Monday, September 12, 2011

Weekly Cashews update

SEP 10, 2011

Week 37 was the sixth consecutive quiet week in the Cashew market. Despite this quietness and sales at lower levels by some processors in Vietnam, most processors in India (and many in Vietnam) are not willing to reduce their prices. Business has been reported from Vietnam for W240 around 4.75 and W320 around 4.40 FOB. Prices from India for W240 around 4.85-4.90 and W320 from 4.55 to 4.60 FOB – stray business was done by some processors. This wide range of prices is distorting the market and making buyers wary of taking on large positions although they are picking up the lower offers.

In the Indian domestic market, there was limited business by a few processors but in general, market continued to be quiet. Wholesalers and stockists seem to be waiting for signals of retail offtake at the beginning of the peak consumption season before taking on additional volume.

On the RCN side, there are some stocks in Guinea Bissau but the stockists are holding on for high prices. The upcoming Southern crops are expected to be normal – although there are reports that adverse weather may affect the crop in some regions of Indonesia. Current price in Indonesia is very high – approx US$ 2000. The next six weeks will provide a reasonable idea of the crop prospects and prices in Indonesia & Brazil. Tanzania prices will be known by end Oct/early Nov. Mozambique RCN prices will not be known until Dec.

The market is in stalemate mode. Activity in the kernel market in the next 6-8 weeks will determine what direction the market will take.

If the kernel demand before end of Oct – either India/Asia or USA/Europe – is good, prices will remain in the current range. If demand in BOTH regions is normal to good, prices could move up a bit. In either case, RCN prices will not decline (since availability till next March is limited). Consequently, a change in price trend will be possible only in second quarter of 2012 provided Northern crops are good and supply becomes comfortable.

On the other hand, if kernel demand in both regions is slow for the next six weeks, prices could start drifting lower from end of Oct – more so if the Brazil crop is good. If this happens, shellers will be slow in buying, leading to lower RCN prices. And that will mean the year will end with higher than normal inventory – most probably in the form of RCN – with a potential of further downward pressure on prices if the 2012 Northern crops are good or even normal.

It is impossible to judge what will happen in the medium term, especially in the current situation when there are so many economical and financial uncertainties in USA & Europe. But the general feeling is that demand in Sep/Oct will not be so low as to trigger a price decline immediately. Indian demand may not be strong but since India is predominantly a spot market, there will certainly be steady buying during the peak consumption period upto end Dec / early Jan. Following the trend of short period buying, USA/Europe will also have to buy some volume in the next 6-8 weeks for late 2011 / early 2012 shipments. These two demand side factors will support the market and trend will change only if 2012 crops are normal to good. Only a dramatic fall in kernel buying in Sep-Nov could lead to lower prices before that – and that is possible only if there are some big negative developments in USA and Europe economies / financial markets.

Would appreciate your comments on current market situation, your views on trends & prospects and any specific news or information

Pankaj N. Sampat

Walnut Market Update September 11, 2011

R.L. “Pete” Turner

NASS’s official 2011 walnut crop “objective” estimate of 485,000 tons was a surprise to many in the industry. It came up 38,000 tons short of the Packers “subjective” forecast of 523,000 tons set in late July. Never the less, it is still the second largest walnut crop in history, 18,000 tons less than the record 2010 crop.

Growing conditions were similar to last year, as the orchards received adequate chilling hours, above average rain and moderate temperatures, all ideal for a good and quality walnut crop. However, again like last year, the crop is at least two weeks late and most packers will not go into production until the last week of September.

NASS’s survey data indicates the average nut set per tree is down 18 percent compared to last year. However, the nut sizes appear to be larger than last year, so hopefully, we will have more large and jumbo walnuts available than we did last season.

Listed below is my guess-a-mate for the major varieties tonnage, which is based on the tree nut count and nut sizes.

Variety 2010 crop 2011 crop Difference

Chandler 209,000 198,000 (11,000)
Hartley 70,000 65,000 (5,000)
Tulare 47,000 52,000 5,000
Howard 55,000 50,000 (5,000)

August walnut shipments were 19,597 tons, about the same as last year. This puts the 2010 crop total year shipments at 506,568 tons, 53,000 tons more than last year. Again, the market was driven by the record bookings from China/Hong Kong, Turkey/U.A.E and Europe. Exports sales accounted for 60 percent of the total shipments with domestic at 40 percent.

The 2010 crop carry-over is expected to be less than 40,000 tons. This coupled with the 485,000 ton crop gives the industry a total availability of 525,000 tons, 25,000 tons less than last year.

Right now, the next several weeks weather forecast looks good and grower harvest operations should go well. However, with a late crop, everything is compressed and the grower harvesting, the huller operations and walnut plant receiving and production facilities will all be highly challenged.


Pre-season bookings that started out very heavy in June have now dropped off slightly, however, with the opening prices coming out lower than most expected; new bookings will most likely be going full force by Monday.

Opening prices for Jumbo Hartley’s were set at $1.65, Chandler 70/30 Jumbo/Large at $1.75 and Regular Light Halves and Pieces at $3.85.

By the end of next week, we should know how the market will react to these prices; but my guess is that the new bookings will be very active at these levels. However, contracts for early shipments may bring a premium, especially on in shell Chandlers.

Please let me know if you have any questions or comments.

Kind regards,