Weekly Cashews Update

OCT 31, 2009


In week 44, cashew market moved up a few cents on W320s. There was a reasonable amount of activity with USA but other markets were quiet. General prices levels were W240 between 2.85 and 2.90, W320 around 2,70 and W450 around 2.40 FOB.

In Tanzania, RCN has started moving to the warehouses and it is expected that first auctions may take place next week. Indicative prices are above US$ 1000 but it is to be seen at what prices business is actually done.

For the last few weeks, cashew market has been moving in a narrow range and there has been steady activity with some market or the other. But there is a general reluctance amongst most sellers & buyers to take any big positions. We feel that the pattern we have seen in the last several months – buying for nearbys – will continue and this will provide a floor to the market. As we said before, the fact that forward contracting has been lower than normal can make the market volatile – any pressure to buy or sell or any change on supply side can move market suddenly & significantly.

Consumption in USA & EU in 2009 has not been as bad as initially expected. Most of the decline was because of lack of product on the shelves rather than an actual move away from nuts. We strongly feel better supply means better consumption because for a snack product a missed sale is a lost sale because very rarely is a snack purchase postponed – the customer buys something else. The decline in USA & EU consumption has been more than compensated by the strong growth in Asia. As affected areas come out from the crisis and roasters & retailers put more product on the shelves, we can reasonably expect better consumption in 2010.

Sales in the current quarter will give buyers an idea of how much they need to buy for FH 2010. If the nearby buying trend continues into first half of 2010 then we may not see any major move in prices for quite some time. If demand in first quarter 2010 is strong, we can expect slightly higher prices through 2010 because RCN demand prices in second quarter will be strong & firm. If demand is weak in first quarter, processors may not be in hurry to buy RCN at beginnng of second quarter which could mean lower RCN prices and consequently, kernel prices may settle few notches lower than current range.

To sum up, we expect a steady market for next 2-3 months and activities in first quarter to determine the broad market range and trend for 2010.

What do you think about market ? Would appreciate your comments on current situation and views on trends for the coming months + any interesting news / info

Regards,
Pankaj N. Sampat