Weekly Cashews Update Dec 8, 2007
After a month of continuous rise, cashew market is taking a breather and prices dipped a bit – levels traded at the end of this week W240 around 3.00, W320 around 2.65, W450 around 2.50 FOB. There was limited activity – most of it from small & medium packers in India except for the broken grades where Vietnam was more active due to their lower prices.
Brazil continues to be quiet – in the next few weeks, there should be some selling interest from there unless the crop is very very bad. If crop is around 275,000mt as many people expect, they will have a reasonable quantity to sell for FH 2008 shipment as they do not seem to have sold much so far.
Indonesia & East Africa RCN prices did come down a bit this week following quiet kernel market but they are still at disparity considering that outturns are lower and forward kernel sales are not easy.. Processors are buying against earlier sales which were at much lower levels and they will only buy as much as they absolutely need to, unless prices ease further
If nearby short positions are covered, kernel buyers might decide to limit their buying over the next few weeks to cover gaps.. This will bring some sanity to the market but if the demand after holidays is anything like what we saw in Nov, prices may go up again in Jan/Feb.. This will mean higher RCN prices in India, Vietnam, West Africa and consequently keep kernel prices high throughout 2008
Pankaj N. Sampat