APR 24, 2010
After a quiet beginning, there was some activity in the market in the second half of week 16. Some quantities were traded to USA (and a little to Europe and other markets as well). Prices moved up a few cents with sales for W240 at 3.05-3.10, W320 at 2.80-2.85, W450 at 2.70-2.75 FOB. Splits / Butts moved up to about 2.35 FOB but offers were scarce. Indian domestic market continued to be quiet.
RCN market is steady. First shipments of WA RCN have started arriving in India. Most of the Benin crop has been sold. IVC is trading around US$ 800. In March, most of the sales were to Vietnam but now both India & Vietnam are buying. There have been some speculative sales by RCN traders for GB but real situation will not be known till mid May. There is a reasonable quantity of RCN still to be traded from IVC + GB (and its smaller neighbours) but it is difficult to judge the price trend.
On the demand side, first quarter offtake seems to have been good (although there are reports of declines in some markets). Outlook for coming months is not clear but there are no reasons to expect any decline. If prices for other nuts do not come down, retailers in USA & Europe might be inclined to put more cashews & mixed nuts/dried fruits on the shelves to meet the nut category demand. Inventories are low (and might be tighter in Jun/Jul due to lower shipments from origin in Apr/May). Some buyers have been buying portion of their forward requirements in the last few weeks, but many buyers continue to buy for nearbys only as they do not see anything on horizon for prices to increase too much.
On the supply side, despite crop concerns in some areas & delays in some others, overall availability for 2010 seems to be comfortable. But due to the uncertainty of RCN prices, processors are reluctant to make any large forward sales. Unless the RCN prices come down in May/Jun, they will not be inclined to take on any big commitments – they will continue to sell small volumes when they have to because the regular demand will keep things moving.
Periodic dips have been opportunities for buyers to cover some volume and periodic spikes have been inducing processors to make some sales. This trend is likely to continue and keep the market within current range until we reach a tipping point – either a big change in RCN prices or a big bunch of buying or selling interest in a short period.
Regards,Pankaj N. Sampat
Monday, April 26, 2010
Monday, April 12, 2010
Weekly cashew update
APR 10, 2010
Despite people being back after long weekend, cashew market continued to be quiet in Week 14. Prices came down a few cents e.g. W240 around 3.05, W320 around 2.85, W450 around 2.65 FOB but there was not much selling interest at the lower levels. Indian domestic market was quiet due to tax changes in two major consuming states but prices were high (Splits equiv to 2.60 and LWP equiv to 2.25 FOB !!)
IVC RCN prices came down by 30-40 dollars a ton – current range is US$ 800-825 C&F. Vietnam buyers seem to have reduced their buying speed and large Indian buyers do not seem to be keen to buy until they see some activity in kernels. It is reported that quality of IVC RCN this year is better (at least what is coming in now).
In the kernel market also, the waiting game continues. Everybody seems to be content with making small purchases & sales when required. Nobody wants to take large positions. This trend is likely to continue for sometime and will result in the periodic bursts of activity (and spike or dip in prices) that we have seen every few weeks in last several months.
Fundamentally, there seems to be a good balance between demand and supply (although some regions may have shortages and kernel shipments in second quarter may be lower). We have always felt that cashew market is more pushed by supply rather than pulled by demand. Unless there is a big change on supply side, there will be no “breakout” from the price range. Due to change in market dynamics – discussed earlier – there is increasing emphasis on short term buying. Consequently, price range is becoming wider & volatility is becoming higher.
Based on available information, we feel that for the rest of the year market will move in a 2.60-2.90 range. In the lower half of the range, selling interest from origins will be limited to nearbys (unless RCN prices come down dramatically in May/June). If this does not happen, there is a reasonable chance of kernel prices being near the higher end of the range in the second half.
Would appreciate your comments on market situation + views on demand & market trend + any other info & news
Regards,Pankaj N. Sampat
Despite people being back after long weekend, cashew market continued to be quiet in Week 14. Prices came down a few cents e.g. W240 around 3.05, W320 around 2.85, W450 around 2.65 FOB but there was not much selling interest at the lower levels. Indian domestic market was quiet due to tax changes in two major consuming states but prices were high (Splits equiv to 2.60 and LWP equiv to 2.25 FOB !!)
IVC RCN prices came down by 30-40 dollars a ton – current range is US$ 800-825 C&F. Vietnam buyers seem to have reduced their buying speed and large Indian buyers do not seem to be keen to buy until they see some activity in kernels. It is reported that quality of IVC RCN this year is better (at least what is coming in now).
In the kernel market also, the waiting game continues. Everybody seems to be content with making small purchases & sales when required. Nobody wants to take large positions. This trend is likely to continue for sometime and will result in the periodic bursts of activity (and spike or dip in prices) that we have seen every few weeks in last several months.
Fundamentally, there seems to be a good balance between demand and supply (although some regions may have shortages and kernel shipments in second quarter may be lower). We have always felt that cashew market is more pushed by supply rather than pulled by demand. Unless there is a big change on supply side, there will be no “breakout” from the price range. Due to change in market dynamics – discussed earlier – there is increasing emphasis on short term buying. Consequently, price range is becoming wider & volatility is becoming higher.
Based on available information, we feel that for the rest of the year market will move in a 2.60-2.90 range. In the lower half of the range, selling interest from origins will be limited to nearbys (unless RCN prices come down dramatically in May/June). If this does not happen, there is a reasonable chance of kernel prices being near the higher end of the range in the second half.
