SEP 10, 2011
Week 37 was the sixth consecutive quiet week in the Cashew market. Despite this quietness and sales at lower levels by some processors in Vietnam, most processors in India (and many in Vietnam) are not willing to reduce their prices. Business has been reported from Vietnam for W240 around 4.75 and W320 around 4.40 FOB. Prices from India for W240 around 4.85-4.90 and W320 from 4.55 to 4.60 FOB – stray business was done by some processors. This wide range of prices is distorting the market and making buyers wary of taking on large positions although they are picking up the lower offers.
In the Indian domestic market, there was limited business by a few processors but in general, market continued to be quiet. Wholesalers and stockists seem to be waiting for signals of retail offtake at the beginning of the peak consumption season before taking on additional volume.
On the RCN side, there are some stocks in Guinea Bissau but the stockists are holding on for high prices. The upcoming Southern crops are expected to be normal – although there are reports that adverse weather may affect the crop in some regions of Indonesia. Current price in Indonesia is very high – approx US$ 2000. The next six weeks will provide a reasonable idea of the crop prospects and prices in Indonesia & Brazil. Tanzania prices will be known by end Oct/early Nov. Mozambique RCN prices will not be known until Dec.
The market is in stalemate mode. Activity in the kernel market in the next 6-8 weeks will determine what direction the market will take.
If the kernel demand before end of Oct – either India/Asia or USA/Europe – is good, prices will remain in the current range. If demand in BOTH regions is normal to good, prices could move up a bit. In either case, RCN prices will not decline (since availability till next March is limited). Consequently, a change in price trend will be possible only in second quarter of 2012 provided Northern crops are good and supply becomes comfortable.
On the other hand, if kernel demand in both regions is slow for the next six weeks, prices could start drifting lower from end of Oct – more so if the Brazil crop is good. If this happens, shellers will be slow in buying, leading to lower RCN prices. And that will mean the year will end with higher than normal inventory – most probably in the form of RCN – with a potential of further downward pressure on prices if the 2012 Northern crops are good or even normal.
It is impossible to judge what will happen in the medium term, especially in the current situation when there are so many economical and financial uncertainties in USA & Europe. But the general feeling is that demand in Sep/Oct will not be so low as to trigger a price decline immediately. Indian demand may not be strong but since India is predominantly a spot market, there will certainly be steady buying during the peak consumption period upto end Dec / early Jan. Following the trend of short period buying, USA/Europe will also have to buy some volume in the next 6-8 weeks for late 2011 / early 2012 shipments. These two demand side factors will support the market and trend will change only if 2012 crops are normal to good. Only a dramatic fall in kernel buying in Sep-Nov could lead to lower prices before that – and that is possible only if there are some big negative developments in USA and Europe economies / financial markets.
Would appreciate your comments on current market situation, your views on trends & prospects and any specific news or information
Regards,
Pankaj N. Sampat
Monday, September 12, 2011
Walnut Market Update September 11, 2011
R.L. “Pete” Turner
CROP:
NASS’s official 2011 walnut crop “objective” estimate of 485,000 tons was a surprise to many in the industry. It came up 38,000 tons short of the Packers “subjective” forecast of 523,000 tons set in late July. Never the less, it is still the second largest walnut crop in history, 18,000 tons less than the record 2010 crop.
Growing conditions were similar to last year, as the orchards received adequate chilling hours, above average rain and moderate temperatures, all ideal for a good and quality walnut crop. However, again like last year, the crop is at least two weeks late and most packers will not go into production until the last week of September.
NASS’s survey data indicates the average nut set per tree is down 18 percent compared to last year. However, the nut sizes appear to be larger than last year, so hopefully, we will have more large and jumbo walnuts available than we did last season.
Listed below is my guess-a-mate for the major varieties tonnage, which is based on the tree nut count and nut sizes.
Variety 2010 crop 2011 crop Difference
(Tons)
Chandler 209,000 198,000 (11,000)
Hartley 70,000 65,000 (5,000)
Tulare 47,000 52,000 5,000
Howard 55,000 50,000 (5,000)
August walnut shipments were 19,597 tons, about the same as last year. This puts the 2010 crop total year shipments at 506,568 tons, 53,000 tons more than last year. Again, the market was driven by the record bookings from China/Hong Kong, Turkey/U.A.E and Europe. Exports sales accounted for 60 percent of the total shipments with domestic at 40 percent.
The 2010 crop carry-over is expected to be less than 40,000 tons. This coupled with the 485,000 ton crop gives the industry a total availability of 525,000 tons, 25,000 tons less than last year.
Right now, the next several weeks weather forecast looks good and grower harvest operations should go well. However, with a late crop, everything is compressed and the grower harvesting, the huller operations and walnut plant receiving and production facilities will all be highly challenged.
Market:
Pre-season bookings that started out very heavy in June have now dropped off slightly, however, with the opening prices coming out lower than most expected; new bookings will most likely be going full force by Monday.
Opening prices for Jumbo Hartley’s were set at $1.65, Chandler 70/30 Jumbo/Large at $1.75 and Regular Light Halves and Pieces at $3.85.
By the end of next week, we should know how the market will react to these prices; but my guess is that the new bookings will be very active at these levels. However, contracts for early shipments may bring a premium, especially on in shell Chandlers.
Please let me know if you have any questions or comments.
Kind regards,
Pete
CROP:
NASS’s official 2011 walnut crop “objective” estimate of 485,000 tons was a surprise to many in the industry. It came up 38,000 tons short of the Packers “subjective” forecast of 523,000 tons set in late July. Never the less, it is still the second largest walnut crop in history, 18,000 tons less than the record 2010 crop.
Growing conditions were similar to last year, as the orchards received adequate chilling hours, above average rain and moderate temperatures, all ideal for a good and quality walnut crop. However, again like last year, the crop is at least two weeks late and most packers will not go into production until the last week of September.
NASS’s survey data indicates the average nut set per tree is down 18 percent compared to last year. However, the nut sizes appear to be larger than last year, so hopefully, we will have more large and jumbo walnuts available than we did last season.
Listed below is my guess-a-mate for the major varieties tonnage, which is based on the tree nut count and nut sizes.
Variety 2010 crop 2011 crop Difference
(Tons)
Chandler 209,000 198,000 (11,000)
Hartley 70,000 65,000 (5,000)
Tulare 47,000 52,000 5,000
Howard 55,000 50,000 (5,000)
August walnut shipments were 19,597 tons, about the same as last year. This puts the 2010 crop total year shipments at 506,568 tons, 53,000 tons more than last year. Again, the market was driven by the record bookings from China/Hong Kong, Turkey/U.A.E and Europe. Exports sales accounted for 60 percent of the total shipments with domestic at 40 percent.
The 2010 crop carry-over is expected to be less than 40,000 tons. This coupled with the 485,000 ton crop gives the industry a total availability of 525,000 tons, 25,000 tons less than last year.
Right now, the next several weeks weather forecast looks good and grower harvest operations should go well. However, with a late crop, everything is compressed and the grower harvesting, the huller operations and walnut plant receiving and production facilities will all be highly challenged.
Market:
Pre-season bookings that started out very heavy in June have now dropped off slightly, however, with the opening prices coming out lower than most expected; new bookings will most likely be going full force by Monday.
Opening prices for Jumbo Hartley’s were set at $1.65, Chandler 70/30 Jumbo/Large at $1.75 and Regular Light Halves and Pieces at $3.85.
By the end of next week, we should know how the market will react to these prices; but my guess is that the new bookings will be very active at these levels. However, contracts for early shipments may bring a premium, especially on in shell Chandlers.
Please let me know if you have any questions or comments.
Kind regards,
Pete
Monday, July 11, 2011
Weekly Cashews update
JULY 9, 2011
In Week 28, there was reasonable activity in all market. Trades and offers were in a wide range e.g. W240 from 4.85 to 5.00 / W320 from 4.50 to 4.65 / W450 and SW320 around 4.50 / Splits from 3,90 to 4.00 / Pieces from 3.80 to 3.90 FOB. In general, selling ideas were at higher levels. Buyers were content to buy limited volumes for nearbys - they were looking for discounted offers for forwards but there were no such offers from reliable processors. Indian domestic market was quiet after a month of good activity during which period, prices moved up about 15-20% for different grades. The next round of domestic activity is expected in August.
RCN market was steady – IVC/Ghana in 1350-1450 range, Bissau in 1675-1725 range, Senegal/Gambia around 1550 C&F. Most of the activity was in resale market. Logistic problems continue – delays in loading + longer transit times. It seems that total RCN shipments from West Africa may be more or less the same as last year (but India’s share will be lower). However in terms of kernel yield there will be a significant shortage, specially for white/fancy grades.
Kernel inventories in the main importing countries are low - buyers have been in market every few weeks to buy “as needed” to keep things running. Due to the high prices, they have been buying small volumes for shorter spreads. Delays in RCN arrivals into India & Vietnam has meant there is lower than normal inventory with shellers and so they have not been under pressure in periods of lesser activity. This trend is likely to continue until supply improves significantly or buyers can reduce buying long enough for shellers to feel pressure to sell.
There are rumblings of delays in shipments from some shellers – some of which might turn into defaults or renegotiation of price. Although this will not reduce overall kernel availability for the second half, it will certainly mean supply distortion (and higher prices if defaulted buyers are forced to buy afresh to fulfill their commitments or requirements).
Unless something dramatic happens, there is no reason to expect any change in the current trend of regular steady buying and firm prices for next few months – we would not be surprised if see some more increase in prices in the third quarter (depends primarily on Asian demand and secondly the need for importing countries to keep buying for nearbys).
It is too early to judge – or even guess – how things will develop for 2012 deliveries. If contracting for 2012 is lower volumes over normal periods, we might see prices softening in the last quarter (especially if the Southern crops are good). If the 2012 contracting is for short periods, that will mean the trend of regular buying every few weeks will continue and this will provide a floor to the market.
Except for Almonds, prices of all nuts (including peanuts) are higher than historical averages. This has not affected consumption too much so far although there might have been some shifts within the category for some end products. It will be interesting to see what impact this has on roaster and retailer strategies for 2012 for nuts in general and cashews in particular. This and the outlook for 2011/12 crops will determine what will be a realistic price band for Cashews by end of the year for first half 2012.
We would like to know your comments on market situation, forecast / views on demand & market trend and any interesting news + information.
Regards,
Pankaj N. Sampat
In Week 28, there was reasonable activity in all market. Trades and offers were in a wide range e.g. W240 from 4.85 to 5.00 / W320 from 4.50 to 4.65 / W450 and SW320 around 4.50 / Splits from 3,90 to 4.00 / Pieces from 3.80 to 3.90 FOB. In general, selling ideas were at higher levels. Buyers were content to buy limited volumes for nearbys - they were looking for discounted offers for forwards but there were no such offers from reliable processors. Indian domestic market was quiet after a month of good activity during which period, prices moved up about 15-20% for different grades. The next round of domestic activity is expected in August.
RCN market was steady – IVC/Ghana in 1350-1450 range, Bissau in 1675-1725 range, Senegal/Gambia around 1550 C&F. Most of the activity was in resale market. Logistic problems continue – delays in loading + longer transit times. It seems that total RCN shipments from West Africa may be more or less the same as last year (but India’s share will be lower). However in terms of kernel yield there will be a significant shortage, specially for white/fancy grades.
Kernel inventories in the main importing countries are low - buyers have been in market every few weeks to buy “as needed” to keep things running. Due to the high prices, they have been buying small volumes for shorter spreads. Delays in RCN arrivals into India & Vietnam has meant there is lower than normal inventory with shellers and so they have not been under pressure in periods of lesser activity. This trend is likely to continue until supply improves significantly or buyers can reduce buying long enough for shellers to feel pressure to sell.
There are rumblings of delays in shipments from some shellers – some of which might turn into defaults or renegotiation of price. Although this will not reduce overall kernel availability for the second half, it will certainly mean supply distortion (and higher prices if defaulted buyers are forced to buy afresh to fulfill their commitments or requirements).
Unless something dramatic happens, there is no reason to expect any change in the current trend of regular steady buying and firm prices for next few months – we would not be surprised if see some more increase in prices in the third quarter (depends primarily on Asian demand and secondly the need for importing countries to keep buying for nearbys).
It is too early to judge – or even guess – how things will develop for 2012 deliveries. If contracting for 2012 is lower volumes over normal periods, we might see prices softening in the last quarter (especially if the Southern crops are good). If the 2012 contracting is for short periods, that will mean the trend of regular buying every few weeks will continue and this will provide a floor to the market.
Except for Almonds, prices of all nuts (including peanuts) are higher than historical averages. This has not affected consumption too much so far although there might have been some shifts within the category for some end products. It will be interesting to see what impact this has on roaster and retailer strategies for 2012 for nuts in general and cashews in particular. This and the outlook for 2011/12 crops will determine what will be a realistic price band for Cashews by end of the year for first half 2012.
We would like to know your comments on market situation, forecast / views on demand & market trend and any interesting news + information.
Regards,
Pankaj N. Sampat
Wednesday, July 06, 2011
Monday, June 06, 2011
Weekly Cashews update
JUNE 4, 2011
Week 23 saw further increase in cashew prices – everybody wants to know when and where the juggernaut will stop !!
Business was done for W240 upto 4.65 and W320 upto 4.25 FOB (some processors were able to sell few cents higher). There were bids for Splits upto 3.75 and Pieces upto 3.60 FOB. Trading was well spread amongst various markets and buyers (although volume was not large). Indian domestic market saw more activity in broken grades – prices are about 10% higher than international market. Domestic demand for wholes is expected after few weeks.
RCN market is steady. Lots available in most origins are of lower quality. Goods bought few weeks ago but not shipped are also deteriorating. Container & vessel availability is very tight. As discussed earlier, arrival of nuts into India & Vietnam is going to be late and spread over a longer period than normal. Shipments made early April are just arriving in India & Vietnam (about 3-4 weeks late). First vessel to Brazil is expected to arrive over the weekend.
In a normal situation, after a 35-40% rise in prices, one would expect a correction or softening of prices. But this has not been happening because (1) the rise has been gradual - spread over 12 months (2) it is based on real shortage in supply leading to higher RCN prices (3) increase in processing costs. There have been periodic dips but each dip has been followed by a spike which has taken the price to a newer high. The big question is : When will this trend break ?
At the moment, there is nothing on the horizon to warrant a large, sustained decline in prices. Supply-demand balance will not be restored until there are at least two good crops. Meantime, the month-to-month tightness will continue as RCN arrivals are slow and unlikely to speed – things are not improving in Africa.
Although people expect lower offtake in USA & EU due to higher prices, a large decline in offtake may not happen till end 2011 / early 2012 because the old price deliveries will continue for a few months. Asian markets which had good offtake despite the high prices at end of 2010 may not have much difficulty in accepting the price increase of the last 3 months.
