crops are expected to be normal – although there are reports that adverse weather may affect the crop in some regions of Indonesia. Current price in Indonesia is very high – approx US$ 2000. The next six weeks will provide a reasonable idea of the crop prospects and prices in Indonesia & Brazil. Tanzania prices will be known by end Oct/early Nov. Mozambique RCN prices will not be known until Dec.
The market is in stalemate mode. Activity in the kernel market in the next 6-8 weeks will determine what direction the market will take.
If the kernel demand before end of Oct – either India/Asia or USA/Europe – is good, prices will remain in the current range. If demand in BOTH regions is normal to good, prices could move up a bit. In either case, RCN prices will not decline (since availability till next March is limited). Consequently, a change in price trend will be possible only in second quarter of 2012 provided Northern crops are good and supply becomes comfortable.
On the other hand, if kernel demand in both regions is slow for the next six weeks, prices could start drifting lower from end of Oct – more so if the Brazil crop is good. If this happens, shellers will be slow in buying, leading to lower RCN prices. And that will mean the year will end with higher than normal inventory – most probably in the form of RCN – with a potential of further downward pressure on prices if the 2012 Northern crops are good or even normal.
It is impossible to judge what will happen in the medium term, especially in the current situation when there are so many economical and financial uncertainties in USA & Europe. But the general feeling is that demand in Sep/Oct will not be so low as to trigger a price decline immediately. Indian demand may not be strong but since India is predominantly a spot market, there will certainly be steady buying during the peak consumption period upto end Dec / early Jan. Following the trend of short period buying, USA/Europe will also have to buy some volume in the next 6-8 weeks for late 2011 / early 2012 shipments. These two demand side factors will support the market and trend will change only if 2012 crops are normal to good. Only a dramatic fall in kernel buying in Sep-Nov could lead to lower prices before that – and that is possible only if there are some big negative developments in USA and Europe economies / financial markets.
Would appreciate your comments on current market situation, your views on trends & prospects and any specific news or information
Regards,
Pankaj N. Sampat
Monday, September 12, 2011
Walnut Market Update September 11, 2011
R.L. “Pete” Turner
CROP:
NASS’s official 2011 walnut crop “objective” estimate of 485,000 tons was a surprise to many in the industry. It came up 38,000 tons short of the Packers “subjective” forecast of 523,000 tons set in late July. Never the less, it is still the second largest walnut crop in history, 18,000 tons less than the record 2010 crop.
Growing conditions were similar to last year, as the orchards received adequate chilling hours, above average rain and moderate temperatures, all ideal for a good and quality walnut crop. However, again like last year, the crop is at least two weeks late and most packers will not go into production until the last week of September.
NASS’s survey data indicates the average nut set per tree is down 18 percent compared to last year. However, the nut sizes appear to be larger than last year, so hopefully, we will have more large and jumbo walnuts available than we did last season.
Listed below is my guess-a-mate for the major varieties tonnage, which is based on the tree nut count and nut sizes.
Variety 2010 crop 2011 crop Difference
(Tons)
Chandler 209,000 198,000 (11,000)
Hartley 70,000 65,000 (5,000)
Tulare 47,000 52,000 5,000
Howard 55,000 50,000 (5,000)
August walnut shipments were 19,597 tons, about the same as last year. This puts the 2010 crop total year shipments at 506,568 tons, 53,000 tons more than last year. Again, the market was driven by the record bookings from China/Hong Kong, Turkey/U.A.E and Europe. Exports sales accounted for 60 percent of the total shipments with domestic at 40 percent.
The 2010 crop carry-over is expected to be less than 40,000 tons. This coupled with the 485,000 ton crop gives the industry a total availability of 525,000 tons, 25,000 tons less than last year.
Right now, the next several weeks weather forecast looks good and grower harvest operations should go well. However, with a late crop, everything is compressed and the grower harvesting, the huller operations and walnut plant receiving and production facilities will all be highly challenged.
Market:
Pre-season bookings that started out very heavy in June have now dropped off slightly, however, with the opening prices coming out lower than most expected; new bookings will most likely be going full force by Monday.
Opening prices for Jumbo Hartley’s were set at $1.65, Chandler 70/30 Jumbo/Large at $1.75 and Regular Light Halves and Pieces at $3.85.
By the end of next week, we should know how the market will react to these prices; but my guess is that the new bookings will be very active at these levels. However, contracts for early shipments may bring a premium, especially on in shell Chandlers.
Please let me know if you have any questions or comments.
