Monday, May 19, 2008

Weekly Cashews Update

May 17, 2008

Cashew prices moved up a few cents this week due to lack of offers. Some business was done at the higher prices e.g. W240 around 3.25, W320 around 3.05 FOB, W450 around 2.85 FOB for shipments upto Oct.

From India, limited quantities are available for nearbys and due to the high RCN prices, there is very little interest to sell forward positions. Business with Vietnam is for nearbys only as buyers willing to buy forwards from very few processors there.

Normally, forward trading should be at peak during this main harvest period but due to the high prices & uncertainty everybody wants to play it safe PLUS number of forward players is limited due to the overhang of recent problem

Until inventory levels and supply lines come back close to normal levels, it will be very difficult to know the real usage & demand trends. Increase in all costs and general increase in prices of all commodities will also have some impact on the Nuts sector - price as well as demand. This means that taking forward positions will continue to be difficult for both sellers and buyers

Guinea Bissau RCN prices have moved up but these levels cannot be supported unless kernel prices move up as well. If kernel market softens or demand slows down, traders will find it difficult to realise the high prices being negotiated now. Despite a good crop, shipments from IVC continue to be slow and there are reports that yields of goods now arriving in Abidjan are quite low

We continue to feel that short & medium trend will remain firm and this could well spillover into early 2009 (the last time prices crossed 3.00 – in 1999 - they remained around that level for about seven months from May to Dec and started declining from Jan 2000 with the big decline happening only in 2nd and 3rd quarter of 2000)

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

Pankaj N. Sampat

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