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