Kind regards,
Pete
CROP:
NASS’s official 2011 walnut crop “objective” estimate of 485,000 tons was a surprise to many in the industry. It came up 38,000 tons short of the Packers “subjective” forecast of 523,000 tons set in late July. Never the less, it is still the second largest walnut crop in history, 18,000 tons less than the record 2010 crop.
Growing conditions were similar to last year, as the orchards received adequate chilling hours, above average rain and moderate temperatures, all ideal for a good and quality walnut crop. However, again like last year, the crop is at least two weeks late and most packers will not go into production until the last week of September.
NASS’s survey data indicates the average nut set per tree is down 18 percent compared to last year. However, the nut sizes appear to be larger than last year, so hopefully, we will have more large and jumbo walnuts available than we did last season.
Listed below is my guess-a-mate for the major varieties tonnage, which is based on the tree nut count and nut sizes.
Variety 2010 crop 2011 crop Difference
(Tons)
Chandler 209,000 198,000 (11,000)
Hartley 70,000 65,000 (5,000)
Tulare 47,000 52,000 5,000
Howard 55,000 50,000 (5,000)
August walnut shipments were 19,597 tons, about the same as last year. This puts the 2010 crop total year shipments at 506,568 tons, 53,000 tons more than last year. Again, the market was driven by the record bookings from China/Hong Kong, Turkey/U.A.E and Europe. Exports sales accounted for 60 percent of the total shipments with domestic at 40 percent.
The 2010 crop carry-over is expected to be less than 40,000 tons. This coupled with the 485,000 ton crop gives the industry a total availability of 525,000 tons, 25,000 tons less than last year.
Right now, the next several weeks weather forecast looks good and grower harvest operations should go well. However, with a late crop, everything is compressed and the grower harvesting, the huller operations and walnut plant receiving and production facilities will all be highly challenged.
Market:
Pre-season bookings that started out very heavy in June have now dropped off slightly, however, with the opening prices coming out lower than most expected; new bookings will most likely be going full force by Monday.
Opening prices for Jumbo Hartley’s were set at $1.65, Chandler 70/30 Jumbo/Large at $1.75 and Regular Light Halves and Pieces at $3.85.
By the end of next week, we should know how the market will react to these prices; but my guess is that the new bookings will be very active at these levels. However, contracts for early shipments may bring a premium, especially on in shell Chandlers.
Please let me know if you have any questions or comments.
Kind regards,
Pete
Monday, July 11, 2011
Weekly Cashews update
JULY 9, 2011
In Week 28, there was reasonable activity in all market. Trades and offers were in a wide range e.g. W240 from 4.85 to 5.00 / W320 from 4.50 to 4.65 / W450 and SW320 around 4.50 / Splits from 3,90 to 4.00 / Pieces from 3.80 to 3.90 FOB. In general, selling ideas were at higher levels. Buyers were content to buy limited volumes for nearbys - they were looking for discounted offers for forwards but there were no such offers from reliable processors. Indian domestic market was quiet after a month of good activity during which period, prices moved up about 15-20% for different grades. The next round of domestic activity is expected in August.
RCN market was steady – IVC/Ghana in 1350-1450 range, Bissau in 1675-1725 range, Senegal/Gambia around 1550 C&F. Most of the activity was in resale market. Logistic problems continue – delays in loading + longer transit times. It seems that total RCN shipments from West Africa may be more or less the same as last year (but India’s share will be lower). However in terms of kernel yield there will be a significant shortage, specially for white/fancy grades.
Kernel inventories in the main importing countries are low - buyers have been in market every few weeks to buy “as needed” to keep things running. Due to the high prices, they have been buying small volumes for shorter spreads. Delays in RCN arrivals into India & Vietnam has meant there is lower than normal inventory with shellers and so they have not been under pressure in periods of lesser activity. This trend is likely to continue until supply improves significantly or buyers can reduce buying long enough for shellers to feel pressure to sell.
There are rumblings of delays in shipments from some shellers – some of which might turn into defaults or renegotiation of price. Although this will not reduce overall kernel availability for the second half, it will certainly mean supply distortion (and higher prices if defaulted buyers are forced to buy afresh to fulfill their commitments or requirements).
Unless something dramatic happens, there is no reason to expect any change in the current trend of regular steady buying and firm prices for next few months – we would not be surprised if see some more increase in prices in the third quarter (depends primarily on Asian demand and secondly the need for importing countries to keep buying for nearbys).
It is too early to judge – or even guess – how things will develop for 2012 deliveries. If contracting for 2012 is lower volumes over normal periods, we might see prices softening in the last quarter (especially if the Southern crops are good). If the 2012 contracting is for short periods, that will mean the trend of regular buying every few weeks will continue and this will provide a floor to the market.
