Nuts!

We have seen much the same as was reported last week, but some specific things to note.

Cashews

Tanzanian Seed is completely sold out and most packers are awaiting RCN from the Ivory Coast but there has been delays with early shipments. India is not eager to sell since the domestic market is robust and they are getting better offers which means they do not need to ship oversees. Prime Minister Modi has now been in power for 60 days and the changes have been remarkable to say the least. The fixed wages bill is part of Modi intense effort to create a viable strong middle class and it seems to working, India in a huge market and must start to be viewed in the same light as China when it comes to its domestic buying power.

Vietnam is much of the same with limited offers from quality packers, all the small packers are still of the market but the demand is starting to pick up and prices have strengthened again this week. In terms of its own Vietnamese crop this will only become available in March after the Tet holidays, so unlikely we will see an abundance of product till them, in light of that, the price we are seeing is likely to hold or go higher in the short term, where it goes when new crop comes remains to be seen, it’s 50/50 either way, but highly unlikely we will see any drastic drop. We are advising our clients again this week to book 2^nd QTR needs, it is wise to cover needs because the risk of a dramatic price drop is low as is a dramatic price increase.

Almonds

The bloom report is a few weeks away with weather once again playing a huge factor. Jan had record high temperatures but weather reports indicate some wet weather ahead which is so desperately needed. Also the addition of recent snow packs will help with the reservoirs. In terms of the political rulings, the supreme court threw out the case to overturn the ruling in terms of the Delta Smelt Fish which would have benefited almond growers, of course they are going to try again and will keep you posted.  

In terms of the next shipment report, we are being told there is now a renewed demand from Europe even with the weak euro and they have come back to the market to purchase against contracts. They have seen a silver lining, that even with a declining euro they need to bring in product and while mostly they brought in Standard 5 due to the growing US almond butter business they are getting there contracts of Standard substituted with NPS.

The continued strong US currency is a bit of a problem but put that against the huge growth of imports to India (+66%) it’s not going to make any real dent in pricing and we will continue to see these high prices for quiet sometime. The bloom report will be a critical factor going forward.

Pecans

We continue to see a price move up on Halves due to past Chinese buying. We don’t believe the pieces market to move much higher though.