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
Sunday, February 27, 2011
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
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