Suffice to say the market is very strange and I will explain
why.
We have seen a price drop over the last few days and a
reluctance of offers from top quality packers but offers from medium/small
packers. We have also seen some good offers out of India which we haven’t seen
for a while.
Let’s start with RCN (Raw Cashew
Kernel) prices have spiked aggressively with worrying news of contract defaults
and rejecting of poor shipments. The high price has the smaller and midsized
packers “spooked” and in an effort to garner funds have been offering out
product for cheaper/losses in order to garner interest and capital in an
otherwise quiet time for purchasing to cover RCN costs.
Vietnam processing has become significantly more sophisticated and reliant of
machines (Insert Terminator joke here) which has created an increase in product
quantity by around 15%. Better shelling means more complete cashews, less
pieces but should drive the market even further down in price.
Why the sudden offers from India? China which has been the traditional big
buyer of India cashews has slowed down due to the Chinese Government clamping
down hard on importers smuggling cashews across the border (Jackie Chan is
slated to make this into a movie) without paying the duties and are holding up
imports. So the factories that were reliant on business as normal are now being
forced to look for other avenues to sell their product to.
So to summarize, high price of seed, high production in
Vietnam, big trouble in China has all contributed to the market moving down.
With the ease in pricing it would seem logical to come in and cover needs and
if no big movement happens then it’s possible that pricing will drop a bit
again. Even the pieces market has taken a little dip but nothing too exciting.
We feel that June/July the market will/may reach the bottom and when the season
starts again and demand from China in Aug/Sept will restart the price will
rebound to offset the price of RCN. Remember all the packers will tell you,
“Cashews are still the best priced nuts” and they are right.
Conclusion: Time to book out now.
Almonds: June 11th is the actual report so will
do a separate report when we have all the facts.
Pecans: Trading high, demand has slowed but most of the crop
is sold and come the season it should only climb more.
Pistachio: A few weeks I reported on problems with China
with US pistachios and it seems it’s also that same border issue, We are being
told by the growers that it’s not been a good crop and that in the short term
could cause a spike in pricing, but in the long term the growers must be
worried that once the deal is signed with Iran and the sanctions lifted they
are going to have real competition with Iranian pistachios and that could be a
cause of a real price drop which must get them nervous (though not as nervous
as Israel I would assume)