Except for Almonds, prices of all nuts (including peanuts) are higher than historical averages. This has not affected consumption too much so far although there might have been some shifts within the category for some end products. It will be interesting to see what impact this has on roaster and retailer strategies for 2012 for nuts in general and cashews in particular. This and the outlook for 2011/12 crops will determine what will be a realistic price band for Cashews by end of the year for first half 2012.
We would like to know your comments on market situation, forecast / views on demand & market trend and any interesting news + information.
Regards,
Pankaj N. Sampat
In Week 28, there was reasonable activity in all market. Trades and offers were in a wide range e.g. W240 from 4.85 to 5.00 / W320 from 4.50 to 4.65 / W450 and SW320 around 4.50 / Splits from 3,90 to 4.00 / Pieces from 3.80 to 3.90 FOB. In general, selling ideas were at higher levels. Buyers were content to buy limited volumes for nearbys - they were looking for discounted offers for forwards but there were no such offers from reliable processors. Indian domestic market was quiet after a month of good activity during which period, prices moved up about 15-20% for different grades. The next round of domestic activity is expected in August.
RCN market was steady – IVC/Ghana in 1350-1450 range, Bissau in 1675-1725 range, Senegal/Gambia around 1550 C&F. Most of the activity was in resale market. Logistic problems continue – delays in loading + longer transit times. It seems that total RCN shipments from West Africa may be more or less the same as last year (but India’s share will be lower). However in terms of kernel yield there will be a significant shortage, specially for white/fancy grades.
Kernel inventories in the main importing countries are low - buyers have been in market every few weeks to buy “as needed” to keep things running. Due to the high prices, they have been buying small volumes for shorter spreads. Delays in RCN arrivals into India & Vietnam has meant there is lower than normal inventory with shellers and so they have not been under pressure in periods of lesser activity. This trend is likely to continue until supply improves significantly or buyers can reduce buying long enough for shellers to feel pressure to sell.
There are rumblings of delays in shipments from some shellers – some of which might turn into defaults or renegotiation of price. Although this will not reduce overall kernel availability for the second half, it will certainly mean supply distortion (and higher prices if defaulted buyers are forced to buy afresh to fulfill their commitments or requirements).
Unless something dramatic happens, there is no reason to expect any change in the current trend of regular steady buying and firm prices for next few months – we would not be surprised if see some more increase in prices in the third quarter (depends primarily on Asian demand and secondly the need for importing countries to keep buying for nearbys).
It is too early to judge – or even guess – how things will develop for 2012 deliveries. If contracting for 2012 is lower volumes over normal periods, we might see prices softening in the last quarter (especially if the Southern crops are good). If the 2012 contracting is for short periods, that will mean the trend of regular buying every few weeks will continue and this will provide a floor to the market.
Except for Almonds, prices of all nuts (including peanuts) are higher than historical averages. This has not affected consumption too much so far although there might have been some shifts within the category for some end products. It will be interesting to see what impact this has on roaster and retailer strategies for 2012 for nuts in general and cashews in particular. This and the outlook for 2011/12 crops will determine what will be a realistic price band for Cashews by end of the year for first half 2012.
We would like to know your comments on market situation, forecast / views on demand & market trend and any interesting news + information.
Regards,
Pankaj N. Sampat
Wednesday, July 06, 2011
Monday, June 06, 2011
Weekly Cashews update
JUNE 4, 2011
Week 23 saw further increase in cashew prices – everybody wants to know when and where the juggernaut will stop !!
Business was done for W240 upto 4.65 and W320 upto 4.25 FOB (some processors were able to sell few cents higher). There were bids for Splits upto 3.75 and Pieces upto 3.60 FOB. Trading was well spread amongst various markets and buyers (although volume was not large). Indian domestic market saw more activity in broken grades – prices are about 10% higher than international market. Domestic demand for wholes is expected after few weeks.
RCN market is steady. Lots available in most origins are of lower quality. Goods bought few weeks ago but not shipped are also deteriorating. Container & vessel availability is very tight. As discussed earlier, arrival of nuts into India & Vietnam is going to be late and spread over a longer period than normal. Shipments made early April are just arriving in India & Vietnam (about 3-4 weeks late). First vessel to Brazil is expected to arrive over the weekend.
In a normal situation, after a 35-40% rise in prices, one would expect a correction or softening of prices. But this has not been happening because (1) the rise has been gradual - spread over 12 months (2) it is based on real shortage in supply leading to higher RCN prices (3) increase in processing costs. There have been periodic dips but each dip has been followed by a spike which has taken the price to a newer high. The big question is : When will this trend break ?