Third quarter of the year will see good demand from India & West Asia due to the festivals. Also, we can expect continuation of the pattern of periodic buying by the traditional markets as most buyers do not have forward cover and will need to buy at regular intervals. Since there is unlikely to be any buildup of RCN inventory with shellers, they will not be under pressure to reduce prices – on the contrary, we would not be surprised if prices went up a bit more in the coming weeks.
End of third quarter / beginning of last quarter will be an interesting period. By that time, we will get a good idea of impact of current price levels on retailers & roasters/repackers strategies for 2012 + spot offtake in Asia and a fair idea of Southern Hemisphere crops. Then, we will know if the trend will change and prices drift to end 2010 levels or whether they will remain around current levels for some more time.
As we said in our previous report, the last 9-12 months have been exceptionally difficult for everyone in the cashew business. It seems that next 6 months will be no different with so many uncertainties & variables. It will take quite some time for things to come back to normal – until then, everyone will have to be alert to adapt to any development (fundamental or external)>
Would appreciate your comments on market situation, demand trends and prospects, your views & forecast of market trend in coming months... and any other news or information
Regards,
Pankaj N. Sampat
Week 23 saw further increase in cashew prices – everybody wants to know when and where the juggernaut will stop !!
Business was done for W240 upto 4.65 and W320 upto 4.25 FOB (some processors were able to sell few cents higher). There were bids for Splits upto 3.75 and Pieces upto 3.60 FOB. Trading was well spread amongst various markets and buyers (although volume was not large). Indian domestic market saw more activity in broken grades – prices are about 10% higher than international market. Domestic demand for wholes is expected after few weeks.
RCN market is steady. Lots available in most origins are of lower quality. Goods bought few weeks ago but not shipped are also deteriorating. Container & vessel availability is very tight. As discussed earlier, arrival of nuts into India & Vietnam is going to be late and spread over a longer period than normal. Shipments made early April are just arriving in India & Vietnam (about 3-4 weeks late). First vessel to Brazil is expected to arrive over the weekend.
In a normal situation, after a 35-40% rise in prices, one would expect a correction or softening of prices. But this has not been happening because (1) the rise has been gradual - spread over 12 months (2) it is based on real shortage in supply leading to higher RCN prices (3) increase in processing costs. There have been periodic dips but each dip has been followed by a spike which has taken the price to a newer high. The big question is : When will this trend break ?
At the moment, there is nothing on the horizon to warrant a large, sustained decline in prices. Supply-demand balance will not be restored until there are at least two good crops. Meantime, the month-to-month tightness will continue as RCN arrivals are slow and unlikely to speed – things are not improving in Africa.
Although people expect lower offtake in USA & EU due to higher prices, a large decline in offtake may not happen till end 2011 / early 2012 because the old price deliveries will continue for a few months. Asian markets which had good offtake despite the high prices at end of 2010 may not have much difficulty in accepting the price increase of the last 3 months.
Third quarter of the year will see good demand from India & West Asia due to the festivals. Also, we can expect continuation of the pattern of periodic buying by the traditional markets as most buyers do not have forward cover and will need to buy at regular intervals. Since there is unlikely to be any buildup of RCN inventory with shellers, they will not be under pressure to reduce prices – on the contrary, we would not be surprised if prices went up a bit more in the coming weeks.
End of third quarter / beginning of last quarter will be an interesting period. By that time, we will get a good idea of impact of current price levels on retailers & roasters/repackers strategies for 2012 + spot offtake in Asia and a fair idea of Southern Hemisphere crops. Then, we will know if the trend will change and prices drift to end 2010 levels or whether they will remain around current levels for some more time.
As we said in our previous report, the last 9-12 months have been exceptionally difficult for everyone in the cashew business. It seems that next 6 months will be no different with so many uncertainties & variables. It will take quite some time for things to come back to normal – until then, everyone will have to be alert to adapt to any development (fundamental or external)>
Would appreciate your comments on market situation, demand trends and prospects, your views & forecast of market trend in coming months... and any other news or information
Regards,
Pankaj N. Sampat
Tuesday, May 17, 2011
Almonds Update
Below are the April ’11 almond industry shipment numbers. Record shipments all the way around! Domestic shipments of 39.9 mm lbs is +7% over last April shipments of 37.3 mm lbs.. Export had a tremendous month of 86.4 mm lbs or +26% ahead of previous April shipments of 68.4 mm lbs. Total industry shipments were 126.4 mm lbs represent a +20% increase over previous year. Of the 18 mm lb increase shipments in export, Western Europe accounted for 11mm lbs..
Momentum is strong as we approach the June ’11 new crop estimate. Please continue to send any inquiries to my office for a reply.
Regards,
Momentum is strong as we approach the June ’11 new crop estimate. Please continue to send any inquiries to my office for a reply.
Regards,
WALNUT MARKET/CROP REPORT
R.L. “Pete” Turner May 16, 2011
CROP:
Again, walnut shipments continue to set monthly records with April shipments reaching 32,764 inshell equivalent tons compared to 29,001 tons last April. This puts the total shipments to date at 416,139 tons, just 86,000 tons short of the entire 2010 crop tonnage (502,000 tons).
Based on my next four month forward forecast, I put the 2010 crop carry-over at 36,000 tons, 5,000 tons less than last year. However, this is based on the CWB official shell out rate of 43.5%, which could be adjusted depending on the final walnut inventories on September 1st.
Turkey/UAR and China/Hong Kong continues to lead the import of California walnuts. China/Hong Kong year to date inshell shipments reached 98.1 million pounds compared to 41.1 million pounds last year. Although Turkey/UAR got a late start, they have imported 69.0 million pounds of inshell, compared to 54.8 at this time last year.
Export shelled shipments have reached 121,358 million pounds, 15.6 million pounds ahead of last year. Domestic shelled shipments were 117,887 pounds, down 11.9 million pounds. The combined total tonnage for shelled products is 239.2 million pounds, 3.7 million ahead of last year.
At this stage, the 2011 walnut crop looks good, however, it appears that some of the 3rd. set on Tulare’s have been damaged hot winds several weeks ago. Not sure if this is the case in other parts of the growing regions, but the four orchards I inspected had this type of damage. The Chandlers looked good as well as the Vina’s and Hartley’s.
Although we have had a great growing season with plenty of water and chill hours, I still believe the crop will be down from last year’s record crop (502,000 tons).
I believe the Harleys tonnage will get back to normal and will be down 10,000 tons from last year (70,000 tons). Chandler tonnage may be up somewhat but there is a good chance that the Tulare’s will be down again.
In any event, it is still too early to make a calculated estimate; but we will have a better idea of the crop size when the packers issue their “subjective” estimate the end of July.
California Walnut Shipments Recap (000)
Month (April) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 3,823 200,440 4,639 282,288 40.1%
Shelled (lbs.) 23,947 235,594 26,487 239,246 0.02%
Total Tons 29,001 336,729 32,764 416,139 13.5%
Market:
Inquiries have slowed down from last month and very little new trading is taken place because of low inventories.
The market for Light Halves and Pieces continue in the $4.30 range with Combo material approximately $0.15 less. In-shell Chandlers are still in the $2.00 area with Tulare’s and Howard’s $0.05- $0.10 less. Not sure of the Jumbo/Large Hartley’s as very little trading has taken place over the past several months. The last price I heard was $1.75.
Let me know if you have any questions or comments.
Kind regards,
Pete
Tulare’s 5/10/11(note burnt ends on the tip’s of the 3rd set)
1st set 2nd set 3rd set
CROP:
Again, walnut shipments continue to set monthly records with April shipments reaching 32,764 inshell equivalent tons compared to 29,001 tons last April. This puts the total shipments to date at 416,139 tons, just 86,000 tons short of the entire 2010 crop tonnage (502,000 tons).
Based on my next four month forward forecast, I put the 2010 crop carry-over at 36,000 tons, 5,000 tons less than last year. However, this is based on the CWB official shell out rate of 43.5%, which could be adjusted depending on the final walnut inventories on September 1st.
Turkey/UAR and China/Hong Kong continues to lead the import of California walnuts. China/Hong Kong year to date inshell shipments reached 98.1 million pounds compared to 41.1 million pounds last year. Although Turkey/UAR got a late start, they have imported 69.0 million pounds of inshell, compared to 54.8 at this time last year.
Export shelled shipments have reached 121,358 million pounds, 15.6 million pounds ahead of last year. Domestic shelled shipments were 117,887 pounds, down 11.9 million pounds. The combined total tonnage for shelled products is 239.2 million pounds, 3.7 million ahead of last year.
At this stage, the 2011 walnut crop looks good, however, it appears that some of the 3rd. set on Tulare’s have been damaged hot winds several weeks ago. Not sure if this is the case in other parts of the growing regions, but the four orchards I inspected had this type of damage. The Chandlers looked good as well as the Vina’s and Hartley’s.
Although we have had a great growing season with plenty of water and chill hours, I still believe the crop will be down from last year’s record crop (502,000 tons).
I believe the Harleys tonnage will get back to normal and will be down 10,000 tons from last year (70,000 tons). Chandler tonnage may be up somewhat but there is a good chance that the Tulare’s will be down again.
In any event, it is still too early to make a calculated estimate; but we will have a better idea of the crop size when the packers issue their “subjective” estimate the end of July.
California Walnut Shipments Recap (000)
Month (April) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 3,823 200,440 4,639 282,288 40.1%
Shelled (lbs.) 23,947 235,594 26,487 239,246 0.02%
Total Tons 29,001 336,729 32,764 416,139 13.5%
Market:
Inquiries have slowed down from last month and very little new trading is taken place because of low inventories.
The market for Light Halves and Pieces continue in the $4.30 range with Combo material approximately $0.15 less. In-shell Chandlers are still in the $2.00 area with Tulare’s and Howard’s $0.05- $0.10 less. Not sure of the Jumbo/Large Hartley’s as very little trading has taken place over the past several months. The last price I heard was $1.75.
Let me know if you have any questions or comments.
Kind regards,
Pete
Tulare’s 5/10/11(note burnt ends on the tip’s of the 3rd set)
1st set 2nd set 3rd set
Monday, May 16, 2011
Weekly Cashews update
MAY 14, 2011
Cashew market was steady with a firm undertone in Week 20. Business was done for W320 in the 3.95-4.00 range from India & Vietnam. There were reports that Vietnam sold Splits around 3.45-3.50 & Pieces from 3.25 to 3.35 FOB. There was a fair amount of buying interest from several directions. Most processors are asking few cents more now and that too for limited quantities.
RCN prices have moved up from the lows seen in April. Shipments from West Africa are picking up but not to the extent expected. It seems that the shipping period will extend several weeks beyond normal. This will definitely affect the kernel yields and will also mean continued tightness of kernel availability for next few months.
In the last 3 weeks, prices moved from 3.80/3.85 to 3.95/4.00 FOB and all markets have been buying for third quarter shipments – this indicates that offtake in Jan-Apr has not been as bad as expected. This will probably mean that there will be regular buying to fulfill delivery commitments. Added to that, there will be buying in case of any new contracts with roasters / retailers.
Indian domestic market which was quiet for about six weeks is showing some signs of activity. Traders normally start buying from mid/late Jun to build up positions before the peak consumption period of Aug-Dec. It will be interesting to see how they operate this year – high prices could reduce carrying capacity but if the demand is there, financing should not be a problem.
Considering this demand side scenario and no possibility of any immediate increase in supply, some people feel that there is room for market to go still higher. Our feeling is that even if the prices do not go up too much, there is very little chance of any price decline in the near future. Market will continue to be supported by regular buying from some market or the other (although there may be periodic dips if some processors need to sell in a hurry to finance RCN purchases - this may not happen if the RCN flow is spread over a longer period).
Apart from any major development in external factors, a change in the cashew market trend will happen only when the supply-demand balance turns easier – this is possible only when supply increases significantly (good crops in all origins) OR if there is a significant move away from cashews in major consuming regions. There are no signs of either at the moment but things could change at the end of the year or beginning of next year. Until there are clear indications of change in either of the fundamental factors, we should expect a steady to firm market.
Regards,
Pankaj N. Sampat
Cashew market was steady with a firm undertone in Week 20. Business was done for W320 in the 3.95-4.00 range from India & Vietnam. There were reports that Vietnam sold Splits around 3.45-3.50 & Pieces from 3.25 to 3.35 FOB. There was a fair amount of buying interest from several directions. Most processors are asking few cents more now and that too for limited quantities.
RCN prices have moved up from the lows seen in April. Shipments from West Africa are picking up but not to the extent expected. It seems that the shipping period will extend several weeks beyond normal. This will definitely affect the kernel yields and will also mean continued tightness of kernel availability for next few months.
In the last 3 weeks, prices moved from 3.80/3.85 to 3.95/4.00 FOB and all markets have been buying for third quarter shipments – this indicates that offtake in Jan-Apr has not been as bad as expected. This will probably mean that there will be regular buying to fulfill delivery commitments. Added to that, there will be buying in case of any new contracts with roasters / retailers.
Indian domestic market which was quiet for about six weeks is showing some signs of activity. Traders normally start buying from mid/late Jun to build up positions before the peak consumption period of Aug-Dec. It will be interesting to see how they operate this year – high prices could reduce carrying capacity but if the demand is there, financing should not be a problem.
Considering this demand side scenario and no possibility of any immediate increase in supply, some people feel that there is room for market to go still higher. Our feeling is that even if the prices do not go up too much, there is very little chance of any price decline in the near future. Market will continue to be supported by regular buying from some market or the other (although there may be periodic dips if some processors need to sell in a hurry to finance RCN purchases - this may not happen if the RCN flow is spread over a longer period).
Apart from any major development in external factors, a change in the cashew market trend will happen only when the supply-demand balance turns easier – this is possible only when supply increases significantly (good crops in all origins) OR if there is a significant move away from cashews in major consuming regions. There are no signs of either at the moment but things could change at the end of the year or beginning of next year. Until there are clear indications of change in either of the fundamental factors, we should expect a steady to firm market.
Regards,
Pankaj N. Sampat
Monday, May 09, 2011
Weekly Cashews update
MAY 7, 2011
There was reasonable activity with all markets in Week 19 with prices moving up a few cents in the latter part of the week. Business was done for W320 from 3.85 to 3.95, W450 & SW320 from 3.75 to 3.80, SW360 from 3.55 to 3.65, Splits around 3.45, Pieces around 3.30 FOB (some processors were able to sell few cents higher). Lower offers are no longer available from both origins. Prices moved up a bit in the Indian domestic market as well.
RCN market continued to see a wide range of prices depending on origin, quality and payment terms. Shipments are expected to move faster in May although this is not certain as there are lot of logistic problems in several ports. Based on cutting test results in origin, kernel yields from most origins are expected to be lower than normal. Vietnam has been more aggressive in West Africa than normal. Coupled with the quantities being picked up by Brazil, this will leave substantially lower quantity for Indian processors.
