1- Vietnam crop: the crop continue in other center
provinces (a bit further North), but it is small crop and price is getting
higher than before. Dry raw seed traded around 24,000-25,000 VN$ per kg for 30%
outturn (Vietnam calculate %). Comparing to African seeds, price is still more
attractive than African seeds because transportation cost in Vietnam has gone
up very much. But the disadvantage is that you have to pay money up front, full amount,
while with African seeds you can only deposit 10% to open L/C and only pay
after
45-60 days when cargo arrive.
I think lack of finance is the main reason for raw seed
price is reasonable in Vietnam.
But in general, price is up 25-50 USD per tons if we
compared with same quality as before.
2- African crop:
- Ivory Coast: it is raining and quality is getting down.
I think up to now the IVC government has been successful keeping the minimum
price. With strict control like cancel export license and cancel local buying
license, they remain same minimum buying price although out turn is less. There
has been few meeting between IVC cashew board and exporters. Exporters try to
convince the IVC government that out turn is now less (46 lbs) compared to
before around 49 lbs so minimum price should revise. But IVC does not agree,
they still remain same minimum price. Indian and Vietnam have been waiting and
hoping for price to come down, but they cannot wait for too long, so India and
Vietnam start to pay the price, raw seed begin to move up. This year, raw seed
is moving more to India than to Vietnam.
Shipment from IVC is quite slow because of congestion.
Formality is also very slow. Exporters complain that everything is slowdown in
IVC, very difficult to have containers, very difficult to have space on the
vessel, trucks have to wait for so long to have space in warehouse....
In general they say crop is okay, but if they cannot ship
out fast, quality can be down as the rain is coming.
- Other origin: price also follow IVC price, so it is
going up too around 30-40 USD per tons. Most my medium raw seeds traders are complaining that
business is getting more and more difficult because big group of companies
entering the market and spoil the market, pushing them to take position.
3- Processing: monsoon season is coming, so sometimes
there is small rain, moisture will become higher from small/medium factories if
they face the rain. So during June, when there is more rain, I think quality
will be down from small/medium packers. Processing is getting better in Vietnam
because after harvest, workers will slowly returning to work.
4- Domestic market: Performance of LP is having problems. 1.75-1.78/lb fob level. Demand for LP is quite
good. I think in domestic market, price will be even up more by
end of May, because many exporters have over sold, so by end of June they will
need to cover to ship. Why exporters have over sold??? I think the main reason
is that they always sell based on current domestic market level. But when
buyers feel that price has reached the bottom level and begin to book many,
price will be up immediately. Exporters (traders) do not know about this, so
will get stuck. Only processors who have raw seeds in the warehouse can avoid
this problem.
Recently there are so many exporters who do not process
(exporters with just packing centers, who does not have a chimney in their
factories), they only buy from small processors, do some re-grading and pack in
their brand. There are too many of those, so competition is very tough.
5- Western market: by end of April and early May. Market
is more active as western buyers are buying. During these days, Western market
continue to buy more May and June shipments, so price is moving up.
At current market of raw seeds imported from Africa,
packers will need to sell higher than this level to make money.
It seems like market is on the up side, especially LP from a high quality packer. If you have needs for forward contracting, please contact us and let us know how we can help.
-Thomas Kim
