Weekly cashews update

Feb 2, 2008
In the last few days, there has been reasonable activity in the cashew market and prices have moved up a few cents. Business done to USA & Europe - W240 around 3.10, W320 around 2.80, W450 around 2.55 FOB. Most of the trades were for nearbys but some business was done for second quarter as well. Vietnam has been quiet as people started going away for holidays
Spot RCN prices are firm and this is likely to continue in Feb till new crops start in Vietnam, India, West Africa from March onwards. Weather conditions in all these origins have been good and if nothing adverse happens in next few weeks, we can expect good crops in all the origins. RCN price trend will depend on how processors operate in the first few weeks of the crop.
Situation is very difficult. If kernel demand is strong in Feb/Mar, processors will be inclined to be aggressive at the beginning the season and this will put upward pressure on prices. And if kernel market does not support the higher levels, there is a risk of processors holding high priced inventory. If kernel demand slows down, processors might be able to keep away from RCN buying for some time and this will help to keep RCN prices at reasonable levels.
Feb/Mar will be crucial months – trend and volume of kernel activity in this period will have significant impact on the cashew market for rest of the year
Would appreciate your views on the market situation - esp. on the demand side and also how you feel market will move in coming weeks / months + any info from origins
Regards
Pankaj N. Sampat
Mumbai India