As discussed earlier, processing in Feb-Apr has been much lower than normal (some processors have been running to less than 50% of capacity). May is also expected to be slow with bulk of RCN arriving in India & Vietnam from mid June. If you take into account lower kernel yields in coming months, it means that the pipeline will continue to be tight in the foreseeable future. Supply will become comfortable only after there is an increase in production. This can happen only if 2011/12 crops are really good – we have had two consecutive bad crop years.
Usage in some markets will definitely be affected due to the high prices but even a double digit decline in some markets will not equal the supply shortage from two bad crops. In Asia, the high prices have not had any impact on usage – in the last quarter of 2010, demand was strong despite prices being at historical high levels.
In the next 3-4 months, we expect good demand in Asia (including West Asia) for the traditional festivals. Also the two big importing regions – USA & EU – are expected to continue their pattern of buying for few months requirement. USD has moved up about 3.50% in two days at the end of this week. If it resumes decline in few weeks (or even remains around current levels) the cost for EU, Australia and some other markets will continue to be around 2010 average – this should reduce the impact of higher prices when contracts are being made for late 2011 & early 2012 deliveries.
There is a view that all this means that prices can go higher before they start coming down (when supply improves or if demand in all markets sees a big decline). Our feeling is that even if prices do not go up much, there is very little chance of any significant decline in prices for next few months (although we may probably see some dips when some processors need to sell to raise cash to pay for RCN purchases).
To sum up, we can expect the market to be steady to firm in the foreseeable future – change in trend & range is possible only when supply becomes comfortable (not possible in the near term) or something unexpected happens on external factors.
Would appreciate your comments on current market situation, your views & forecast of demand + market trend.... and any other news + information
Regards,
Pankaj N. Sampat
There was reasonable activity with all markets in Week 19 with prices moving up a few cents in the latter part of the week. Business was done for W320 from 3.85 to 3.95, W450 & SW320 from 3.75 to 3.80, SW360 from 3.55 to 3.65, Splits around 3.45, Pieces around 3.30 FOB (some processors were able to sell few cents higher). Lower offers are no longer available from both origins. Prices moved up a bit in the Indian domestic market as well.
RCN market continued to see a wide range of prices depending on origin, quality and payment terms. Shipments are expected to move faster in May although this is not certain as there are lot of logistic problems in several ports. Based on cutting test results in origin, kernel yields from most origins are expected to be lower than normal. Vietnam has been more aggressive in West Africa than normal. Coupled with the quantities being picked up by Brazil, this will leave substantially lower quantity for Indian processors.
As discussed earlier, processing in Feb-Apr has been much lower than normal (some processors have been running to less than 50% of capacity). May is also expected to be slow with bulk of RCN arriving in India & Vietnam from mid June. If you take into account lower kernel yields in coming months, it means that the pipeline will continue to be tight in the foreseeable future. Supply will become comfortable only after there is an increase in production. This can happen only if 2011/12 crops are really good – we have had two consecutive bad crop years.
Usage in some markets will definitely be affected due to the high prices but even a double digit decline in some markets will not equal the supply shortage from two bad crops. In Asia, the high prices have not had any impact on usage – in the last quarter of 2010, demand was strong despite prices being at historical high levels.
In the next 3-4 months, we expect good demand in Asia (including West Asia) for the traditional festivals. Also the two big importing regions – USA & EU – are expected to continue their pattern of buying for few months requirement. USD has moved up about 3.50% in two days at the end of this week. If it resumes decline in few weeks (or even remains around current levels) the cost for EU, Australia and some other markets will continue to be around 2010 average – this should reduce the impact of higher prices when contracts are being made for late 2011 & early 2012 deliveries.
There is a view that all this means that prices can go higher before they start coming down (when supply improves or if demand in all markets sees a big decline). Our feeling is that even if prices do not go up much, there is very little chance of any significant decline in prices for next few months (although we may probably see some dips when some processors need to sell to raise cash to pay for RCN purchases).
To sum up, we can expect the market to be steady to firm in the foreseeable future – change in trend & range is possible only when supply becomes comfortable (not possible in the near term) or something unexpected happens on external factors.
Would appreciate your comments on current market situation, your views & forecast of demand + market trend.... and any other news + information
Regards,
Pankaj N. Sampat
2011 CALIFORNIA ALMOND FORECAST
MAY 5, 2011
RESULTS
The initial subjective forecast for the 2011 California almond production is 1.75 billion pounds. This is 6 percent above last year's production of 1.65 billion pounds. Estimated bearing acreage for 2011 is 750 thousand. This forecast is based on a telephone survey conducted April 21 - May 2 from a sample of almond growers. Of the 486 growers sampled, 375 reported. Acreage from these reports accounted for 27 percent of the total bearing acreage.
After a good winter with excellent chilling hours, the 2011 almond crop bloom began. A cold spring lengthened the bloom, causing more overlap between varieties. Cold weather can affect bee activity, but pollination was successful this year and California almond trees set a good crop. Freezing temperatures this spring did affect the northern regions more than the south, but frost damage was not significant. Older plantings suffered some damage from the strong winds that accompanied the spring storms, but overall damage was minimal. Spotty damage from hail was also noted. Low disease and insect pressure have been reported and, with all the precipitation California has seen this winter, lack of water for irrigation is not the problem it was a few years ago. Normal levels of shed have been reported. The crop in general is reported to be good with heavy sets noted on several varieties.
PROCEDURES
Results of the subjective survey are based on opinions obtained from growers. The sample of growers changes from year to year and is grouped by size of operation, so all growers will be represented. Each selected grower is asked to indicate their almond yield per acre from last year and expected yield for the current year.
ACKNOWLEDGMENTS
A special thanks goes to the many almond farm operators and owners who provided information on their operations. The support was outstanding and we appreciate the time they spent completing telephone interviews.
RESULTS
The initial subjective forecast for the 2011 California almond production is 1.75 billion pounds. This is 6 percent above last year's production of 1.65 billion pounds. Estimated bearing acreage for 2011 is 750 thousand. This forecast is based on a telephone survey conducted April 21 - May 2 from a sample of almond growers. Of the 486 growers sampled, 375 reported. Acreage from these reports accounted for 27 percent of the total bearing acreage.
After a good winter with excellent chilling hours, the 2011 almond crop bloom began. A cold spring lengthened the bloom, causing more overlap between varieties. Cold weather can affect bee activity, but pollination was successful this year and California almond trees set a good crop. Freezing temperatures this spring did affect the northern regions more than the south, but frost damage was not significant. Older plantings suffered some damage from the strong winds that accompanied the spring storms, but overall damage was minimal. Spotty damage from hail was also noted. Low disease and insect pressure have been reported and, with all the precipitation California has seen this winter, lack of water for irrigation is not the problem it was a few years ago. Normal levels of shed have been reported. The crop in general is reported to be good with heavy sets noted on several varieties.
PROCEDURES
Results of the subjective survey are based on opinions obtained from growers. The sample of growers changes from year to year and is grouped by size of operation, so all growers will be represented. Each selected grower is asked to indicate their almond yield per acre from last year and expected yield for the current year.
ACKNOWLEDGMENTS
A special thanks goes to the many almond farm operators and owners who provided information on their operations. The support was outstanding and we appreciate the time they spent completing telephone interviews.
Wednesday, April 13, 2011
Early almond bloom foretells excellent crop set
Fri, 2011-04-08 13:35
This year’s almond bloom in the central San Joaquin Valley was the latest and longest that Marvin Yotsuya, a PCA with Kerman Ag Resources at Kerman, Calif., has seen in his nearly four decade-long career.
“It was strung out and lasted about three weeks,” he says. Yotsuya made his comments in Tree Nut Farm Press, a twice monthly electronic newsletter published by Western Farm Press and sponsored online by Cheminova.
Yotsuya said early varieties — Avalon, Fritz and Sonora — have an “excellent percentage” of nut set, while the sets on Nonpareil, Wood Colony, Monterey, Carmel and Butte are good to excellent.”
Strong bee activity gets credit for the good set, despite some very cold weather.
You can read more of Yotsuya’s comments in a the most recent edition of Tree Nut Farm Press by going to http://subscribe.westernfarmpress.com/subscribe.cfm?tc=NNWEB.
There you also will find comments from John Slaughter of Burchell Nursery about development on commercial self-pollinating Nonpareil and California varieties.
After 20 years of fruit-tree breeding and 15 years of working with almonds as director of Burchell Nursery’s breeding program, John Slaughter is edging closer to his goal of developing commercially viable self-fertile Nonpareil and California-type almond varieties.
“They’re the future of the industry,” says Slaughter, who is based at the company’s breeding program near Fresno. His work with almond and stone fruit takes him throughout the world to areas with climates similar to California.
Jack Gilbert’s walnut orchards near Wheatland, Calif., were still dormant. However, his Serrs are just starting to push out catkins.
“We’ve had about 6 inches of rain since early March and are ahead of normal for the year,” Gilbert says. “We’ve had this kind of weather before, so I’m not really worried at this point. The trees should be OK.”
Gilbert talks about what he is doing to control walnut blight in this rainy weather.
Gilbert also talks about using pheromone confusing to control coddling moth in the latest edition of Tree Nut Farm Press.
You can read more about what these California tree nut industry leaders have to say by visiting back issues of Tree Nut Farm Press at http://subscribe.westernfarmpress.com/subscribe.cfm?tc=NNWEB where you can also subscribe to future, exclusive in depth issues.
No
Source URL: http://westernfarmpress.com/tree-nuts/early-almond-bloom-foretells-excellent-crop-set
This year’s almond bloom in the central San Joaquin Valley was the latest and longest that Marvin Yotsuya, a PCA with Kerman Ag Resources at Kerman, Calif., has seen in his nearly four decade-long career.
“It was strung out and lasted about three weeks,” he says. Yotsuya made his comments in Tree Nut Farm Press, a twice monthly electronic newsletter published by Western Farm Press and sponsored online by Cheminova.
Yotsuya said early varieties — Avalon, Fritz and Sonora — have an “excellent percentage” of nut set, while the sets on Nonpareil, Wood Colony, Monterey, Carmel and Butte are good to excellent.”
Strong bee activity gets credit for the good set, despite some very cold weather.
You can read more of Yotsuya’s comments in a the most recent edition of Tree Nut Farm Press by going to http://subscribe.westernfarmpress.com/subscribe.cfm?tc=NNWEB.
There you also will find comments from John Slaughter of Burchell Nursery about development on commercial self-pollinating Nonpareil and California varieties.
After 20 years of fruit-tree breeding and 15 years of working with almonds as director of Burchell Nursery’s breeding program, John Slaughter is edging closer to his goal of developing commercially viable self-fertile Nonpareil and California-type almond varieties.
“They’re the future of the industry,” says Slaughter, who is based at the company’s breeding program near Fresno. His work with almond and stone fruit takes him throughout the world to areas with climates similar to California.
Jack Gilbert’s walnut orchards near Wheatland, Calif., were still dormant. However, his Serrs are just starting to push out catkins.
“We’ve had about 6 inches of rain since early March and are ahead of normal for the year,” Gilbert says. “We’ve had this kind of weather before, so I’m not really worried at this point. The trees should be OK.”
Gilbert talks about what he is doing to control walnut blight in this rainy weather.
Gilbert also talks about using pheromone confusing to control coddling moth in the latest edition of Tree Nut Farm Press.
You can read more about what these California tree nut industry leaders have to say by visiting back issues of Tree Nut Farm Press at http://subscribe.westernfarmpress.com/subscribe.cfm?tc=NNWEB where you can also subscribe to future, exclusive in depth issues.
No
Source URL: http://westernfarmpress.com/tree-nuts/early-almond-bloom-foretells-excellent-crop-set
WALNUT MARKET/CROP REPORT April 13, 2011
R.L. “Pete” Turner CROP:
Walnut shipments continue setting records with March shipments reaching 37,269 inshell equivalent tons compared to 34,700 tons last March. This is 5,000 more than I have forecasted.
As usual, Turkey/UAR and China/Hong Kong continues to import California walnuts at a record pace. China leads year to date inshell imports with 97.5 million pounds compared 40.3 million pounds last year. Turkey/UAR has imported 66.4 million pounds of inshell, compared to 54.5 at this time last year.
Export shelled shipments have reached 107.9 million with domestic shipments at 104.9. Domestic shelled shipments are down 12.3 million pounds, but export shipments are up 13.5 million pounds. Combined, the total tonnage for shelled products is 212.8 million pounds, about 1.1 million ahead of last year.
Most packers continue to stay off the market because they are out of inventory, and some are off the market until they get farther into processing their shelling inventories. To my knowledge, no packer is off the market believing that the market will continue to strengthen.
It looks like the 2011 walnut crop has again been blessed with very favorable winter conditions as most growers believe their orchards have received significant “chill hours” as record rain fall for California have also been beneficial to the trees.
That being said, most of the major growers I talked with believe their 2011 crop will be down between 5-10%. Most believe the Harleys will be down at least 10,000 tons, as well as the chance that chandler will also be off from last year’s tonnage.
Thus, if you compensate for new bearing acres, this would put the up-coming crop around 480,000 tons. In any event, it is still too early to make any calculated estimate; however, we will have a better idea of the crop size when the packers issue their “subjective” estimate the later part of July.
The in-shell equivalent tonnage shipped to date is 383,375 tons, 45,647 tons ahead of last year shipments (337,728 tons). If this trend continues, we may have a carry-over of less than 40,000 tons.
California Walnut Shipments Recap (000)
Month (Jan.) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 7,366 196,617 8,581 277,649 41.2%
Shelled (lbs.) 27,504 211,647 28,691 212,759 0.05%
Total Tons 34,797 337,728 37,269 383,375 13.5%
Market:
Inquiries continue to be active, but few trades due to depleted inventories. China came back for material right after the New Years holiday and Turkey buyers are still making their rounds at the packers trying to pick up addition material.
The market for Light Halves and Pieces are still in the $4.30 range with Combo material about $0.15 less. In shell Chandlers are about $2.00 with Tulare’s and Howard’s $0.05- $0.10 less. The last I heard, Jumbo/Large Hartley’s is about $1.75.
Let me know if you have any questions or comments.
Kind regards,
Pete
Walnut shipments continue setting records with March shipments reaching 37,269 inshell equivalent tons compared to 34,700 tons last March. This is 5,000 more than I have forecasted.
As usual, Turkey/UAR and China/Hong Kong continues to import California walnuts at a record pace. China leads year to date inshell imports with 97.5 million pounds compared 40.3 million pounds last year. Turkey/UAR has imported 66.4 million pounds of inshell, compared to 54.5 at this time last year.
Export shelled shipments have reached 107.9 million with domestic shipments at 104.9. Domestic shelled shipments are down 12.3 million pounds, but export shipments are up 13.5 million pounds. Combined, the total tonnage for shelled products is 212.8 million pounds, about 1.1 million ahead of last year.