At the moment, there is nothing on the horizon to warrant a large, sustained decline in prices. Supply-demand balance will not be restored until there are at least two good crops. Meantime, the month-to-month tightness will continue as RCN arrivals are slow and unlikely to speed – things are not improving in Africa.
Although people expect lower offtake in USA & EU due to higher prices, a large decline in offtake may not happen till end 2011 / early 2012 because the old price deliveries will continue for a few months. Asian markets which had good offtake despite the high prices at end of 2010 may not have much difficulty in accepting the price increase of the last 3 months.
Third quarter of the year will see good demand from India & West Asia due to the festivals. Also, we can expect continuation of the pattern of periodic buying by the traditional markets as most buyers do not have forward cover and will need to buy at regular intervals. Since there is unlikely to be any buildup of RCN inventory with shellers, they will not be under pressure to reduce prices – on the contrary, we would not be surprised if prices went up a bit more in the coming weeks.
End of third quarter / beginning of last quarter will be an interesting period. By that time, we will get a good idea of impact of current price levels on retailers & roasters/repackers strategies for 2012 + spot offtake in Asia and a fair idea of Southern Hemisphere crops. Then, we will know if the trend will change and prices drift to end 2010 levels or whether they will remain around current levels for some more time.
As we said in our previous report, the last 9-12 months have been exceptionally difficult for everyone in the cashew business. It seems that next 6 months will be no different with so many uncertainties & variables. It will take quite some time for things to come back to normal – until then, everyone will have to be alert to adapt to any development (fundamental or external)>
Would appreciate your comments on market situation, demand trends and prospects, your views & forecast of market trend in coming months... and any other news or information
Regards,
Pankaj N. Sampat
Week 23 saw further increase in cashew prices – everybody wants to know when and where the juggernaut will stop !!
Business was done for W240 upto 4.65 and W320 upto 4.25 FOB (some processors were able to sell few cents higher). There were bids for Splits upto 3.75 and Pieces upto 3.60 FOB. Trading was well spread amongst various markets and buyers (although volume was not large). Indian domestic market saw more activity in broken grades – prices are about 10% higher than international market. Domestic demand for wholes is expected after few weeks.
RCN market is steady. Lots available in most origins are of lower quality. Goods bought few weeks ago but not shipped are also deteriorating. Container & vessel availability is very tight. As discussed earlier, arrival of nuts into India & Vietnam is going to be late and spread over a longer period than normal. Shipments made early April are just arriving in India & Vietnam (about 3-4 weeks late). First vessel to Brazil is expected to arrive over the weekend.
In a normal situation, after a 35-40% rise in prices, one would expect a correction or softening of prices. But this has not been happening because (1) the rise has been gradual - spread over 12 months (2) it is based on real shortage in supply leading to higher RCN prices (3) increase in processing costs. There have been periodic dips but each dip has been followed by a spike which has taken the price to a newer high. The big question is : When will this trend break ?
At the moment, there is nothing on the horizon to warrant a large, sustained decline in prices. Supply-demand balance will not be restored until there are at least two good crops. Meantime, the month-to-month tightness will continue as RCN arrivals are slow and unlikely to speed – things are not improving in Africa.
Although people expect lower offtake in USA & EU due to higher prices, a large decline in offtake may not happen till end 2011 / early 2012 because the old price deliveries will continue for a few months. Asian markets which had good offtake despite the high prices at end of 2010 may not have much difficulty in accepting the price increase of the last 3 months.
Third quarter of the year will see good demand from India & West Asia due to the festivals. Also, we can expect continuation of the pattern of periodic buying by the traditional markets as most buyers do not have forward cover and will need to buy at regular intervals. Since there is unlikely to be any buildup of RCN inventory with shellers, they will not be under pressure to reduce prices – on the contrary, we would not be surprised if prices went up a bit more in the coming weeks.
End of third quarter / beginning of last quarter will be an interesting period. By that time, we will get a good idea of impact of current price levels on retailers & roasters/repackers strategies for 2012 + spot offtake in Asia and a fair idea of Southern Hemisphere crops. Then, we will know if the trend will change and prices drift to end 2010 levels or whether they will remain around current levels for some more time.
As we said in our previous report, the last 9-12 months have been exceptionally difficult for everyone in the cashew business. It seems that next 6 months will be no different with so many uncertainties & variables. It will take quite some time for things to come back to normal – until then, everyone will have to be alert to adapt to any development (fundamental or external)>
Would appreciate your comments on market situation, demand trends and prospects, your views & forecast of market trend in coming months... and any other news or information
Regards,
Pankaj N. Sampat
Tuesday, May 17, 2011
Almonds Update
Below are the April ’11 almond industry shipment numbers. Record shipments all the way around! Domestic shipments of 39.9 mm lbs is +7% over last April shipments of 37.3 mm lbs.. Export had a tremendous month of 86.4 mm lbs or +26% ahead of previous April shipments of 68.4 mm lbs. Total industry shipments were 126.4 mm lbs represent a +20% increase over previous year. Of the 18 mm lb increase shipments in export, Western Europe accounted for 11mm lbs..
