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


sreejith said...

as u said cashew kernel market is not much active , especially US,UK. Offers are coming at the prices u mentioned.
Raw cashew seems to be active now. lot of IVC , Benin cargoes are coming and reports says local market ( raw cashew ) prices are coming down.
this year aslo mangalore seems to be the good buyers for Benin, which is traded around 940/mt cnf vizag.
IVC seems to be steady and market offrs are coming at 810-820$ for may shipments. but fear is that now some of highseas sales are hapening at around 775-780 levels by small traders which can cause market to come little down.

palmcop said...

This can't succeed in reality, that is what I think.