Cashew prices firm up on lower global output

Vietnam, Brazil, Indonesia may witness fall in crop
Ground realities
Some crop damage has been reported from the major producing regions such as Kerala and Mangalore due to incessant rains.
Firm price trends likely to persist till the end of the current year
Our Bureau
Kochi, June 16 Cashew prices have begun to firm up on projections of lower production in Brazil, Vietnam and Indonesia this year.
Raw nut production
Raw cashew nuts production for 2007-08 is expected to be lower by 20 and 10 per cent in Vietnam and Brazil respectively, while the Indian crop is expected to be normal, the Cashew Export Promotion Council of India (CEPCI) has pointed out.
Preliminary indications are that shortfalls are expected from the Indonesian crop as well.
Increased global cashew consumption and greater consumption from India are also expected to contribute to the firm price trends.
Some crop damage has been reported from the major producing regions of the country such as Kerala and Mangalore due to incessant rains. Prices, which had been reigning low for close to a decade have begun to climb back to the peaks of 1999.
Record price
F.o.b prices of cashew grade W-320 have risen to $3.04 a pound in April, closing in on the record price of $3.16 a pound attained in August 1999.
Prices had subsequently touched a low of $1.66 a pound during March 2003. The price spurt of 1999 was mainly contributed by rising domestic and global consumption, CEPCI said.
Rise in acreage
However, there has been significant growth in area and production of cashew since then. The area under cashew registered a growth of 4.2 per cent to 8.5 lakh hectares and production grew by eight per cent to 6.2 lakh tonnes in 2007-08, as against the previous year. This is far ahead of the 7.06 lakh hectares under the crop and 5.2 lakh tonnes production of 1999.
On the processing front, import of raw cashew nut this year was reported to be 6.05 lakh tonnes and the kernel exports stood at 1.14 lakh tonnes. The domestic consumption is also expected to be higher this year on account of increased disposable income of the people and better health awareness. Though raw cashew nut imports have risen this year, kernel exports have dropped due to the sharp appreciation in the value of the rupee.
Trend to persist
Going by the present trends in production, consumption and growing purchasing power in the hands of the consumers, industry sources were optimistic that the firm price trends would persist to the end of the current year and future trends would become evident with the next crop.