Momentum is strong as we approach the June ’11 new crop estimate. Please continue to send any inquiries to my office for a reply.
Regards,
Momentum is strong as we approach the June ’11 new crop estimate. Please continue to send any inquiries to my office for a reply.
Regards,
WALNUT MARKET/CROP REPORT
R.L. “Pete” Turner May 16, 2011
CROP:
Again, walnut shipments continue to set monthly records with April shipments reaching 32,764 inshell equivalent tons compared to 29,001 tons last April. This puts the total shipments to date at 416,139 tons, just 86,000 tons short of the entire 2010 crop tonnage (502,000 tons).
Based on my next four month forward forecast, I put the 2010 crop carry-over at 36,000 tons, 5,000 tons less than last year. However, this is based on the CWB official shell out rate of 43.5%, which could be adjusted depending on the final walnut inventories on September 1st.
Turkey/UAR and China/Hong Kong continues to lead the import of California walnuts. China/Hong Kong year to date inshell shipments reached 98.1 million pounds compared to 41.1 million pounds last year. Although Turkey/UAR got a late start, they have imported 69.0 million pounds of inshell, compared to 54.8 at this time last year.
Export shelled shipments have reached 121,358 million pounds, 15.6 million pounds ahead of last year. Domestic shelled shipments were 117,887 pounds, down 11.9 million pounds. The combined total tonnage for shelled products is 239.2 million pounds, 3.7 million ahead of last year.
At this stage, the 2011 walnut crop looks good, however, it appears that some of the 3rd. set on Tulare’s have been damaged hot winds several weeks ago. Not sure if this is the case in other parts of the growing regions, but the four orchards I inspected had this type of damage. The Chandlers looked good as well as the Vina’s and Hartley’s.
Although we have had a great growing season with plenty of water and chill hours, I still believe the crop will be down from last year’s record crop (502,000 tons).
I believe the Harleys tonnage will get back to normal and will be down 10,000 tons from last year (70,000 tons). Chandler tonnage may be up somewhat but there is a good chance that the Tulare’s will be down again.
In any event, it is still too early to make a calculated estimate; but we will have a better idea of the crop size when the packers issue their “subjective” estimate the end of July.
California Walnut Shipments Recap (000)
Month (April) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 3,823 200,440 4,639 282,288 40.1%
Shelled (lbs.) 23,947 235,594 26,487 239,246 0.02%
Total Tons 29,001 336,729 32,764 416,139 13.5%
Market:
Inquiries have slowed down from last month and very little new trading is taken place because of low inventories.
The market for Light Halves and Pieces continue in the $4.30 range with Combo material approximately $0.15 less. In-shell Chandlers are still in the $2.00 area with Tulare’s and Howard’s $0.05- $0.10 less. Not sure of the Jumbo/Large Hartley’s as very little trading has taken place over the past several months. The last price I heard was $1.75.
Let me know if you have any questions or comments.
Kind regards,
Pete
Tulare’s 5/10/11(note burnt ends on the tip’s of the 3rd set)
1st set 2nd set 3rd set
CROP:
Again, walnut shipments continue to set monthly records with April shipments reaching 32,764 inshell equivalent tons compared to 29,001 tons last April. This puts the total shipments to date at 416,139 tons, just 86,000 tons short of the entire 2010 crop tonnage (502,000 tons).
Based on my next four month forward forecast, I put the 2010 crop carry-over at 36,000 tons, 5,000 tons less than last year. However, this is based on the CWB official shell out rate of 43.5%, which could be adjusted depending on the final walnut inventories on September 1st.
Turkey/UAR and China/Hong Kong continues to lead the import of California walnuts. China/Hong Kong year to date inshell shipments reached 98.1 million pounds compared to 41.1 million pounds last year. Although Turkey/UAR got a late start, they have imported 69.0 million pounds of inshell, compared to 54.8 at this time last year.
Export shelled shipments have reached 121,358 million pounds, 15.6 million pounds ahead of last year. Domestic shelled shipments were 117,887 pounds, down 11.9 million pounds. The combined total tonnage for shelled products is 239.2 million pounds, 3.7 million ahead of last year.
