Monday, December 24, 2007

Weekly Cashews Report

Dec 22, 2007

Market has been quiet in the last two weeks – not much trading from India with USA & Europe but steady business with other markets. Prices have come down few cents from the peaks of November. Levels traded W240 around 2.95, W320 around 2.60, W450 around 2.50 FOB

USA & Europe are showing interest at the lower levels – Indian packers are not keen to sell at these levels but there are reports of some sales from Vietnam for Apr forwards..

No fresh news from Brazil – jury is still out on the size of the crop… if it is as small as some people say, availability from Brazil in 2008 will be much lower than last few years

Rawcashew prices are steady – Tanzania around 1050-1075, Mozambique around 850 C&F. It seems availability from these two origins will be more or less the same as last year but prices are substantially higher & with increased processing costs, the parity is higher than current kernel prices

Going into 2008, the cashew market is at a crossroad. If the NEED of USA & Europe buyers to cover in Jan/Feb is high (like it was in Nov) then prices will move up again and timing will be very wrong. RCN prices in second quarter – when over 70% of the world crop is traded – will be high. If processors are forced to buy RCN at high prices, it will set the floor for kernel prices for Apr/May forwards - it will be interesting to see what impact it will have on buying for second half of the year. On the other hand, if buyers do not NEED to buy too much in the first quarter, prices will remain in a reasonable range and there may not be much movement

First few weeks of 2008 are going to be unusually crucial & critical – volume of activity in this period will have great impact on price (and demand) trend and consequently the fortunes of the cashew sector for rest of the year

Would appreciate your comments on market situation, consumption trends, forecast of demand and market trend.... and any other info / news

Pankaj N. Sampat
Mumbai India