Nut Talk

Cashews Weekly update October 29, 2007

Although activity last week was limited, cashew market undertone was firm with very few offers – W240 around 2.70, W320 around 2.30, W450 around 2.15 FOB. Some business has been done for nearbys at these levels from India and Vietnam.

Brazil crop may not be as big as initially reported – it may only be same or slightly higher than last year. RCN prices are high & processors are finding it difficult to sell at current levels with a very strong currency

Rawcashew market is quiet – offers from Indonesia are very high and Tanzania stalemate continues. If not resolved quickly, this might affect processing in first quarter of 2008

In general, prices for all nuts are firm – some due to short crops and some due to good marketing. Growth in consumption is steady but not spectacular. As far as cashews are concerned, excess inventories have been used up – supply & demand seem to be well balanced.

Processors are reluctant to take large positions for 2008. If USD continues to be weak in first half 2008, this could have significant impact on WA RCN pricing. Buyers are still not prepared to pay premium for forwards as they feel that there is nothing on demand & supply front to warrant a big jump in prices

For next few weeks (maybe months), present trend of nearby activity and firmness can be expected to continue. Change in perception can only happen in Mar-May when three major regions will be harvesting. Exchange rate at that time and ability of processors & kernel traders and users to manage positions in the meantime will determine whether there will be a big change in price range

Regards,
Pankaj N. Sampat
Mumbai India