Weekly Cashews Update

MAY 8, 2010

Cashew market was quiet in Week 18. Very limited volumes were traded compared to the activity in previous two weeks (following the pattern of past several months). No change in prices – W240 around 3.15, W320 between 2.90 and 2.95, W450 around 2.75 FOB. Undertone was steady to firm.

RCN market is also steady with a firm undertone. IVC is being traded in 800-830 range depending on the quality. Some early sales of GB have been made around 1025 C&F. The number of players in RCN market has increased this year resulting in a wider price range. At the higher levels, buying interest is limited. Arrivals of WA RCN into India & Vietnam has just started. The fact of a short Benin crop has been factored into the supply situation but there will continue to be some uncertainty about other WA origins until Jun/Jul. Although there may not be big change in overall availability, market will be influenced by rumours and perception of crop prospects. RCN pricing will depend on this and the trend / pattern of kernel activity in next 8 weeks. If kernel market is quiet, processors will be reluctant to buy at higher prices.

There is nothing on the horizon to change view on kernel market prospects for coming weeks & months. The pattern of periodic activity will keep the market swinging in a range. Lower processing & shipments in Apr/May might lead to supply tightness in USA & Europe for some time – hopefully this should ease in third quarter (unless the delays turn into defaults).

If there is no large buying NEED in the next 6-8 weeks, we might see some selling pressure (and lower prices) in the third quarter. But if any significant volume needs to be bought in this period, prices will continue to remain around the higher end of the current range (meaning no respite in RCN prices) and probably move up in third quarter when the Asian (esp. Indian) demand will also be high.

Regards
Pankaj N. Sampat