Nut Talk

Weekly Cashews Update

September 1, 2007

Cashew market continued to be quiet with no perceptible change in prices. Levels were 240 around 2.70, 320 around 2.25, 450 around 2.15, SW around 2.10 FOB. Not much business as small packers do not have much to offer and large packers looking for few cents more

As expected, early prices for Indonesia RCN are high but unless kernel market continues to be firm in Sep, processors will not been keen to buy at these levels. Tanzania crop is expected to be good but it is to be seen what Government decides about pricing guidance, taxation, financing to local industry.

Brazil is expecting a good crop but opening prices might be high as processors do not have stock and current kernel prices are higher than last year (however the stronger currency might cap the RCN prices in local currency). If RCN prices stabilise at reasonable levels, USA might be able to cover first quarter needs from Brazil and this would cap the rise in kernel prices

In the next 8-10 weeks, fair amount of contracting will be done in Europe for next year deliveries (in last couple of years we have noticed slight shift – buying has been more spread out, either due to change in buying pattern or because the market has been moving in a narrow range). This time, pricing might be difficult as we are looking at a new, higher range after a long period of trading in the 1.90-2.10 range. The stronger Euro/GBP makes life little easier for buyers in Europe (which is the second biggest cashew importing region)

Overall, feeling is that unless there is a big surge in demand, we will see market stabilizing around current levels – downside is limited
Regards,
Pankaj N. Sampat
Mumbai India