Weekly cashews update

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