Monday, April 28, 2014

Cashew Update

OK... so below is the latest update from

Vietnam crop: The major crop in Binh Phuoc has ended. Now crop is coming from other areas, but it is not big crop. Price of raw seed is stable. In some area, price is cheaper but mainly because of quality is poorer being end of crop (quality is always worse by end of the crop).

West African crop: There is also not much changing on the price of seeds. Price remain stable, IVC cashews 48 lbs still being offered around 900-920 usd/mt cnf Vietnam. Basing on the current low level of WW240 and WW320, Vietnamese buyers are not aggressive buying from West Africa.

Outturn is getting lower, so most sellers are offering at lower level for 46-47 lbs outturn instead of 48 lbs outturn.
IVC cashews: remain 900-920 USD/mt cnf for 48 lbs outturn.
Ghana: not much offer because IVC government stop border trading. Price idea for 47 lbs at 950 usd/mt cnf
Benin: 1050 usd/mt cnf for 47 lbs outturn
Nigeria: 770 usd/mt cnf for 47 lbs outturn.
Guinea Bissau offered around 1,100-1,150 usd/mt cnf for 52 lbs, but nut count is small around 220 nuts/kg

In general, Vietnam will need to buy a lot of more from Africa, but at this price level, buyers feel it is not attractive price. They need cheaper price to buy more raw seeds. IVC government is still trying to control price, up to now they seem to be successful, so seed price is not cheap (compared to kernel price WW320 around 3.05/lb fob level).

Processing: still good and will be better in May because more and more workers return to work as the harvest is going to be finished.

Vietnam domestic market:
There are still few rains, the air and the land will get higher moisture. Small/medium packers do not have system to control moisture, so quality is down now. From small/medium packers, cashew kernel will tend to be softer (moisture is higher) and color is a bit more yellowish (not as white as before).
WW240 price is down because supply is better than demand
WW320 price is stable or just down a little bit.
WW450 price is down a bit
WS price stable
LP price is up very much because demand is good.
SP: not much demand because of foreign admixture in SP from Vietnam.

China market: In March, China has bought good volume from Vietnam. They bought WW320 at around 7.3 usd-7.40 usd/kg. But later, Vietnam keep decreasing price of WW320. So people who covered WW320 before at high price are now selling WW320 at a loss of around 15-25 cent/kg. Basically they reduce buying WW320 from Vietnam. So Vietnam will have more pressure to sell WW320 to Western market. The weather is getting warmer, so consumption of nuts in China will be less. They will consume more during Autumn Festival in Aug/Sep

Most Chinese buyers complain that recently, the new government in China is trying to control corruption and government spending. It also affects cashew consumption.

Western market: As price is bit down, so we see business traded here and there. Sales seem to improve in most of the market: USA, Europe, Middle East….There is more buying interest in May, June
Price by grades:
WW240: price keep coming down. This year Cambodia seeds are bigger, so supply of WW240 is okay.
WW320: I do not see much down trend on WW320 because at this level, quite some small packer are working under profit, because they covered raw seed before at high price.
WW450: not much demand. I think price is down trend a bit
LP price is up, demand is quite good. I think it will continue to be up trend. Low price contracts might be getting delay….

Basing on raw seeds price in Vietnam (many had bought before at high price), basing on stable price of seed in Africa, I do not see much down trend of price of kernels. Sellers will resist selling low unless they have to. Supply of kernel for export will be more in May.

So during the next coming weeks there will be questions:
Will Western buyers buy more at this price??? If they buy more, price will be come stable or slightly up and down. I see quite many inquiry on WW320, seems that demand for WW320 is okay.
If Western buyers do not need much in May (demand not so good for WW240 and WW450 for May shipment), then Vietnamese shippers will have to sell at lower level. Quite some will be under profit.
Will West African raw seed be cheaper??? If it is cheaper, then Vietnam can sell kernels lower.

As for price of LP, since demand is good, so I think price will be up. Our inspectors are rejecting more quality of LP, because price is more expensive, so small/medium packers tend to mix more of lower grades into LP. We are putting more care and inspectors to control quality as the monsoon is coming, quality is down.

Please note that I see more buying interest for WW320 for May shipment. Current price level seems to be attractive.

It is certainly in your best interest to start looking for your bookings for Q3 and Q4.  After the "dust" settles, I do not believe that we will see these price levels for awhile.

-Thomas Kim

No comments: