Monday, March 01, 2010

weekly Cashew Update

FEB 27, 2010

There was some activity in the Cashew market in week 8. Prices were almost the same i.e. W240 between 2.85 and 2.90, W320 between 2.55 and 2.60 and W450 between 2.40 and 2.45 FOB. Off markets and Indian domestic market were quiet – there has been some decline in prices for brokens in the Indian market.

No fresh news on RCN front – Quotes for WA are around 875 C&F for Benin, 725 C&F for IVC, 675-700 C&F for Nigeria for April shipment. As reported earlier, business for Mar / FH Apr shipment was done at higher levels few weeks ago. Until physical movements start, both sellers & buyers not keen to commit additional quantities. For the time being, everything points to normal supplies in all origins.

On the kernel side, there seems to be reasonable (not very big) interest at current levels for Mar-May shipments. It is quite possible that buyers may drop their buying ideas if volume of offers increases but large processors in both origins are not offering and this is providing a floor to the market for the time being.

Some traders are offering SH 2010 deliveries at lower levels - although no trades are reported, this could induce some more selling interest at current levels for nearbys. Buyers are content to buy small volumes at each level as they do not see any reason to take large forward cover. This trend is likely to continue unless there is a big change in demand trend or a significant change in supply situation (actual or perceived).

We continue to feel that market is very delicately poised – it could move either way, depending on the timing of the next round of big buying (especially because very little business has been done so far for second half shipments). Reduced liquidity means more volatility – slight increase in selling or buying interest can tip the market.

If the processors decide to sell for SH before buying RCN, we could see prices come off from current levels (for kernels as well as RCN). On the other hand, if buyers need to buy for SH in the next 4-6 weeks, we will see market stabilising around current levels. This would keep RCN prices steady and could lead to higher kernel prices in the second half.

In the short term, market has a soft bias due to slow buying + impending new crops. In the medium term, there is potential for some increase in prices in the latter part of the year if demand grows with lower prices. External factors will continue to have increasing impact on demand and market trend.

Please let me know your comments on current situation, views & forecast of demand + market trend and any other news & info

Regards,Pankaj N. Sampat

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