Monday, March 08, 2010

Weekly Cashews Update

MAR 6, 2010

There was good activity in the Cashew market in week 9 – mainly for W320 for which prices moved up a few cents to 2.60-2.65 FOB. Reasonable volume was sold for Mar-Jun shipments to European traders (and some to USA as well). Prices for other grades were unchanged i.e. W240 between 2.85-2.90 and W450 between 2.40-2.45 FOB. Vietnam has been selling few cents lower than India. Large processors in both origins are not offering.

Offers for WA RCN were little higher than last couple of weeks but no new business is being done. So far, it seems that crops in all origins will be normal to good. Physical movements will start next week and after that we may see some new trades.

It is to be seen whether the demand for kernels continues to remain strong in the coming weeks – if so, the prices will remain steady. Otherwise they will drift down to the 2.50 level. If prices dip below 2.50, we will see some more covering by traders and probably some new buying by the roasters. We do not see any reason for big decline in kernel prices unless RCN prices come down substantially during Mar/Apr.

As we have been saying for some time, the timing of the next big buying by roasters in Europe & USA needs to be watched closely – if it happens in Mar/Apr, prices will move up a bit. If it gets delayed to May/Jun, prices may drift a little lower from current levels.

Given the present fundamentals, it would be reasonable to expect a floor of 2.40 and a top of 2.80 for W320 for most of 2010. This is a wide range - we do not expect prices to remain at either end for too long (unless something dramatic happens) and it would probably be a good idea for both sellers and buyers to cover portions of their positions at all levels, rather than waiting for the top or the bottom.

For the next few weeks, we expect market to be volatile with periodic bursts of activity when prices will rise or dip depending on kernel buying/selling interest and RCN news & rumours.

Please let me know your views on market situation, demand and price trends and any other information / news.

Regards,Pankaj N. Sampat

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