Most packers continue to stay off the market because they are out of inventory, and some are off the market until they get farther into processing their shelling inventories. To my knowledge, no packer is off the market believing that the market will continue to strengthen.
It looks like the 2011 walnut crop has again been blessed with very favorable winter conditions as most growers believe their orchards have received significant “chill hours” as record rain fall for California have also been beneficial to the trees.
That being said, most of the major growers I talked with believe their 2011 crop will be down between 5-10%. Most believe the Harleys will be down at least 10,000 tons, as well as the chance that chandler will also be off from last year’s tonnage.
Thus, if you compensate for new bearing acres, this would put the up-coming crop around 480,000 tons. In any event, it is still too early to make any calculated estimate; however, we will have a better idea of the crop size when the packers issue their “subjective” estimate the later part of July.
The in-shell equivalent tonnage shipped to date is 383,375 tons, 45,647 tons ahead of last year shipments (337,728 tons). If this trend continues, we may have a carry-over of less than 40,000 tons.
California Walnut Shipments Recap (000)
Month (Jan.) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 7,366 196,617 8,581 277,649 41.2%
Shelled (lbs.) 27,504 211,647 28,691 212,759 0.05%
Total Tons 34,797 337,728 37,269 383,375 13.5%
Market:
Inquiries continue to be active, but few trades due to depleted inventories. China came back for material right after the New Years holiday and Turkey buyers are still making their rounds at the packers trying to pick up addition material.
The market for Light Halves and Pieces are still in the $4.30 range with Combo material about $0.15 less. In shell Chandlers are about $2.00 with Tulare’s and Howard’s $0.05- $0.10 less. The last I heard, Jumbo/Large Hartley’s is about $1.75.
Let me know if you have any questions or comments.
Kind regards,
Pete
Monday, April 11, 2011
AU: Macadamia production tipped to drop
The group representing Australian macadamia farmers says it is expecting production to drop up to 10 per cent this year. Australian Macadamia Society chief executive officer Jolyon Burnett says production has been low for the past three years because of weather extremes.
He says while the value of Australian macadamias is strong, the lower production is concerning. "We had hoped to see production of around 40,000 tonnes this year," he said. "We're now expecting around 35,000 tonnes, so that's a drop of about seven to 10 per cent and it's a bit of a worry."
Source: abc.net.au
He says while the value of Australian macadamias is strong, the lower production is concerning. "We had hoped to see production of around 40,000 tonnes this year," he said. "We're now expecting around 35,000 tonnes, so that's a drop of about seven to 10 per cent and it's a bit of a worry."
Source: abc.net.au
Monday, March 28, 2011
Weekly Cashews update
MAR 26, 2011
Cashew market was quiet in Week 13 after two weeks of good activity in all markets. This week, buyers were bidding 5-10 cents lower but there was no selling interest at the lower levels. Stray business was done for W240 around 4.45, W320 around 4.05, SW320 around 3.80, Splits around 3.40 FOB. Some markets paid few cents higher for W240 and W320. Indian domestic market has been quiet for almost a month and inventories at consuming centres are running low - activity is expected to pick up in April.
RCN market is steady – Benin around 1600, Ghana & IVC around 1450, Nigeria around 1400 C&F. Shipments from Nigeria & Benin have started. Ghana/IVC shipments expected to start soon. Shellers hope that movements of RCN in IVC – and more importantly, shipments to India & Vietnam – will pick up in April and provide relief from the tight supply & high prices. Unseasonal rains in Vietnam are causing concern. Drying is a problem – this will affect kernel yield. Crop size may also be lower if rains do not stop. Situation needs to be watched closely.
Due to the late crops in India & Vietnam and slow shipments from West Africa, processing in Apr (and maybe even May) will be lower than normal. This could lead to squeeze in kernel supplies in the second quarter UNLESS the offtake in first quarter is much lower than normal.
For the time being, there seems to be nothing that will change the trading pattern – everyone in the chain will continue to operate for the short term & refrain from taking any large forward positions. This means that there will be regular bursts of activity followed by some quietness. Each burst will mean a dip or spike in prices, depending on who / what initiates the activity. This pattern will keep the market moving around the current range unless there is some big improvement in RCN flow or there is a big kernel demand.
As discussed earlier, a trend change will happen only if there is a big drop in offtake in several markets together OR there is a sudden pressure of RCN arrivals (or there is some big external development). Otherwise, it will take several months for supply-demand balance to be restored and prices to soften from the current levels.
KINDLY ADVISE YOUR COMMENTS ON CURRENT SITUATION, VIEWS & FORECAST OF TREND FOR COMING WEEKS AND ANY OTHER INFORMATION / NEWS
Regards,
Pankaj N. Sampat
Cashew market was quiet in Week 13 after two weeks of good activity in all markets. This week, buyers were bidding 5-10 cents lower but there was no selling interest at the lower levels. Stray business was done for W240 around 4.45, W320 around 4.05, SW320 around 3.80, Splits around 3.40 FOB. Some markets paid few cents higher for W240 and W320. Indian domestic market has been quiet for almost a month and inventories at consuming centres are running low - activity is expected to pick up in April.
RCN market is steady – Benin around 1600, Ghana & IVC around 1450, Nigeria around 1400 C&F. Shipments from Nigeria & Benin have started. Ghana/IVC shipments expected to start soon. Shellers hope that movements of RCN in IVC – and more importantly, shipments to India & Vietnam – will pick up in April and provide relief from the tight supply & high prices. Unseasonal rains in Vietnam are causing concern. Drying is a problem – this will affect kernel yield. Crop size may also be lower if rains do not stop. Situation needs to be watched closely.
Due to the late crops in India & Vietnam and slow shipments from West Africa, processing in Apr (and maybe even May) will be lower than normal. This could lead to squeeze in kernel supplies in the second quarter UNLESS the offtake in first quarter is much lower than normal.
For the time being, there seems to be nothing that will change the trading pattern – everyone in the chain will continue to operate for the short term & refrain from taking any large forward positions. This means that there will be regular bursts of activity followed by some quietness. Each burst will mean a dip or spike in prices, depending on who / what initiates the activity. This pattern will keep the market moving around the current range unless there is some big improvement in RCN flow or there is a big kernel demand.
As discussed earlier, a trend change will happen only if there is a big drop in offtake in several markets together OR there is a sudden pressure of RCN arrivals (or there is some big external development). Otherwise, it will take several months for supply-demand balance to be restored and prices to soften from the current levels.
KINDLY ADVISE YOUR COMMENTS ON CURRENT SITUATION, VIEWS & FORECAST OF TREND FOR COMING WEEKS AND ANY OTHER INFORMATION / NEWS
Regards,
Pankaj N. Sampat
Wednesday, March 23, 2011
Kenya: Attractive prices split cashew nuts dealers
A row is simmering between local processors and former exporters of raw cashew nuts in the wake of rising global prices of nuts. Exporters on Tuesday said a government ban on export of raw nuts since 2009 is robbing the country’s farmers the benefits of the high global prices enjoyed by their Tanzanian counterparts. They said they are planning to put up a processing unit in Kenya. “Instead of going into dispute with the local processors, some of us have decided to put up a factory immediately,” said Mr Samuel Varghese, chairman of the Kenya Cashew nut Processors and Exporters Association in a statement appearing in the Nation on Tuesday.
Mr Varghese said he will offer farmers higher prices - a minimum of Sh65 per kilogramme compared to Sh55 per kilogramme that they are getting from the current processors. Drawing comparison from Tanzania where this season saw farmers getting between $1,600 and $1,800 per metric tonne or Sh65 and Sh75 per kilogramme, farmers in Kenya are supposed to receive $1,500 per metric tonne or Sh55 per kilogramme according to Mr Varghese. Nut Processors Association of Kenya (NutPAK) chief executive officer Mr Charles Muigai said international traders, who dominated the market before the ban, are only interested when the world market prices are anticipated to increase. This is when, he said, they would come in with high prices through brokers who pay farmers poor farm gate prices.
Source: nation.co.ke
Publication date: 3/23/2011
Sunday, March 13, 2011
Weekly Cashews update
MAR 12, 2011
Cashew prices moved up a few cents more in week 10 – business was done for W240 around 4.35 / W320 around 3.95 / W450 around 3.75 FOB / WS around 3.40 / LP around 3.20 FOB. Even at the higher levels, selling interest was limited. Activity in Indian market picked up – specially for brokens.
RCN arrivals continue to be slow and prices are high. Clearer picture of RCN price trend will be available in April but it certainly seems that RCN supply in India and Vietnam will be tight for couple of months (maybe more if a viable alternate route for movement of IVC RCN is not found quickly). Until shellers have covered a reasonable quantity of RCN – physically – they will be reluctant to make any large kernel sales because of the uncertainty of supply despite the high prices.
Kernel buyers seem to be content to buy small volumes at regular intervals on hand to mouth basis. They are probably waiting for prices to come down before making any large purchases to replenish depleted inventories. For the time being it does not seem if supply will become comfortable soon. Till then, the continued buying for nearbys will support the market.
Even if the RCN flow picks up in April/May, initial prices will be high as most sellers are running out of stock. We might see a softening of RCN prices in June/July but that may not have immediate impact on kernel prices UNLESS kernel offtake in the next 2-3 months is very low and buyers are able to extend their limited inventories for few weeks more. A significant downward move in prices is possible only if during second quarter, the RCN flow is normal AND the kernel demand is very low. If supplies pick up in third quarter it may not lead to lower prices as the third quarter is the peak buying period for all markets (including the largest consuming region – Asia).
Outlook for second half of the year continues to be hazy but everything points to a tight supply and firm market for next 2-3 months (this might continue into third quarter if the RCN flow does not pick up in second quarter).
Overall, the continued uncertainty is making everyone cautious – resultant limited forward cover (both sides) will make the market more susceptible to price swings on either side depending on demand pull or supply push.
WOULD APPRECIATE YOUR COMMENTS ON MARKET SITUATION PLUS DEMAND & SUPPLY FACTORS, VIEWS + FORECAST ON MARKET TREND AND ANY OTHER NEWS / INFORMATION
Regards,
Pankaj N. SampatMonday, March 07, 2011
Weekly Cashews update
MAR 5, 2011
In week 9, there was slightly more buying interest than last few weeks but volume traded was limited as there are few sellers in the market. Prices moved up a few cents on all grades – around 4.30 for W240, around 3.80 for W320, around 3.35 for Splits/Butts, around 3.20 for Pieces (some processors were able to sell few cents higher). Indian domestic market showed signs of revival in demand for brokens (prices are about 10-15% higher than international market).
There is no better news on the RCN front – India / Vietnam arrivals are slow and prices are very high. Benin expected to start shipping in second half March. No certainty about movement from IVC. RCN available for processing in India & Vietnam in Apr-May will be much lower than normal. Until shellers have firm news about RCN shipments, they will be reluctant to make sales. This means reduced liquidity and could cause sudden spike in prices if there is any big buying interest before supply situation improves.
USA imports of cashews in 2010 were 121,270 mt (1.85% higher than 2009) – origin wise shares were Vietnam 58,540mt (about 2% higher) + India 30,720mt (marginally higher) + Brazil 25,010mt (about 15% lower) and others 6,860mt (marginally lower). We do not have figures for EU imports but believe that they may not be much different than 2009. Imports in FH 2011 will give some indication of impact of high prices on usage – this will help to determine buying interest for the second half.
If demand is very slow in coming months and if (or when) supply situation improves, we might see prices drifting lower but that may not happen till middle or second half of the year as it will take time for the supply-demand imbalance to be corrected. Till then, we can expect prices to move around current levels.
Day by day, the outlook is becoming hazier – there seems to be no end to the tunnel. Historically high prices are causing concern about impact on usage. Supply side constraints are putting a question mark on kernel availability in second quarter (and may be beyond that as well). Even if crops are normal, RCN may not reach processors in time and this could mean significant shortage for few weeks (maybe months). Lack of product could mean lost sales (at the retail level, food / snack purchases are not postponed). This could have great impact on 2011 usage but the extent may not be known until it is too late.
Everybody is being very cautious. Selling and buying is being done for short periods. This increases importance of spot prices and also means higher volatility. Inability to judge trend and take reasonable forward positions exposes everyone to huge risk of sudden moves in prices depending on news & developments on supply or demand side.
Improvement on supply side or negative news from importing countries could have an immediate & significant impact on sentiment and trend. But, for the time being, there is nothing on the horizon to change the firm undertone of the market.
Would appreciate your comments on market situation, views on supply & demand prospects + market trend and any other information + news
Regards,
Pankaj N. Sampat
In week 9, there was slightly more buying interest than last few weeks but volume traded was limited as there are few sellers in the market. Prices moved up a few cents on all grades – around 4.30 for W240, around 3.80 for W320, around 3.35 for Splits/Butts, around 3.20 for Pieces (some processors were able to sell few cents higher). Indian domestic market showed signs of revival in demand for brokens (prices are about 10-15% higher than international market).
There is no better news on the RCN front – India / Vietnam arrivals are slow and prices are very high. Benin expected to start shipping in second half March. No certainty about movement from IVC. RCN available for processing in India & Vietnam in Apr-May will be much lower than normal. Until shellers have firm news about RCN shipments, they will be reluctant to make sales. This means reduced liquidity and could cause sudden spike in prices if there is any big buying interest before supply situation improves.
USA imports of cashews in 2010 were 121,270 mt (1.85% higher than 2009) – origin wise shares were Vietnam 58,540mt (about 2% higher) + India 30,720mt (marginally higher) + Brazil 25,010mt (about 15% lower) and others 6,860mt (marginally lower). We do not have figures for EU imports but believe that they may not be much different than 2009. Imports in FH 2011 will give some indication of impact of high prices on usage – this will help to determine buying interest for the second half.
If demand is very slow in coming months and if (or when) supply situation improves, we might see prices drifting lower but that may not happen till middle or second half of the year as it will take time for the supply-demand imbalance to be corrected. Till then, we can expect prices to move around current levels.
Day by day, the outlook is becoming hazier – there seems to be no end to the tunnel. Historically high prices are causing concern about impact on usage. Supply side constraints are putting a question mark on kernel availability in second quarter (and may be beyond that as well). Even if crops are normal, RCN may not reach processors in time and this could mean significant shortage for few weeks (maybe months). Lack of product could mean lost sales (at the retail level, food / snack purchases are not postponed). This could have great impact on 2011 usage but the extent may not be known until it is too late.
Everybody is being very cautious. Selling and buying is being done for short periods. This increases importance of spot prices and also means higher volatility. Inability to judge trend and take reasonable forward positions exposes everyone to huge risk of sudden moves in prices depending on news & developments on supply or demand side.
