JAN 30, 2010
Week 4 saw the cashew market stabilising – there seems to be a fair amount of interest for W320 for Feb-Apr shipments around 2.70 FOB. Trades during the week have been in a wide range – W240 from 2.90 to 3.00, W320 from 2.70 to 2.80, W450 from 2.50 to 2.55 FOB. Vietnam has been selling at lower levels than India & Brazil (not clear whether it is to have some sales on books before holidays & new crop or in expectation of a good crop & lower RCN prices after the holidays – or both !)
In the last six weeks, W320 came down by 25-30 cents, W240 came down by 10-15 cents and W450 came down by 10-15 cents.. In the last three months, W320 moved up from 2.70-75 to 3.00 and came down to 2.70-2.80 FOB. This volatility has given reasonable trading opportunities but it has not been much of much use to processors or endusers. There has been no apparent reason for this see-saw except the jump in RCN prices in November
SO FAR, all indications are that upcoming crops will be normal. Some trades have been reported for Benin RCN from 1000 to 925 C&F and for Nigeria around 750 C&F. We feel these are speculative trades and do not reflect prices that will actually be paid. There will be a lot of “information” and speculation about crop prospects in Feb-Apr and this will influence kernel price movements.
Offtake in the importing countries in the last quarter seems to have been normal – no big increases or declines. In the next few weeks, we will see whether roasters need to buy more for first half or not. Also, whether they will start buying for second half now or be able to wait till Apr/May when clearer picture of upcoming crops & RCN prices is available.
Overall, everything points to a steady market in a narrow range (except for volatility due to crop “news” + lower volumes of forward positions). No big moves are expected BUT markets tend to move in a way that nobody expects.
Caution is recommended when markets are as quiet as they are now (and there are so many uncertainties – raw material pricing, timing of finished product sales, currency movements)
Please advise your views on market situation, forecast of trend / prospects / activity in coming weeks and any other information + news
Pankaj N. Sampat