Would appreciate your comments on market situation + views on demand & market trend + any other info & news
Regards,Pankaj N. Sampat
Wednesday, April 07, 2010
No macadamia bumper crop this year
Most affected orchards have shown some recovery from the significant tree and limb loss experienced in May 2009. However hot, dry and dusty conditions around flowering had a negative influence on the 2010 Australian macadamia crop.The industry forecasting model predicts a crop of 41,600 MT of nut in shell (NIS) or an equivalent of 12,220 MT of kernel according to the peak industry body for the Australian macadamia industry, the Australian Macadamia Society (AMS).The crop estimate comes from modelling developed over 7 years by the AMS and the Queensland Department of Employment Economic Development & Innovation. The model works on yield curves developed from historical records and incorporating tree number and age, varieties, climatic data for the growing season and pest and disease incidence.The model has 23 years data from which to estimate the crop and from 2001 to 2007 had an overall average error of 8.2%. With increasingly extreme weather conditions in 2008 and 2009 at the limits of the data set, the average error is now 12.4%The Australian Macadamia Handlers group who represent over 90% of NIS collected from growers in Australia, have stated that they believe the model prediction is at the very top end of expectations and the more likely crop size is 37,500t. This figure is based on surveys of their suppliers and on past delivery patterns and volumes.These figures are compiled by the AMS and the Handlers Group in the interests of providing the market with accurate, credible and timely production information.The AMS and the Handlers Group will update the crop estimates at the end of June and August once actual delivery figures become available in collaboration with participating processors. A final figure for the season will be released in December 2010.The unfavourable conditions at flowering affected the crop in the northern NSW and south east Queensland areas.“The most predominant variety in the industry had variable nut set between localities although some other varieties are not badly affected” said AMS CEO Jolyon Burnett. “The Bundaberg region was not affected by this problem”.Two seasons of short crop have had an impact on worldwide inventories according to Burnett and demand is strong despite a challenging exchange rate.
Weekly cashew update
APR 3, 2010
Week 13 was very quiet in the Cashew market due to short working week plus general reluctance of processors and buyers to take positions. Undertone was steady and stray trades reported without any change in prices i.e. W240 around 3.10, W320 around 2.90, W450 around 2.70 FOB. Indian domestic market – activity and prices – have picked up in the last two weeks.
RCN prices are steady / slightly soft at the end of the week. Arrivals are better in some areas but due to competition among larger number of players in each origin, prices have remained more or less steady. Current levels are around US$ 1000 for Benin and around US$ 850 for IVC.
Reasonable volumes have been sold to USA & Europe in the last few weeks and if there is no fresh buying by roasters, traders may be able to refrain from additional purchases for some time. This might lead to slow drifting of prices (especially if RCN arrivals pick up). Some processors have reduced their selling ideas a few cents this week and others may follow if there is no demand for couple of weeks. But sentiment could change if (a) any large buying interest comes in before the RCN arrivals improve or (b) the RCN prices do not decline despite lack of kernel activity.
On the supply side, there can be no finality about crop size till June. Reports about possible shortage are causing concern amongst processors who do not want to take risk of selling any big volumes. There is definitely a delay in arrivals and this will probably create a squeeze in supplies for few weeks due to reduced shipments in Apr/May. If crops are okay, there will be good volume to be sold for SH 2010 but the pricing will depend on buying time.
On the demand side also, the approach is cautious. Despite some positives – improvement in general economic situation in most countries, higher prices for all nuts, etc – there is some concern about demand & price trend. So, buyers are reluctant to commit large volumes or long spreads. But at some stage, they will have to buy to avoid being caught without adequate product when it is needed.
The cautious approach on both sides coupled with the change in market shares means more activity for spot & nearbys leading to increased volatility. Selling and buying strategies will have to adapt to this change – averaging seems to the best option in uncertain times.
Please let us know your comments on market situation, views on prospects for coming weeks / months and any other info / news
Regards,
Pankaj N. Sampat
Week 13 was very quiet in the Cashew market due to short working week plus general reluctance of processors and buyers to take positions. Undertone was steady and stray trades reported without any change in prices i.e. W240 around 3.10, W320 around 2.90, W450 around 2.70 FOB. Indian domestic market – activity and prices – have picked up in the last two weeks.
RCN prices are steady / slightly soft at the end of the week. Arrivals are better in some areas but due to competition among larger number of players in each origin, prices have remained more or less steady. Current levels are around US$ 1000 for Benin and around US$ 850 for IVC.
Reasonable volumes have been sold to USA & Europe in the last few weeks and if there is no fresh buying by roasters, traders may be able to refrain from additional purchases for some time. This might lead to slow drifting of prices (especially if RCN arrivals pick up). Some processors have reduced their selling ideas a few cents this week and others may follow if there is no demand for couple of weeks. But sentiment could change if (a) any large buying interest comes in before the RCN arrivals improve or (b) the RCN prices do not decline despite lack of kernel activity.
On the supply side, there can be no finality about crop size till June. Reports about possible shortage are causing concern amongst processors who do not want to take risk of selling any big volumes. There is definitely a delay in arrivals and this will probably create a squeeze in supplies for few weeks due to reduced shipments in Apr/May. If crops are okay, there will be good volume to be sold for SH 2010 but the pricing will depend on buying time.
On the demand side also, the approach is cautious. Despite some positives – improvement in general economic situation in most countries, higher prices for all nuts, etc – there is some concern about demand & price trend. So, buyers are reluctant to commit large volumes or long spreads. But at some stage, they will have to buy to avoid being caught without adequate product when it is needed.
The cautious approach on both sides coupled with the change in market shares means more activity for spot & nearbys leading to increased volatility. Selling and buying strategies will have to adapt to this change – averaging seems to the best option in uncertain times.
Please let us know your comments on market situation, views on prospects for coming weeks / months and any other info / news
Regards,
Pankaj N. Sampat
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