At this stage, the 2011 walnut crop looks good, however, it appears that some of the 3rd. set on Tulare’s have been damaged hot winds several weeks ago. Not sure if this is the case in other parts of the growing regions, but the four orchards I inspected had this type of damage. The Chandlers looked good as well as the Vina’s and Hartley’s.
Although we have had a great growing season with plenty of water and chill hours, I still believe the crop will be down from last year’s record crop (502,000 tons).
I believe the Harleys tonnage will get back to normal and will be down 10,000 tons from last year (70,000 tons). Chandler tonnage may be up somewhat but there is a good chance that the Tulare’s will be down again.
In any event, it is still too early to make a calculated estimate; but we will have a better idea of the crop size when the packers issue their “subjective” estimate the end of July.
California Walnut Shipments Recap (000)
Month (April) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 3,823 200,440 4,639 282,288 40.1%
Shelled (lbs.) 23,947 235,594 26,487 239,246 0.02%
Total Tons 29,001 336,729 32,764 416,139 13.5%
Market:
Inquiries have slowed down from last month and very little new trading is taken place because of low inventories.
The market for Light Halves and Pieces continue in the $4.30 range with Combo material approximately $0.15 less. In-shell Chandlers are still in the $2.00 area with Tulare’s and Howard’s $0.05- $0.10 less. Not sure of the Jumbo/Large Hartley’s as very little trading has taken place over the past several months. The last price I heard was $1.75.
Let me know if you have any questions or comments.
Kind regards,
Pete
Tulare’s 5/10/11(note burnt ends on the tip’s of the 3rd set)
1st set 2nd set 3rd set
Monday, May 16, 2011
Weekly Cashews update
MAY 14, 2011
Cashew market was steady with a firm undertone in Week 20. Business was done for W320 in the 3.95-4.00 range from India & Vietnam. There were reports that Vietnam sold Splits around 3.45-3.50 & Pieces from 3.25 to 3.35 FOB. There was a fair amount of buying interest from several directions. Most processors are asking few cents more now and that too for limited quantities.
RCN prices have moved up from the lows seen in April. Shipments from West Africa are picking up but not to the extent expected. It seems that the shipping period will extend several weeks beyond normal. This will definitely affect the kernel yields and will also mean continued tightness of kernel availability for next few months.
In the last 3 weeks, prices moved from 3.80/3.85 to 3.95/4.00 FOB and all markets have been buying for third quarter shipments – this indicates that offtake in Jan-Apr has not been as bad as expected. This will probably mean that there will be regular buying to fulfill delivery commitments. Added to that, there will be buying in case of any new contracts with roasters / retailers.
Indian domestic market which was quiet for about six weeks is showing some signs of activity. Traders normally start buying from mid/late Jun to build up positions before the peak consumption period of Aug-Dec. It will be interesting to see how they operate this year – high prices could reduce carrying capacity but if the demand is there, financing should not be a problem.
Considering this demand side scenario and no possibility of any immediate increase in supply, some people feel that there is room for market to go still higher. Our feeling is that even if the prices do not go up too much, there is very little chance of any price decline in the near future. Market will continue to be supported by regular buying from some market or the other (although there may be periodic dips if some processors need to sell in a hurry to finance RCN purchases - this may not happen if the RCN flow is spread over a longer period).
Apart from any major development in external factors, a change in the cashew market trend will happen only when the supply-demand balance turns easier – this is possible only when supply increases significantly (good crops in all origins) OR if there is a significant move away from cashews in major consuming regions. There are no signs of either at the moment but things could change at the end of the year or beginning of next year. Until there are clear indications of change in either of the fundamental factors, we should expect a steady to firm market.
Regards,
Pankaj N. Sampat
Cashew market was steady with a firm undertone in Week 20. Business was done for W320 in the 3.95-4.00 range from India & Vietnam. There were reports that Vietnam sold Splits around 3.45-3.50 & Pieces from 3.25 to 3.35 FOB. There was a fair amount of buying interest from several directions. Most processors are asking few cents more now and that too for limited quantities.
RCN prices have moved up from the lows seen in April. Shipments from West Africa are picking up but not to the extent expected. It seems that the shipping period will extend several weeks beyond normal. This will definitely affect the kernel yields and will also mean continued tightness of kernel availability for next few months.
In the last 3 weeks, prices moved from 3.80/3.85 to 3.95/4.00 FOB and all markets have been buying for third quarter shipments – this indicates that offtake in Jan-Apr has not been as bad as expected. This will probably mean that there will be regular buying to fulfill delivery commitments. Added to that, there will be buying in case of any new contracts with roasters / retailers.