Improvement on supply side or negative news from importing countries could have an immediate & significant impact on sentiment and trend. But, for the time being, there is nothing on the horizon to change the firm undertone of the market.
Would appreciate your comments on market situation, views on supply & demand prospects + market trend and any other information + news
Regards,
Pankaj N. Sampat
Sunday, February 27, 2011
Weekly Cashews update
FEB 26, 2011
Cashew market was very quiet in Week 8. Price range widened as some processors (mainly from Vietnam) sold at lower levels. Business was reported for W240 from 4.25 to 4.35 and for W320 from 3.70 to 3.85 FOB. Brokens were in short supply and prices moved up to over 3.30 for Splits and over 3.10 FOB for LP. Indian domestic market continues to be quiet but still above international prices.
No change in RCN situation. Arrivals in India and Vietnam are very slow and prices are very high. Until arrivals pick up – which may be late March - prices are not likely to ease. Some trades for Nigeria around 1225 and Benin around 1550 C&F. IVC situation very unstable and if this does not clear up soon, there could be a big disruption in supplies leading to increased competition for supplies from other origins and other negative impacts discussed earlier.
February has been a quiet month in the kernel market (which is not unusual) but considering that everyone has been working on low inventories, it has been quieter than expected. During March, we should get some indications about offtake in the major importing countries. If this is not as bad as expected, buyers will need to buy to replenish cover for mid year requirements and this will provide support to the market around current levels. If the quietness continues through March, it might mean that kernel prices may drift lower which might lead to lower RCN prices from April (especially if there is some movement in March towards normalcy in IVC).
Unless supply situation eases and RCN prices come down, shellers will not be able to reduce their selling price ideas – they would rather reduce volumes than operate with disparity between RCN & kernel prices.
Another important factor to watch is Asian demand. If the trend of reasonable volumes being traded every few weeks for nearbys continues, the market will be supported at current levels till middle of the year.
It seems that Mar/Apr will determine trend of cashew prices for the rest of the year. If there is reasonable kernel demand in this period or if the IVC situation is not resolved in this period, there is very little chance of any price decline – we could even see a spike in price if there is a long delay in IVC.
On the other hand, if kernel demand is very slow (in all markets) and IVC movements are not delayed too much, prices might drift lower in the second quarter and stabilise in a new range when supply / demand imbalance is corrected.
The unprecedented uncertainty on both sides – supply and demand – is parlaysing everyone in the chain. There is very little cushion to absorb any sudden movements on either side. It seems that uncertainty will continue for few weeks more. This points to increased volatility in the short term.
For better understanding of the market, would appreciate your comments on the various factors, your opinion on prospects for coming weeks and any other news + information
Regards,
Pankaj N. Sampat
Cashew market was very quiet in Week 8. Price range widened as some processors (mainly from Vietnam) sold at lower levels. Business was reported for W240 from 4.25 to 4.35 and for W320 from 3.70 to 3.85 FOB. Brokens were in short supply and prices moved up to over 3.30 for Splits and over 3.10 FOB for LP. Indian domestic market continues to be quiet but still above international prices.
No change in RCN situation. Arrivals in India and Vietnam are very slow and prices are very high. Until arrivals pick up – which may be late March - prices are not likely to ease. Some trades for Nigeria around 1225 and Benin around 1550 C&F. IVC situation very unstable and if this does not clear up soon, there could be a big disruption in supplies leading to increased competition for supplies from other origins and other negative impacts discussed earlier.
February has been a quiet month in the kernel market (which is not unusual) but considering that everyone has been working on low inventories, it has been quieter than expected. During March, we should get some indications about offtake in the major importing countries. If this is not as bad as expected, buyers will need to buy to replenish cover for mid year requirements and this will provide support to the market around current levels. If the quietness continues through March, it might mean that kernel prices may drift lower which might lead to lower RCN prices from April (especially if there is some movement in March towards normalcy in IVC).
Unless supply situation eases and RCN prices come down, shellers will not be able to reduce their selling price ideas – they would rather reduce volumes than operate with disparity between RCN & kernel prices.
Another important factor to watch is Asian demand. If the trend of reasonable volumes being traded every few weeks for nearbys continues, the market will be supported at current levels till middle of the year.
It seems that Mar/Apr will determine trend of cashew prices for the rest of the year. If there is reasonable kernel demand in this period or if the IVC situation is not resolved in this period, there is very little chance of any price decline – we could even see a spike in price if there is a long delay in IVC.
On the other hand, if kernel demand is very slow (in all markets) and IVC movements are not delayed too much, prices might drift lower in the second quarter and stabilise in a new range when supply / demand imbalance is corrected.
The unprecedented uncertainty on both sides – supply and demand – is parlaysing everyone in the chain. There is very little cushion to absorb any sudden movements on either side. It seems that uncertainty will continue for few weeks more. This points to increased volatility in the short term.
For better understanding of the market, would appreciate your comments on the various factors, your opinion on prospects for coming weeks and any other news + information
Regards,
Pankaj N. Sampat
Friday, February 25, 2011
WALNUT MARKET/CROP REPORT February 24, 2011
R.L. “Pete” Turner
CROP:
The official 2010 walnut crop tonnage has been established at 502,000 tons, 8,000 tons less than the official estimate of 510,000 tons (-1.6%). This is more than most industry leaders first believed, but with-in the later estimate range as the crop receipts kept extending out with later than normal deliveries.
It’s too early to get an analysis on the 2011 crop but the orchards have received above average rains and the chill hours have been adequate.
The major question is… when will the trees shut down and rest for awhile. The 2010 crop was the third straight year of record tonnage and I have to believe it’s not just the new bearing acres that were responsible for the heavy production. As an example, the 2010 Hartley crop reached 70,000 tons, which is the highest Hartley tonnage in over 10 years. It should also be noted that almost no new plantings of this variety have taken place in the past 20 years.
As previously reported, due to the below average nut size this year, the industry starting blending sizes in their In-shell packs (Hartley, Chandlers etc.) at the very start of the harvest. This proved to be successful, as it provided more In-shell tonnage for the market and the good news, it appeared to be acceptable by the buyers and their customers.
China/Hong Kong in-shell shipments have now reached 86.2 million pounds, compared to 32.7 million pounds last year; an increase of 164 percent.
Turkey, who played catch up for awhile has now reached 49.2 million pounds of in-shell, which exceeds their last year “year to date” shipments by 4 million pounds.
Year to date in-shell shipments to Germany, Spain and Italy were 72.5 million pounds, surpassing last year “year to date” shipments by 7.9 million pounds (12%).
Even with the heavy shipments of in-shell shelling varieties (Chandler, Tulare’s, Howard’s), shelled shipments have held up and are only 1.2 million pounds behind last year’s shipments.
The in-shell equivalent tonnage shipped to date is 309,464 tons, 38,401 tons ahead of last year shipments (271,063 tons). This tells me that we have shipped 62 percent of the crop, which could make the 2010 crop carry-over about the same as last year (41,000 tons).
California Walnut Shipments Recap (000)
Month (Jan.) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 10,924 181,233 23,070 255,107 40.8%
Shelled (lbs.) 25,547 159,514 25,819 158,262 -0.8.2%
Total Tons 34,361 271,063 41,212 309,464 14.2%
Market:
It is hard to tell if the market is active or not, as it may be a few buyers, asking a lot of packers for product. In any event, it has now become obvious that there will not be enough of California walnuts to satisfy the demands.
A few China/Hong Kong buyers are back now that their New Year celebration is over, but not sure how much volume is involved.
However, I can report that Europe, South America as well as the US market continues to be active.
Prices on Light Halves and Pieces are in the $4.30 range with Combo material about $0.15 less. In shell Jumbo/Large Chandlers are north of $2.00 with Tulare’s and Howard’s $0.05- $0.10 less. Jumbo/Large Hartley’s is around $1.65.
Let me know if you have any questions or comments.
Kind regards,
Pete
CROP:
The official 2010 walnut crop tonnage has been established at 502,000 tons, 8,000 tons less than the official estimate of 510,000 tons (-1.6%). This is more than most industry leaders first believed, but with-in the later estimate range as the crop receipts kept extending out with later than normal deliveries.
It’s too early to get an analysis on the 2011 crop but the orchards have received above average rains and the chill hours have been adequate.
The major question is… when will the trees shut down and rest for awhile. The 2010 crop was the third straight year of record tonnage and I have to believe it’s not just the new bearing acres that were responsible for the heavy production. As an example, the 2010 Hartley crop reached 70,000 tons, which is the highest Hartley tonnage in over 10 years. It should also be noted that almost no new plantings of this variety have taken place in the past 20 years.
As previously reported, due to the below average nut size this year, the industry starting blending sizes in their In-shell packs (Hartley, Chandlers etc.) at the very start of the harvest. This proved to be successful, as it provided more In-shell tonnage for the market and the good news, it appeared to be acceptable by the buyers and their customers.
China/Hong Kong in-shell shipments have now reached 86.2 million pounds, compared to 32.7 million pounds last year; an increase of 164 percent.
Turkey, who played catch up for awhile has now reached 49.2 million pounds of in-shell, which exceeds their last year “year to date” shipments by 4 million pounds.
Year to date in-shell shipments to Germany, Spain and Italy were 72.5 million pounds, surpassing last year “year to date” shipments by 7.9 million pounds (12%).
Even with the heavy shipments of in-shell shelling varieties (Chandler, Tulare’s, Howard’s), shelled shipments have held up and are only 1.2 million pounds behind last year’s shipments.
The in-shell equivalent tonnage shipped to date is 309,464 tons, 38,401 tons ahead of last year shipments (271,063 tons). This tells me that we have shipped 62 percent of the crop, which could make the 2010 crop carry-over about the same as last year (41,000 tons).
California Walnut Shipments Recap (000)
Month (Jan.) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 10,924 181,233 23,070 255,107 40.8%
Shelled (lbs.) 25,547 159,514 25,819 158,262 -0.8.2%
Total Tons 34,361 271,063 41,212 309,464 14.2%
Market:
It is hard to tell if the market is active or not, as it may be a few buyers, asking a lot of packers for product. In any event, it has now become obvious that there will not be enough of California walnuts to satisfy the demands.
A few China/Hong Kong buyers are back now that their New Year celebration is over, but not sure how much volume is involved.
However, I can report that Europe, South America as well as the US market continues to be active.
Prices on Light Halves and Pieces are in the $4.30 range with Combo material about $0.15 less. In shell Jumbo/Large Chandlers are north of $2.00 with Tulare’s and Howard’s $0.05- $0.10 less. Jumbo/Large Hartley’s is around $1.65.
Let me know if you have any questions or comments.
Kind regards,
Pete
Sunday, February 20, 2011
Weekly Cashews Update
FEB 19, 2011
Steady to firm undertone in the Cashew market continued in week 7. India sold W240 around 4.30 and W320 around 3.75 FOB – some processors were able to sell few cents higher. Splits & Pieces moved up a bit. It is reported that some Vietnam processors sold few cents lower than India. There is reasonable buying interest around these levels but offers are limited. Indian domestic market continues to be quiet.
RCN market was quiet – some business was done for Tanzania around 1750 and Mozambique around 1475 C&F. WA RCN quotes were Benin around 1600, IVC/Ghana around 1450, Nigeria around 1250 C&F but these can only be considered indicative until physical movements start. India & Vietnam crops are reported to be late – small arrivals have started and prices are very high.
Situation in IVC needs to be watched closely - if not settled soon, it could lead to big delay in movement of 20% of the world RCN production + more competition for lower RCN availability during Mar-May. The delay would also mean quality deterioration and consequent reduced kernel availability even if the crop is normal in quantity. Another impact of this delay would be that the 2011 crop will be spread over a longer period reducing the pressure on available finances.
Everybody in the Cashew supply chain is confused (and uncomfortable) with the current situation as the uncertainties are much larger than normal. Shellers and buyers (traders and roasters) seem to be content to sell/buy limited quantities as and when needed – neither want to take any big positions.
Despite the historical high prices, shellers are reluctant to sell any large volumes as the RCN pipeline is empty and until the gap is bridged, RCN prices are unlikely to ease (there is a large disparity between current RCN and kernel prices). Despite low inventories (RCN and kernels), buyers are reluctant to buy any large volumes until they have some idea of offtake by retailers after the passage of high prices (especially because prices of many other treenuts are a little softer in the last few weeks).
Our feeling is that kernel market will continue to be firm (and could even move up a bit before easing) if the RCN prices continue around current high levels. Until RCN prices come down significantly, any dip in kernel price should be seen as a buying opportunity.
We might see some decline in kernel prices if nearby demand during Mar-May in the new Asian market as well as traditional markets (USA & Europe) is much lower than what we have seen in the last few months. This might lead to slower RCN buying after the immediate needs are covered resulting in lower RCN prices later in the season. If the RCN prices go down enough, we might see a decline of kernel prices to mid 2010 levels. But this is possible only if all 2011 crops are normal + there is no big delay in IVC RCN movements + there is a big decline in retail offtake in traditional markets enabling them to delay any big buying till the middle of second half.
To sum up, we can say that the confusion and uncertainty is likely to continue till April/May – by that time, there will be some clarity on many of the factors i.e. demand trends + crop prospects + IVC situation. Only then, we will be able to make a reasonable “guess” about market trend for rest of 2011.
Regards,
Pankaj N. Sampat
Steady to firm undertone in the Cashew market continued in week 7. India sold W240 around 4.30 and W320 around 3.75 FOB – some processors were able to sell few cents higher. Splits & Pieces moved up a bit. It is reported that some Vietnam processors sold few cents lower than India. There is reasonable buying interest around these levels but offers are limited. Indian domestic market continues to be quiet.
RCN market was quiet – some business was done for Tanzania around 1750 and Mozambique around 1475 C&F. WA RCN quotes were Benin around 1600, IVC/Ghana around 1450, Nigeria around 1250 C&F but these can only be considered indicative until physical movements start. India & Vietnam crops are reported to be late – small arrivals have started and prices are very high.
Situation in IVC needs to be watched closely - if not settled soon, it could lead to big delay in movement of 20% of the world RCN production + more competition for lower RCN availability during Mar-May. The delay would also mean quality deterioration and consequent reduced kernel availability even if the crop is normal in quantity. Another impact of this delay would be that the 2011 crop will be spread over a longer period reducing the pressure on available finances.
Everybody in the Cashew supply chain is confused (and uncomfortable) with the current situation as the uncertainties are much larger than normal. Shellers and buyers (traders and roasters) seem to be content to sell/buy limited quantities as and when needed – neither want to take any big positions.
Despite the historical high prices, shellers are reluctant to sell any large volumes as the RCN pipeline is empty and until the gap is bridged, RCN prices are unlikely to ease (there is a large disparity between current RCN and kernel prices). Despite low inventories (RCN and kernels), buyers are reluctant to buy any large volumes until they have some idea of offtake by retailers after the passage of high prices (especially because prices of many other treenuts are a little softer in the last few weeks).
