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

Thursday, April 24, 2014

Update : Turkish Apricots

There's been more information regarding the Turkish apricot market.

The temperatures measured throughout Turkey during end of March has ranged from -6.9 C to 7.8C.

According to evaluation by Malatya Provincial Directorate of Agriculture on every region, the frost average is between 90% - 95%.  Across the province, the effect on fruit trees are considered "disaster".

Most exporters are expecting 2014 current crop to be 10,000 MT maximum.  With carryover from 2013, it will be less than 30,000 to 40,000 MT.  Normal crop size would expected to be at 100,000 MT.

The prices have skyrocketed within the last few weeks.  While we do remain hopeful, we are encouraging our heavy volume buyers to begin taking positions for Q3 and Q4 needs.  The main issue will not be pricing, but availability of the crop, as most of the current harvest is consumed in Turkish domestic market

Please contact us for contracting options and availability.

Thank you.

-T. Kim

Thursday, April 10, 2014

Turkish Apricots

The term "when it rains.... it pours" comes to mind.  Drought in CA, Flooding in Bolivia, and now...

Frost in Turkey
c/o Exporter in Turkey

The apricot market was very stable since the beginning of 2013/2014 season due to regular demand from the buyers, strong US$ currency against TL and stable raw material prices depending on the easy availability of apricots. The export prices of apricots were staying at the bottom levels where we have recommended all our buyers to cover up their needs at the subject attractive price levels.

Unfortunately, the situation of the apricot market changed completely few weekend ago due to very effective frost damage on new crop apricots. The night temperatures reported at Malatya were -5 C for Saturday night and -8 C for Sunday night. According to the first reports coming from the growing areas that more than 60%-70% of the new crop apricots are damaged over the weekend. We are expecting the damage to be even higher than 60%-70% levels...

The situation at the growing area should be investigated deeply after the fruit meets with sun during the day time. The damage level will be known better after checking every growing area individually. It is hard to estimate the new crop quantity under current conditions but having a crop with 50.000 m/tons of apricots should be considered an optimistic look to the market.

The carry over quantity from current crop to the new season will be known by May – June 2014. It is impossible to comment on the possible carry over quantity as it is going to be determined by the market’s situation in the coming weeks.

On the other hand, US$ currency decreased substantially against Turkish Lira on April 1, depending on the results of March elections in Turkey. The existing government increased it’s votes in comparison to the last elections therefore Turkish Lira gained value against all foreign currencies. Weaker US$ currency against TL is not a good news for the export prices of all dried fruits, therefore apricot market also effected in a negative way by the new currency levels...

We are not able to offer apricots to our customers under current conditions. We would like to watch the developments in the market during this week, investigate the real damage level on new crop apricots, check the raw material prices and currency to be able to calculate the best possible prices for our buyers. Obviously, the prices of dried apricots will increase dramatically in the coming days and the market will find a new base at higher levels for sure...

We will watch the market and keep you posted about the developments immediately. If you have any concrete inquiry for apricots, please share with us and we will do our best to prepare our special offers asap.

Basically, the only reliable information we currently have is "Uh Oh!!...".  The growers are trying to assess the damages, and until the dust settles, pricing/availability is up in the air.  We are awaiting for more reliable information before we can begin offering recommendations on contracting/purchasing

As always, please contact us if you have any questions.

-Thomas Kim