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)