Our feeling is that kernel market will continue to be firm (and could even move up a bit before easing) if the RCN prices continue around current high levels. Until RCN prices come down significantly, any dip in kernel price should be seen as a buying opportunity.
We might see some decline in kernel prices if nearby demand during Mar-May in the new Asian market as well as traditional markets (USA & Europe) is much lower than what we have seen in the last few months. This might lead to slower RCN buying after the immediate needs are covered resulting in lower RCN prices later in the season. If the RCN prices go down enough, we might see a decline of kernel prices to mid 2010 levels. But this is possible only if all 2011 crops are normal + there is no big delay in IVC RCN movements + there is a big decline in retail offtake in traditional markets enabling them to delay any big buying till the middle of second half.
To sum up, we can say that the confusion and uncertainty is likely to continue till April/May – by that time, there will be some clarity on many of the factors i.e. demand trends + crop prospects + IVC situation. Only then, we will be able to make a reasonable “guess” about market trend for rest of 2011.
Regards,
Pankaj N. Sampat
Monday, February 14, 2011
Weekly Cashews Update
FEB 12, 2011
Cashew market was steady in Week 6 with a firm undertone. Small increase in prices – W240 around 4.35, W320 around 3.85, Splits & Butts around 3.25 and Pieces around 3.05 FOB. Activity was limited because processors were not keen to sell at current levels and buyers do not seem to be in hurry to buy.
There is no fresh news from the RCN side – no adverse reports from any origin except for the earlier discussed delay in arrivals in Vietnam & India and the concern about IVC movements.
Processing in Feb-Apr will be lower than normal due to lower availability in 2010 and delay in 2011 crops. If the offtake in first quarter is not significantly lower than previous years, this could probably lead to a very tight supply position in the seoond quarter. And if buyers need to buy for second quarter, they will have to pay higher prices as availability is limited.
If kernel prices do not come down in the next 6-8 weeks, there is very little chance for lower RCN prices. If offtake drops substantially in first quarter, kernel buyers may be able to keep away from the market for some time. Reduced activity in kernel market may mean that shellers may slow down their buying unless RCN prices come down. But the fact that RCN stocks are low and 2011 arrivals are delayed may not allow them to wait too long as they have to keep factories running.
It seems that the pattern of nearby kernel activity is here to stay for some time. This will mean that there will be always be someone in the market and this will provide steady support to the market. Shellers will be content to sell small volumes at regular intervals. There will be no pressure on them to reduce prices unless RCN prices come down. Price trend will change only if supplies in 2011 are normal and if the buying for nearbys is significantly lower in the second quarter.
Overall, we continue to feel that the market is very delicately poised. Pricing of kernels for long term will be difficult until there is some more information on kernel offtake and RCN pricing. A realistic view on the trend for 2011 can only be formed in Apr/May. Till then, market will have to be prepared for volatility with a bias towards firmness unless kernel demand is very slow in next 2-3 months.
Regards,
Pankaj N. Sampat
Cashew market was steady in Week 6 with a firm undertone. Small increase in prices – W240 around 4.35, W320 around 3.85, Splits & Butts around 3.25 and Pieces around 3.05 FOB. Activity was limited because processors were not keen to sell at current levels and buyers do not seem to be in hurry to buy.
There is no fresh news from the RCN side – no adverse reports from any origin except for the earlier discussed delay in arrivals in Vietnam & India and the concern about IVC movements.
Processing in Feb-Apr will be lower than normal due to lower availability in 2010 and delay in 2011 crops. If the offtake in first quarter is not significantly lower than previous years, this could probably lead to a very tight supply position in the seoond quarter. And if buyers need to buy for second quarter, they will have to pay higher prices as availability is limited.
If kernel prices do not come down in the next 6-8 weeks, there is very little chance for lower RCN prices. If offtake drops substantially in first quarter, kernel buyers may be able to keep away from the market for some time. Reduced activity in kernel market may mean that shellers may slow down their buying unless RCN prices come down. But the fact that RCN stocks are low and 2011 arrivals are delayed may not allow them to wait too long as they have to keep factories running.
It seems that the pattern of nearby kernel activity is here to stay for some time. This will mean that there will be always be someone in the market and this will provide steady support to the market. Shellers will be content to sell small volumes at regular intervals. There will be no pressure on them to reduce prices unless RCN prices come down. Price trend will change only if supplies in 2011 are normal and if the buying for nearbys is significantly lower in the second quarter.
Overall, we continue to feel that the market is very delicately poised. Pricing of kernels for long term will be difficult until there is some more information on kernel offtake and RCN pricing. A realistic view on the trend for 2011 can only be formed in Apr/May. Till then, market will have to be prepared for volatility with a bias towards firmness unless kernel demand is very slow in next 2-3 months.
Regards,
Pankaj N. Sampat
Friday, February 11, 2011
Almonds Report
Attached is the January 2011 Almond Position Report. Domestic shipments of 37.1mm lbs was +8.7% of last year’s January shipments of 34.1mm lbs.. Export shipments of 82.7mm lbs represented a -6% declines verses last January’s shipments of 88mm lbs.. Overall industry shipments for January ’11 were 119.8mm lbs. verses 122.1mm lbs previous year or -1.8%. Shipments were respectable, but below what most in the industry projected. Current crop receipts to date at 1.55 billion pounds with perhaps another 40 – 45mm lbs to be reported. Non Pariel variety is off this year verses previous year. The industry is currently 65.7% committed or shipped (1.26 billion pounds). We have seen some softening in prices in the past week of approximately .10/lb. Bloom is just starting to take place in the southern part of the state. The next 3 to 4 weeks will be watched closely to see how the market reacts to the bloom and recent industry shipments.
Regards,
Robert Smith
Regards,
Robert Smith
Monday, February 07, 2011
Weekly cashews uodate
FEB 5, 2011
There was no change in cashew prices in week 4 & 5 although there was some pick-up in activity. Fair quantity was traded in the last two weeks by some processors from 3.65 to 3.75 FOB for W320 whereas large packers sold limited quantities around 3.85 FOB (stray business was done few cents higher to off markets). W240 traded around 4.30-4.35 FOB but quantities available were limited.
RCN market is quiet – there is very little unsold product in origin. Shipments from Tanzania & Mozambique will be higher than last season but since the relative quantities were small (less than 10% of world production) and came after disappointing Northern Hemisphere crops, processors were forced to pay high prices. For next few weeks, RCN business will be limited to re-sale of Tanzania & Mozambique RCN. To take advantage of low inventories, RCN traders will release stocks slowly (unless India + Vietnam new crop arrivals are earlier than expected). Realistic WA RCN price trend will not be known till late March/early April.
Everybody in the chain – RCN traders, shellers, kernel traders, roasters, retailers – is wary. There is lot of haziness about kernel demand & crop prospects. Impact of (a) higher prices on demand and (b) higher processing costs on kernel & RCN prices is to be seen.
As prices are high, buyers are not keen to cover more than what they absolutely need to buy. Specially because there is a big question mark about impact of high prices on demand. Although there is risk of being left without product, buyers seem to be willing to wait rather than find themselves holding high priced inventory if the demand drops dramatically. This is a double edged sword because if usage does not drop too much, the steady buying at regular intervals will keep the market firm.
From time to time, some processors are selling at the lower end of the range. This coupled with some selling by traders is providing some respite from high prices. Otherwise, most sellers are reluctant to reduce prices to get sales because there is no RCN available for prompt shipment to cover against sales. Unless RCN prices ease significantly, they will be content to sell small volumes at each spike. For last several months this strategy has been working well. Unless there is a big fall in demand or prospect of big increase in supply, there is no inducement for sellers to change selling pattern.
Many people feel that current price levels – highest we have seen – cannot be sustained and market should drift lower when the big Northern crops start. This cannot be ruled out but a large decline does not seem likely in the medium term due to factors discussed earlier (a) empty pipeline or low inventories (b) higher processing costs (c) steady & regular buying for spot & nearbys.
To sum up, we expect some volatility for 2-3 months and a steady market around current range for most of the year (with a possibility of some increase if there any supply shortage / distortion or if demand is not as badly impacted as feared). A big change in the market trend in 2011 is possible only if all the upcoming crops are good (and move without disturbance) and if the buying interest in the next 2-3 months is slow.
Regards,
Pankaj N. Sampat
There was no change in cashew prices in week 4 & 5 although there was some pick-up in activity. Fair quantity was traded in the last two weeks by some processors from 3.65 to 3.75 FOB for W320 whereas large packers sold limited quantities around 3.85 FOB (stray business was done few cents higher to off markets). W240 traded around 4.30-4.35 FOB but quantities available were limited.
RCN market is quiet – there is very little unsold product in origin. Shipments from Tanzania & Mozambique will be higher than last season but since the relative quantities were small (less than 10% of world production) and came after disappointing Northern Hemisphere crops, processors were forced to pay high prices. For next few weeks, RCN business will be limited to re-sale of Tanzania & Mozambique RCN. To take advantage of low inventories, RCN traders will release stocks slowly (unless India + Vietnam new crop arrivals are earlier than expected). Realistic WA RCN price trend will not be known till late March/early April.
Everybody in the chain – RCN traders, shellers, kernel traders, roasters, retailers – is wary. There is lot of haziness about kernel demand & crop prospects. Impact of (a) higher prices on demand and (b) higher processing costs on kernel & RCN prices is to be seen.
As prices are high, buyers are not keen to cover more than what they absolutely need to buy. Specially because there is a big question mark about impact of high prices on demand. Although there is risk of being left without product, buyers seem to be willing to wait rather than find themselves holding high priced inventory if the demand drops dramatically. This is a double edged sword because if usage does not drop too much, the steady buying at regular intervals will keep the market firm.
From time to time, some processors are selling at the lower end of the range. This coupled with some selling by traders is providing some respite from high prices. Otherwise, most sellers are reluctant to reduce prices to get sales because there is no RCN available for prompt shipment to cover against sales. Unless RCN prices ease significantly, they will be content to sell small volumes at each spike. For last several months this strategy has been working well. Unless there is a big fall in demand or prospect of big increase in supply, there is no inducement for sellers to change selling pattern.
Many people feel that current price levels – highest we have seen – cannot be sustained and market should drift lower when the big Northern crops start. This cannot be ruled out but a large decline does not seem likely in the medium term due to factors discussed earlier (a) empty pipeline or low inventories (b) higher processing costs (c) steady & regular buying for spot & nearbys.
To sum up, we expect some volatility for 2-3 months and a steady market around current range for most of the year (with a possibility of some increase if there any supply shortage / distortion or if demand is not as badly impacted as feared). A big change in the market trend in 2011 is possible only if all the upcoming crops are good (and move without disturbance) and if the buying interest in the next 2-3 months is slow.
Regards,
Pankaj N. Sampat
Monday, January 31, 2011
Weekly Cashews Update
JAN 29, 201
Cashew prices moved up a few cents in Week 4 although very little business was done. Levels traded were US$ 4.30-35 for W320 and US$ 3.75-3.85 for W320. Some business was done few cents higher as well. Most of the trades were for Feb-Apr shipments. Indian domestic market has been quiet for two weeks and prices drifted a little lower from the peaks.
There is not much trading in RCN. Moz RCN is offered around US$ 1450 and there are reports of Nigeria RCN trading around US$ 1225. Indicative offers are around US$ 1500 for Benin and around US$ 1425 for IVC/Ghana. Our feeling is that there will be quite a bit of volatility in offers for WA RCN during next few weeks. Actual opening price levels will be known only by mid or late March and bulk of the trade will happen in Apr/early May. Till mid March, all quotes are speculative and can only be used as an indication of likely trend. At the moment, all origins are expecting normal crops but low inventories with India & Vietnam processors means processors may not have the luxury of waiting for peak arrivals to bring prices down - they might have to start buying as soon as physical arrivals start.
As we have discussed earlier, the industry needs good crops in all origins in 2011 to replenish drawn down inventory and bring reasonable balance between supply & demand. In addition to this, the other short term factors which will impact 2011 market trend are the offtake figures in the first quarter and the kernel activity in Feb/Mar from the two major importing regions. Apart from this, we have to keep close watch on external factors – economic news (signals are for a smoother and growth year) + currency movements + prices of other nuts.
It seems that most buyers need to buy for shipment beyond April but are trying to delay buying as much as they can. They do not want to extend cover at current levels and then find that first quarter offtake is lower than planned. If they can use existing cover to take them through a few more weeks, they hope that prices will ease when RCN arrivals are at peak in Apr/May and then they can cover their second half requirements. Asian demand is expected to be lower for a few weeks and this might lead to a drifting of kernel prices IF the buyers in USA & Europe are also able to keep away from the market in Feb/Mar. This will enable processors to be slow in initial buying and might lead to softer RCN prices in Apr/May (and this will aid further drifting of kernel prices).
On the other hand, if there is steady periodic buying from USA & Europe – like what we have seen in the last 6-9 months - prices will be remain steady and may even move up a bit (in case any one wants to buy volume for spread delivery). This will add to the need of processors to start buying RCN quickly and opening prices will not come down. Any crop shortage (actual or perceived) or any big delay in movement of RCN will add to the potential for higher RCN prices. Consequently, kernel prices will remain firm.
It is impossible to judge (or even guess) market trend beyond a few months. But it certainly seems that the scales are tilted in favour of a steady & firm market for next few months. Although we might see some small dip in prices in the coming weeks if activity is slow or if there are encouraging reports from origin, a significant price decline in the short term is possible only if there is VERY VERY low buying interest PLUS all the crops are very good and there are no supply distortions.
Regards,
Pankaj N. Sampat
Cashew prices moved up a few cents in Week 4 although very little business was done. Levels traded were US$ 4.30-35 for W320 and US$ 3.75-3.85 for W320. Some business was done few cents higher as well. Most of the trades were for Feb-Apr shipments. Indian domestic market has been quiet for two weeks and prices drifted a little lower from the peaks.
There is not much trading in RCN. Moz RCN is offered around US$ 1450 and there are reports of Nigeria RCN trading around US$ 1225. Indicative offers are around US$ 1500 for Benin and around US$ 1425 for IVC/Ghana. Our feeling is that there will be quite a bit of volatility in offers for WA RCN during next few weeks. Actual opening price levels will be known only by mid or late March and bulk of the trade will happen in Apr/early May. Till mid March, all quotes are speculative and can only be used as an indication of likely trend. At the moment, all origins are expecting normal crops but low inventories with India & Vietnam processors means processors may not have the luxury of waiting for peak arrivals to bring prices down - they might have to start buying as soon as physical arrivals start.
As we have discussed earlier, the industry needs good crops in all origins in 2011 to replenish drawn down inventory and bring reasonable balance between supply & demand. In addition to this, the other short term factors which will impact 2011 market trend are the offtake figures in the first quarter and the kernel activity in Feb/Mar from the two major importing regions. Apart from this, we have to keep close watch on external factors – economic news (signals are for a smoother and growth year) + currency movements + prices of other nuts.