Indian domestic market which was quiet for about six weeks is showing some signs of activity. Traders normally start buying from mid/late Jun to build up positions before the peak consumption period of Aug-Dec. It will be interesting to see how they operate this year – high prices could reduce carrying capacity but if the demand is there, financing should not be a problem.
Considering this demand side scenario and no possibility of any immediate increase in supply, some people feel that there is room for market to go still higher. Our feeling is that even if the prices do not go up too much, there is very little chance of any price decline in the near future. Market will continue to be supported by regular buying from some market or the other (although there may be periodic dips if some processors need to sell in a hurry to finance RCN purchases - this may not happen if the RCN flow is spread over a longer period).
Apart from any major development in external factors, a change in the cashew market trend will happen only when the supply-demand balance turns easier – this is possible only when supply increases significantly (good crops in all origins) OR if there is a significant move away from cashews in major consuming regions. There are no signs of either at the moment but things could change at the end of the year or beginning of next year. Until there are clear indications of change in either of the fundamental factors, we should expect a steady to firm market.
Regards,
Pankaj N. Sampat
Monday, May 09, 2011
Weekly Cashews update
MAY 7, 2011
There was reasonable activity with all markets in Week 19 with prices moving up a few cents in the latter part of the week. Business was done for W320 from 3.85 to 3.95, W450 & SW320 from 3.75 to 3.80, SW360 from 3.55 to 3.65, Splits around 3.45, Pieces around 3.30 FOB (some processors were able to sell few cents higher). Lower offers are no longer available from both origins. Prices moved up a bit in the Indian domestic market as well.
RCN market continued to see a wide range of prices depending on origin, quality and payment terms. Shipments are expected to move faster in May although this is not certain as there are lot of logistic problems in several ports. Based on cutting test results in origin, kernel yields from most origins are expected to be lower than normal. Vietnam has been more aggressive in West Africa than normal. Coupled with the quantities being picked up by Brazil, this will leave substantially lower quantity for Indian processors.
As discussed earlier, processing in Feb-Apr has been much lower than normal (some processors have been running to less than 50% of capacity). May is also expected to be slow with bulk of RCN arriving in India & Vietnam from mid June. If you take into account lower kernel yields in coming months, it means that the pipeline will continue to be tight in the foreseeable future. Supply will become comfortable only after there is an increase in production. This can happen only if 2011/12 crops are really good – we have had two consecutive bad crop years.
Usage in some markets will definitely be affected due to the high prices but even a double digit decline in some markets will not equal the supply shortage from two bad crops. In Asia, the high prices have not had any impact on usage – in the last quarter of 2010, demand was strong despite prices being at historical high levels.
In the next 3-4 months, we expect good demand in Asia (including West Asia) for the traditional festivals. Also the two big importing regions – USA & EU – are expected to continue their pattern of buying for few months requirement. USD has moved up about 3.50% in two days at the end of this week. If it resumes decline in few weeks (or even remains around current levels) the cost for EU, Australia and some other markets will continue to be around 2010 average – this should reduce the impact of higher prices when contracts are being made for late 2011 & early 2012 deliveries.
There is a view that all this means that prices can go higher before they start coming down (when supply improves or if demand in all markets sees a big decline). Our feeling is that even if prices do not go up much, there is very little chance of any significant decline in prices for next few months (although we may probably see some dips when some processors need to sell to raise cash to pay for RCN purchases).
To sum up, we can expect the market to be steady to firm in the foreseeable future – change in trend & range is possible only when supply becomes comfortable (not possible in the near term) or something unexpected happens on external factors.
Would appreciate your comments on current market situation, your views & forecast of demand + market trend.... and any other news + information
Regards,
Pankaj N. Sampat
There was reasonable activity with all markets in Week 19 with prices moving up a few cents in the latter part of the week. Business was done for W320 from 3.85 to 3.95, W450 & SW320 from 3.75 to 3.80, SW360 from 3.55 to 3.65, Splits around 3.45, Pieces around 3.30 FOB (some processors were able to sell few cents higher). Lower offers are no longer available from both origins. Prices moved up a bit in the Indian domestic market as well.
RCN market continued to see a wide range of prices depending on origin, quality and payment terms. Shipments are expected to move faster in May although this is not certain as there are lot of logistic problems in several ports. Based on cutting test results in origin, kernel yields from most origins are expected to be lower than normal. Vietnam has been more aggressive in West Africa than normal. Coupled with the quantities being picked up by Brazil, this will leave substantially lower quantity for Indian processors.
As discussed earlier, processing in Feb-Apr has been much lower than normal (some processors have been running to less than 50% of capacity). May is also expected to be slow with bulk of RCN arriving in India & Vietnam from mid June. If you take into account lower kernel yields in coming months, it means that the pipeline will continue to be tight in the foreseeable future. Supply will become comfortable only after there is an increase in production. This can happen only if 2011/12 crops are really good – we have had two consecutive bad crop years.