It seems that most buyers need to buy for shipment beyond April but are trying to delay buying as much as they can. They do not want to extend cover at current levels and then find that first quarter offtake is lower than planned. If they can use existing cover to take them through a few more weeks, they hope that prices will ease when RCN arrivals are at peak in Apr/May and then they can cover their second half requirements. Asian demand is expected to be lower for a few weeks and this might lead to a drifting of kernel prices IF the buyers in USA & Europe are also able to keep away from the market in Feb/Mar. This will enable processors to be slow in initial buying and might lead to softer RCN prices in Apr/May (and this will aid further drifting of kernel prices).
On the other hand, if there is steady periodic buying from USA & Europe – like what we have seen in the last 6-9 months - prices will be remain steady and may even move up a bit (in case any one wants to buy volume for spread delivery). This will add to the need of processors to start buying RCN quickly and opening prices will not come down. Any crop shortage (actual or perceived) or any big delay in movement of RCN will add to the potential for higher RCN prices. Consequently, kernel prices will remain firm.
It is impossible to judge (or even guess) market trend beyond a few months. But it certainly seems that the scales are tilted in favour of a steady & firm market for next few months. Although we might see some small dip in prices in the coming weeks if activity is slow or if there are encouraging reports from origin, a significant price decline in the short term is possible only if there is VERY VERY low buying interest PLUS all the crops are very good and there are no supply distortions.
Regards,
Pankaj N. Sampat
JAN 29, 201
Cashew prices moved up a few cents in Week 4 although very little business was done. Levels traded were US$ 4.30-35 for W320 and US$ 3.75-3.85 for W320. Some business was done few cents higher as well. Most of the trades were for Feb-Apr shipments. Indian domestic market has been quiet for two weeks and prices drifted a little lower from the peaks.
There is not much trading in RCN. Moz RCN is offered around US$ 1450 and there are reports of Nigeria RCN trading around US$ 1225. Indicative offers are around US$ 1500 for Benin and around US$ 1425 for IVC/Ghana. Our feeling is that there will be quite a bit of volatility in offers for WA RCN during next few weeks. Actual opening price levels will be known only by mid or late March and bulk of the trade will happen in Apr/early May. Till mid March, all quotes are speculative and can only be used as an indication of likely trend. At the moment, all origins are expecting normal crops but low inventories with India & Vietnam processors means processors may not have the luxury of waiting for peak arrivals to bring prices down - they might have to start buying as soon as physical arrivals start.
As we have discussed earlier, the industry needs good crops in all origins in 2011 to replenish drawn down inventory and bring reasonable balance between supply & demand. In addition to this, the other short term factors which will impact 2011 market trend are the offtake figures in the first quarter and the kernel activity in Feb/Mar from the two major importing regions. Apart from this, we have to keep close watch on external factors – economic news (signals are for a smoother and growth year) + currency movements + prices of other nuts.
It seems that most buyers need to buy for shipment beyond April but are trying to delay buying as much as they can. They do not want to extend cover at current levels and then find that first quarter offtake is lower than planned. If they can use existing cover to take them through a few more weeks, they hope that prices will ease when RCN arrivals are at peak in Apr/May and then they can cover their second half requirements. Asian demand is expected to be lower for a few weeks and this might lead to a drifting of kernel prices IF the buyers in USA & Europe are also able to keep away from the market in Feb/Mar. This will enable processors to be slow in initial buying and might lead to softer RCN prices in Apr/May (and this will aid further drifting of kernel prices).
On the other hand, if there is steady periodic buying from USA & Europe – like what we have seen in the last 6-9 months - prices will be remain steady and may even move up a bit (in case any one wants to buy volume for spread delivery). This will add to the need of processors to start buying RCN quickly and opening prices will not come down. Any crop shortage (actual or perceived) or any big delay in movement of RCN will add to the potential for higher RCN prices. Consequently, kernel prices will remain firm.
It is impossible to judge (or even guess) market trend beyond a few months. But it certainly seems that the scales are tilted in favour of a steady & firm market for next few months. Although we might see some small dip in prices in the coming weeks if activity is slow or if there are encouraging reports from origin, a significant price decline in the short term is possible only if there is VERY VERY low buying interest PLUS all the crops are very good and there are no supply distortions.
Regards,
Pankaj N. Sampat
Cashew prices moved up a few cents in Week 4 although very little business was done. Levels traded were US$ 4.30-35 for W320 and US$ 3.75-3.85 for W320. Some business was done few cents higher as well. Most of the trades were for Feb-Apr shipments. Indian domestic market has been quiet for two weeks and prices drifted a little lower from the peaks.
There is not much trading in RCN. Moz RCN is offered around US$ 1450 and there are reports of Nigeria RCN trading around US$ 1225. Indicative offers are around US$ 1500 for Benin and around US$ 1425 for IVC/Ghana. Our feeling is that there will be quite a bit of volatility in offers for WA RCN during next few weeks. Actual opening price levels will be known only by mid or late March and bulk of the trade will happen in Apr/early May. Till mid March, all quotes are speculative and can only be used as an indication of likely trend. At the moment, all origins are expecting normal crops but low inventories with India & Vietnam processors means processors may not have the luxury of waiting for peak arrivals to bring prices down - they might have to start buying as soon as physical arrivals start.
As we have discussed earlier, the industry needs good crops in all origins in 2011 to replenish drawn down inventory and bring reasonable balance between supply & demand. In addition to this, the other short term factors which will impact 2011 market trend are the offtake figures in the first quarter and the kernel activity in Feb/Mar from the two major importing regions. Apart from this, we have to keep close watch on external factors – economic news (signals are for a smoother and growth year) + currency movements + prices of other nuts.
It seems that most buyers need to buy for shipment beyond April but are trying to delay buying as much as they can. They do not want to extend cover at current levels and then find that first quarter offtake is lower than planned. If they can use existing cover to take them through a few more weeks, they hope that prices will ease when RCN arrivals are at peak in Apr/May and then they can cover their second half requirements. Asian demand is expected to be lower for a few weeks and this might lead to a drifting of kernel prices IF the buyers in USA & Europe are also able to keep away from the market in Feb/Mar. This will enable processors to be slow in initial buying and might lead to softer RCN prices in Apr/May (and this will aid further drifting of kernel prices).
On the other hand, if there is steady periodic buying from USA & Europe – like what we have seen in the last 6-9 months - prices will be remain steady and may even move up a bit (in case any one wants to buy volume for spread delivery). This will add to the need of processors to start buying RCN quickly and opening prices will not come down. Any crop shortage (actual or perceived) or any big delay in movement of RCN will add to the potential for higher RCN prices. Consequently, kernel prices will remain firm.
It is impossible to judge (or even guess) market trend beyond a few months. But it certainly seems that the scales are tilted in favour of a steady & firm market for next few months. Although we might see some small dip in prices in the coming weeks if activity is slow or if there are encouraging reports from origin, a significant price decline in the short term is possible only if there is VERY VERY low buying interest PLUS all the crops are very good and there are no supply distortions.
Regards,
Pankaj N. Sampat
Monday, January 24, 2011
Weekly Cashews Update
JAN 22, 2011
In Week 3, cashew prices were steady with a firm undertone – the very low offers seen couple of weeks ago are out of the market. Range of prices offered and traded continue to be wide : W240 from 4.20 to 4.30 and W320 from 3.65 to 3.85 FOB. There is reasonable buying interest at the lower end of the range but not much selling interest. Resellers are quoting few cents below the top end of the range. Despite quiet market, most processors are not willing to reduce prices to get orders.
RCN prices came down a bit – Tanzania due to lower quality and Mozambique due to lack of buying interest (since kernel market has been quiet for almost six weeks now) but the quantity available is limited. All eyes now are on the three big crops (India + Vietnam + West Africa) which will start arriving in a few weeks. So far there is no adverse news from any origin (except for the concern about movement in IVC – since it contributes over 15% of world production, developments in IVC need to be watched closely). There will be lots of rumours about crop prospects in the next 2-3 months but until crops are well under way (say end Mar / ear Apr) it will be difficult to have a reasonable estimate of the crops.
On the demand side, Asian markets will continue to buy steadily but volumes may not be as big as last quarter of 2010 (which is a good thing as availability in first quarter will also be lower due to holidays in Vietnam + lower RCN availability in India). USA & European buying will depend on offtake by retailers in Jan/Feb. General feeling is that there is very little cover beyond April. If there is a big drop in first quarter offtake, buyers may be able to extend cover and delay any big buying for a few weeks. If the drop is not as big as feared, steady buying can be expected from USA & Europe as well.
There is widespread uncertainty and concern in USA & Europe about the impact of the higher prices on consumption. Apart from the fact that almost all nuts (for that matter almost all commodities) have seen significant price increases in the last year, we have to keep in mind the change that we have seen in geographical distibution of cashew consumption. USA & Europe now account for less than 50% of world consumption. A 10% decline in these markets means a 5% decline in world consumption which is less than the 10-12% reduction in supply we have seen in 2010. Demand-supply will be balanced only if there is a very big decline in consumption coupled with good (or atleast normal) 2011 crops.
Over the next few weeks sellers and buyers will be inclined to sell or buy only what they absolutely need to – nobody will be in a mood to take any big positions because of the uncertainty. So, prices can be expected to move in a narrow range. By April, there will be some clarity on both sides of the equation – crop prospects and demand trends. Before that, if anybody needs to take any large position – buying or selling – there will have to be a sufficient premium or discount to induce the other side to act.
To sum up, we expect a lot of volatility for couple of months (depending on news AND rumours about crop prospects) and a steady market around current levels for next few months (unless there is big negative news from the demand side).
Regards,
Pankaj N. Sampat
In Week 3, cashew prices were steady with a firm undertone – the very low offers seen couple of weeks ago are out of the market. Range of prices offered and traded continue to be wide : W240 from 4.20 to 4.30 and W320 from 3.65 to 3.85 FOB. There is reasonable buying interest at the lower end of the range but not much selling interest. Resellers are quoting few cents below the top end of the range. Despite quiet market, most processors are not willing to reduce prices to get orders.
RCN prices came down a bit – Tanzania due to lower quality and Mozambique due to lack of buying interest (since kernel market has been quiet for almost six weeks now) but the quantity available is limited. All eyes now are on the three big crops (India + Vietnam + West Africa) which will start arriving in a few weeks. So far there is no adverse news from any origin (except for the concern about movement in IVC – since it contributes over 15% of world production, developments in IVC need to be watched closely). There will be lots of rumours about crop prospects in the next 2-3 months but until crops are well under way (say end Mar / ear Apr) it will be difficult to have a reasonable estimate of the crops.
On the demand side, Asian markets will continue to buy steadily but volumes may not be as big as last quarter of 2010 (which is a good thing as availability in first quarter will also be lower due to holidays in Vietnam + lower RCN availability in India). USA & European buying will depend on offtake by retailers in Jan/Feb. General feeling is that there is very little cover beyond April. If there is a big drop in first quarter offtake, buyers may be able to extend cover and delay any big buying for a few weeks. If the drop is not as big as feared, steady buying can be expected from USA & Europe as well.
There is widespread uncertainty and concern in USA & Europe about the impact of the higher prices on consumption. Apart from the fact that almost all nuts (for that matter almost all commodities) have seen significant price increases in the last year, we have to keep in mind the change that we have seen in geographical distibution of cashew consumption. USA & Europe now account for less than 50% of world consumption. A 10% decline in these markets means a 5% decline in world consumption which is less than the 10-12% reduction in supply we have seen in 2010. Demand-supply will be balanced only if there is a very big decline in consumption coupled with good (or atleast normal) 2011 crops.
Over the next few weeks sellers and buyers will be inclined to sell or buy only what they absolutely need to – nobody will be in a mood to take any big positions because of the uncertainty. So, prices can be expected to move in a narrow range. By April, there will be some clarity on both sides of the equation – crop prospects and demand trends. Before that, if anybody needs to take any large position – buying or selling – there will have to be a sufficient premium or discount to induce the other side to act.
To sum up, we expect a lot of volatility for couple of months (depending on news AND rumours about crop prospects) and a steady market around current levels for next few months (unless there is big negative news from the demand side).
Regards,
Pankaj N. Sampat
Thursday, January 13, 2011
Dec.10 Almond Industry Shipments
Please note that the following Dec.’10 industry shipments numbers were published this week:
Dec. 10 Dec. ’09 % Change
Domestic 40.6mm 33.9mm +19.8
Export 120.3mm 113.6mm + 5.9
Total 160.9mm 147.5mm + 9.2
Based on December shipments, all market indicators point towards a strengthening market. Most processors believe the crop will end up being between 1.5 – 1.55 billion pounds vs. the 1.65 billion forecast. Crop year to date receipts are 1.42 billion pounds.
Regards,
Robert Smith
Dec. 10 Dec. ’09 % Change
Domestic 40.6mm 33.9mm +19.8
Export 120.3mm 113.6mm + 5.9
Total 160.9mm 147.5mm + 9.2
Based on December shipments, all market indicators point towards a strengthening market. Most processors believe the crop will end up being between 1.5 – 1.55 billion pounds vs. the 1.65 billion forecast. Crop year to date receipts are 1.42 billion pounds.
Regards,
Robert Smith
Wednesday, January 12, 2011
WALNUT MARKET/CROP REPORT
WALNUT MARKET/CROP REPORT
CROP:
At least 98 percent of the walnut crop has been delivered to the packers, with the balance held by grower’s at their facilities.
As reported earlier, quality of the 2010 crop was excellent with high yields and light color. However, the nut sizes were well below normal which forced most Handlers to pack and market Jumbo/Large blends almost from start of the harvest.
However, this was not a problem with the inshell shelling varieties as meat yields on both Jumbo and Large walnuts are about the same. Most Chandlers were packed 70/30 % Jumbo/Large and the majority of the Hartley’s were packed 80/20 % Jumbo/Large with some straight Jumbo’s bringing a premium.
Again, China/Hong Kong lead the way with total inshell shipments reaching 78.5 million pounds, compared to 28.7 million pounds at this time last year. Turkey inshell shipments were 40.2 million pounds, down 3 million pounds from last year. However, they got a late jump on the market and I have no doubt that next month, they will also be well ahead of last year.
Most industry leaders believe the crop will come in under the official estimate of 510,000 tons. The censuses range between a low of 485,000 tons to a high of 500,000 tons. For what ever it is worth, my projection (3rd so far) is 495,000 tons. The California Walnut Board will announce the final crop numbers in about two weeks.
December’s record inshell shipments of 44.9 million pounds took the year to date total tonnage to 231.0 million pounds, 60.7 million pounds more than last year. However, the shelled “year to date” shipments is off slightly with 132.4 million pounds ship to date against 134.0 million pounds last year.