Usage in some markets will definitely be affected due to the high prices but even a double digit decline in some markets will not equal the supply shortage from two bad crops. In Asia, the high prices have not had any impact on usage – in the last quarter of 2010, demand was strong despite prices being at historical high levels.
In the next 3-4 months, we expect good demand in Asia (including West Asia) for the traditional festivals. Also the two big importing regions – USA & EU – are expected to continue their pattern of buying for few months requirement. USD has moved up about 3.50% in two days at the end of this week. If it resumes decline in few weeks (or even remains around current levels) the cost for EU, Australia and some other markets will continue to be around 2010 average – this should reduce the impact of higher prices when contracts are being made for late 2011 & early 2012 deliveries.
There is a view that all this means that prices can go higher before they start coming down (when supply improves or if demand in all markets sees a big decline). Our feeling is that even if prices do not go up much, there is very little chance of any significant decline in prices for next few months (although we may probably see some dips when some processors need to sell to raise cash to pay for RCN purchases).
To sum up, we can expect the market to be steady to firm in the foreseeable future – change in trend & range is possible only when supply becomes comfortable (not possible in the near term) or something unexpected happens on external factors.
Would appreciate your comments on current market situation, your views & forecast of demand + market trend.... and any other news + information
Regards,
Pankaj N. Sampat
2011 CALIFORNIA ALMOND FORECAST
MAY 5, 2011
RESULTS
The initial subjective forecast for the 2011 California almond production is 1.75 billion pounds. This is 6 percent above last year's production of 1.65 billion pounds. Estimated bearing acreage for 2011 is 750 thousand. This forecast is based on a telephone survey conducted April 21 - May 2 from a sample of almond growers. Of the 486 growers sampled, 375 reported. Acreage from these reports accounted for 27 percent of the total bearing acreage.
After a good winter with excellent chilling hours, the 2011 almond crop bloom began. A cold spring lengthened the bloom, causing more overlap between varieties. Cold weather can affect bee activity, but pollination was successful this year and California almond trees set a good crop. Freezing temperatures this spring did affect the northern regions more than the south, but frost damage was not significant. Older plantings suffered some damage from the strong winds that accompanied the spring storms, but overall damage was minimal. Spotty damage from hail was also noted. Low disease and insect pressure have been reported and, with all the precipitation California has seen this winter, lack of water for irrigation is not the problem it was a few years ago. Normal levels of shed have been reported. The crop in general is reported to be good with heavy sets noted on several varieties.
PROCEDURES
Results of the subjective survey are based on opinions obtained from growers. The sample of growers changes from year to year and is grouped by size of operation, so all growers will be represented. Each selected grower is asked to indicate their almond yield per acre from last year and expected yield for the current year.
ACKNOWLEDGMENTS
A special thanks goes to the many almond farm operators and owners who provided information on their operations. The support was outstanding and we appreciate the time they spent completing telephone interviews.
RESULTS
The initial subjective forecast for the 2011 California almond production is 1.75 billion pounds. This is 6 percent above last year's production of 1.65 billion pounds. Estimated bearing acreage for 2011 is 750 thousand. This forecast is based on a telephone survey conducted April 21 - May 2 from a sample of almond growers. Of the 486 growers sampled, 375 reported. Acreage from these reports accounted for 27 percent of the total bearing acreage.
After a good winter with excellent chilling hours, the 2011 almond crop bloom began. A cold spring lengthened the bloom, causing more overlap between varieties. Cold weather can affect bee activity, but pollination was successful this year and California almond trees set a good crop. Freezing temperatures this spring did affect the northern regions more than the south, but frost damage was not significant. Older plantings suffered some damage from the strong winds that accompanied the spring storms, but overall damage was minimal. Spotty damage from hail was also noted. Low disease and insect pressure have been reported and, with all the precipitation California has seen this winter, lack of water for irrigation is not the problem it was a few years ago. Normal levels of shed have been reported. The crop in general is reported to be good with heavy sets noted on several varieties.
PROCEDURES
Results of the subjective survey are based on opinions obtained from growers. The sample of growers changes from year to year and is grouped by size of operation, so all growers will be represented. Each selected grower is asked to indicate their almond yield per acre from last year and expected yield for the current year.
ACKNOWLEDGMENTS
A special thanks goes to the many almond farm operators and owners who provided information on their operations. The support was outstanding and we appreciate the time they spent completing telephone interviews.
Subscribe to:
Posts (Atom)