The inshell equivalent tonnage shipped to date is 267,650 tons compared to 236,702 last year, an increase of 13 percent.
California Walnut Shipments Recap (000)
Month (Dec.) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 26,475 170,309 44,942 230,976 35.6%
Shelled (lbs.) 31,795 133,968 33,145 132,381 -1.2%
Total Tons 49,205 236,702 60,569 267,650 13.1%
Market:
After some of the most active walnut trading in recent history, bookings have finally started slowing down. It looks like for now, the China/Hong Kong market is satisfied as well as most of the European markets. However, the Turkey markets is still going strong and are currently buying up most of the remaining inventories.
Some feel China may be back in the market after the Chinese New Year, but I don’t believe there will be much non-committed inventory available for them to book!
Limited bookings in the Light Halves & Piece market is in the $4.00 range with Chandlers about $0.10 higher. Combo Halves and Pieces are at $3.65 with smaller material 5- 10 cents higher than the H&P market. Inshell Jumbo Hartley’s are still trading around the $1.60 level with Jumbo/Larges at $1.55.
Inshell Chandler Jumbo/Large are on both sides of $1.90 with Howard’s and Tulare’s 5-10 cents less.
If the crop comes in at 490,000 tons, the industry has shipped 55 percent of the crop through December. This is 5 percents less than I first predicted. However, I believe January will be another record month and right now, my forecast for shipments through August is 490,000 tons, about the same or maybe a little less that the crop.
This should make for another great year for California walnuts that is if we do not experience another world financial crash.
Let me know if you have any questions.
Kind regards,
Pete
CROP:
At least 98 percent of the walnut crop has been delivered to the packers, with the balance held by grower’s at their facilities.
As reported earlier, quality of the 2010 crop was excellent with high yields and light color. However, the nut sizes were well below normal which forced most Handlers to pack and market Jumbo/Large blends almost from start of the harvest.
However, this was not a problem with the inshell shelling varieties as meat yields on both Jumbo and Large walnuts are about the same. Most Chandlers were packed 70/30 % Jumbo/Large and the majority of the Hartley’s were packed 80/20 % Jumbo/Large with some straight Jumbo’s bringing a premium.
Again, China/Hong Kong lead the way with total inshell shipments reaching 78.5 million pounds, compared to 28.7 million pounds at this time last year. Turkey inshell shipments were 40.2 million pounds, down 3 million pounds from last year. However, they got a late jump on the market and I have no doubt that next month, they will also be well ahead of last year.
Most industry leaders believe the crop will come in under the official estimate of 510,000 tons. The censuses range between a low of 485,000 tons to a high of 500,000 tons. For what ever it is worth, my projection (3rd so far) is 495,000 tons. The California Walnut Board will announce the final crop numbers in about two weeks.
December’s record inshell shipments of 44.9 million pounds took the year to date total tonnage to 231.0 million pounds, 60.7 million pounds more than last year. However, the shelled “year to date” shipments is off slightly with 132.4 million pounds ship to date against 134.0 million pounds last year.
The inshell equivalent tonnage shipped to date is 267,650 tons compared to 236,702 last year, an increase of 13 percent.
California Walnut Shipments Recap (000)
Month (Dec.) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 26,475 170,309 44,942 230,976 35.6%
Shelled (lbs.) 31,795 133,968 33,145 132,381 -1.2%
Total Tons 49,205 236,702 60,569 267,650 13.1%
Market:
After some of the most active walnut trading in recent history, bookings have finally started slowing down. It looks like for now, the China/Hong Kong market is satisfied as well as most of the European markets. However, the Turkey markets is still going strong and are currently buying up most of the remaining inventories.
Some feel China may be back in the market after the Chinese New Year, but I don’t believe there will be much non-committed inventory available for them to book!
Limited bookings in the Light Halves & Piece market is in the $4.00 range with Chandlers about $0.10 higher. Combo Halves and Pieces are at $3.65 with smaller material 5- 10 cents higher than the H&P market. Inshell Jumbo Hartley’s are still trading around the $1.60 level with Jumbo/Larges at $1.55.
Inshell Chandler Jumbo/Large are on both sides of $1.90 with Howard’s and Tulare’s 5-10 cents less.
If the crop comes in at 490,000 tons, the industry has shipped 55 percent of the crop through December. This is 5 percents less than I first predicted. However, I believe January will be another record month and right now, my forecast for shipments through August is 490,000 tons, about the same or maybe a little less that the crop.
This should make for another great year for California walnuts that is if we do not experience another world financial crash.
Let me know if you have any questions.
Kind regards,
Pete
Monday, January 10, 2011
Weekly Cashews Update
Jan 8, 2011
Cashew market continued to be quiet in week 1 of 2011 – for more than one month now, there has been very little volume traded to USA & Europe although there has been reasonable business with other markets. During the last two weeks, some processors from Vietnam and India sold W320 to USA & Europe at lower levels (around 3.65 FOB) because they do not have prior sales and need to move stocks before new crops start in March.
Despite the limited buying interest, most processors from both origins were quoting more than 15-20 cents higher. They do not have much to sell for first quarter and they are not willing to sell at lower prices for second & third quarter because (a) RCN prices have been high in the fourth quarter (b) processing costs are going up in first quarter (c) there is uncertainty about RCN pricing (and movement) in the second quarter. They do not want to sell short unless they get a reasonable premium to cover high costs (and any supply side problems).
Uncertainty of demand trend makes buyers wary as well. They do not want to be carrying long positions at prices which are the highest ever and then see a dramatic drop in demand. At the same time, they need to buy at regular intervals to keep pipeline filled to the bare minimum. This hand to mouth buying will continue to provide floor to the market till we reach a “tipping point”.
There is no change in fundamentals. Supply will continue to be tight in first half – tightness will ease slowly in second half if 2011 crops are good (or at least normal). Normal supply will be restored only if 2011 crops are at least normal AND 2011 demand is dramatically reduced. Steady demand is expected in Asia in 2011 but there is uncertainty about USA & Europe. Some people expect a double digit decline in 2011 due to the high prices but this seems unlikely given that prices for almost all nuts (in fact, almost all food products) are high. Base demand for snack nuts will remain although promotions & special offers may be affected. Unless something dramatic happens on demand or supply side, we expect market to move with 3.75 FOB as middle of range for most of 2011.
If buying from USA & Europe is slow in first two quarters, we will see slight easing of prices when the new crops are being harvested. This would mean processors will be less inclined to pay high prices for RCN (even if kernel prices do not ease, processors will have to target for lower RCN prices to compensate higher processing costs). If 2011 RCN prices are reasonable then we will see further easing of prices in the second half. On the other hand, if there is steady buying with some quiet periods – like what we have seen in the last two quarters – processors will have to buy RCN even if prices are high. In that case, there will be little chance of prices coming down much for most of 2011.
In next few weeks, we can expect bouts of volatility depending on news, reports, rumours about the crops – it will be difficult to separate chaff from the grain. By Apr/May we will have a better picture of supply + demand and then it will be possible to make a realistic guess of market trend. Till then, market will continue to be delicately poised and all factors (including external factors) will have to be watched closely.
Regards,
Pankaj N. Sampat
Cashew market continued to be quiet in week 1 of 2011 – for more than one month now, there has been very little volume traded to USA & Europe although there has been reasonable business with other markets. During the last two weeks, some processors from Vietnam and India sold W320 to USA & Europe at lower levels (around 3.65 FOB) because they do not have prior sales and need to move stocks before new crops start in March.
Despite the limited buying interest, most processors from both origins were quoting more than 15-20 cents higher. They do not have much to sell for first quarter and they are not willing to sell at lower prices for second & third quarter because (a) RCN prices have been high in the fourth quarter (b) processing costs are going up in first quarter (c) there is uncertainty about RCN pricing (and movement) in the second quarter. They do not want to sell short unless they get a reasonable premium to cover high costs (and any supply side problems).
Uncertainty of demand trend makes buyers wary as well. They do not want to be carrying long positions at prices which are the highest ever and then see a dramatic drop in demand. At the same time, they need to buy at regular intervals to keep pipeline filled to the bare minimum. This hand to mouth buying will continue to provide floor to the market till we reach a “tipping point”.
There is no change in fundamentals. Supply will continue to be tight in first half – tightness will ease slowly in second half if 2011 crops are good (or at least normal). Normal supply will be restored only if 2011 crops are at least normal AND 2011 demand is dramatically reduced. Steady demand is expected in Asia in 2011 but there is uncertainty about USA & Europe. Some people expect a double digit decline in 2011 due to the high prices but this seems unlikely given that prices for almost all nuts (in fact, almost all food products) are high. Base demand for snack nuts will remain although promotions & special offers may be affected. Unless something dramatic happens on demand or supply side, we expect market to move with 3.75 FOB as middle of range for most of 2011.
If buying from USA & Europe is slow in first two quarters, we will see slight easing of prices when the new crops are being harvested. This would mean processors will be less inclined to pay high prices for RCN (even if kernel prices do not ease, processors will have to target for lower RCN prices to compensate higher processing costs). If 2011 RCN prices are reasonable then we will see further easing of prices in the second half. On the other hand, if there is steady buying with some quiet periods – like what we have seen in the last two quarters – processors will have to buy RCN even if prices are high. In that case, there will be little chance of prices coming down much for most of 2011.
In next few weeks, we can expect bouts of volatility depending on news, reports, rumours about the crops – it will be difficult to separate chaff from the grain. By Apr/May we will have a better picture of supply + demand and then it will be possible to make a realistic guess of market trend. Till then, market will continue to be delicately poised and all factors (including external factors) will have to be watched closely.
Regards,
Pankaj N. Sampat
Monday, January 03, 2011
Weekly Cashews Update
NOV 6, 2010
After a quiet beginning, week 44 saw further increase in cashew prices from middle of the week (in the last 2 weeks, prices have moved up by 6-7%). Business was done for W240 from 3.85 to 3.95, W320 from 3.45 to 3.55, W450 from 3.25 to 3.35 FOB. Most of the business was with USA but other markets also bought some quantities. Bulk of the sales were for Nov-Jan shipments but some business was done upto Mar/Apr. In the domestic market, prices for brokens have started moving up again.
Tanzania RCN prices moved up further to approx US$ 1625-1650 in this week’s auction. Indonesia RCN prices were steady around US$ 1500-1525 but yields are lower. Initial indications for Mozambique RCN are over US$ 1200 but shipments will not be possible before Jan. Brazil situation is unclear and worrying – arrivals are slow, RCN prices are high and processing is much lower than normal. If there is improvement, this will be known only in Jan.
For the next 2-3 months, we can expect market to remain firm because of Chinese demand for their New Year + Indian demand for the winter/marriage season + high RCN prices + limited replacement availability.
Traditionally, processing in India & Vietnam is low in first quarter – in 2011, this will be further reduced by lower availability of RCN from the 2010 crops. So a drop in demand in first quarter may not have large impact on the prices immediately. If the drop in demand extends into the second quarter and is accompanied by normal weather and good prospects for 2011 crop, we might see softer market and lower prices from the second quarter.
Asian markets are showing growth in usage despite the increase in prices (as Asian markets are a spot market, price movements are reflected in retail prices much faster than in the organized markets in the West). The impact of the higher prices in USA & EU is a big question mark. One view is that there could be a 20-25% decline in usage. If this is true (and this will be known only in second quarter), there might be a big drop in prices when the 2011 crops start and this will change sentiment of the market. Another view is that since the prices of other nuts are also high, decline may not be that much. If the decline is in single digits, we feel that there will not be any big decline in prices UNLESS the 2011 crops are very good. And if the trend of short period buying continues in first few months of 2011, the prices will remain at current levels and this will support RCN prices when 2011 crops start.
The long term outlook depends not only on the impact of higher prices on demand but also the state of the 2011 crops. Until there is some definite and clear indication on these two important factors, market will continue to be delicately poised reinforcing the need for caution. The pattern of buying (frequency and volume) + general food (especially nuts) price trends + financial market trends are other factors to be watched closely.
To sum up, we expect continued firmness for the short term (3 months) + volatility in the medium term (3-6 months) + uncertainty about the long term (6-12 months).
Would appreciate your comments on market situation, views on trend and prospects for coming weeks / month and any other news or information
Regards,
Pankaj N. Sampat
After a quiet beginning, week 44 saw further increase in cashew prices from middle of the week (in the last 2 weeks, prices have moved up by 6-7%). Business was done for W240 from 3.85 to 3.95, W320 from 3.45 to 3.55, W450 from 3.25 to 3.35 FOB. Most of the business was with USA but other markets also bought some quantities. Bulk of the sales were for Nov-Jan shipments but some business was done upto Mar/Apr. In the domestic market, prices for brokens have started moving up again.
Tanzania RCN prices moved up further to approx US$ 1625-1650 in this week’s auction. Indonesia RCN prices were steady around US$ 1500-1525 but yields are lower. Initial indications for Mozambique RCN are over US$ 1200 but shipments will not be possible before Jan. Brazil situation is unclear and worrying – arrivals are slow, RCN prices are high and processing is much lower than normal. If there is improvement, this will be known only in Jan.
For the next 2-3 months, we can expect market to remain firm because of Chinese demand for their New Year + Indian demand for the winter/marriage season + high RCN prices + limited replacement availability.
Traditionally, processing in India & Vietnam is low in first quarter – in 2011, this will be further reduced by lower availability of RCN from the 2010 crops. So a drop in demand in first quarter may not have large impact on the prices immediately. If the drop in demand extends into the second quarter and is accompanied by normal weather and good prospects for 2011 crop, we might see softer market and lower prices from the second quarter.
Asian markets are showing growth in usage despite the increase in prices (as Asian markets are a spot market, price movements are reflected in retail prices much faster than in the organized markets in the West). The impact of the higher prices in USA & EU is a big question mark. One view is that there could be a 20-25% decline in usage. If this is true (and this will be known only in second quarter), there might be a big drop in prices when the 2011 crops start and this will change sentiment of the market. Another view is that since the prices of other nuts are also high, decline may not be that much. If the decline is in single digits, we feel that there will not be any big decline in prices UNLESS the 2011 crops are very good. And if the trend of short period buying continues in first few months of 2011, the prices will remain at current levels and this will support RCN prices when 2011 crops start.
The long term outlook depends not only on the impact of higher prices on demand but also the state of the 2011 crops. Until there is some definite and clear indication on these two important factors, market will continue to be delicately poised reinforcing the need for caution. The pattern of buying (frequency and volume) + general food (especially nuts) price trends + financial market trends are other factors to be watched closely.
To sum up, we expect continued firmness for the short term (3 months) + volatility in the medium term (3-6 months) + uncertainty about the long term (6-12 months).
Would appreciate your comments on market situation, views on trend and prospects for coming weeks / month and any other news or information
Regards,
Pankaj N. Sampat
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