There was very little activity in the Cashew market in Week 35. Some business was done forW240 around 3.55 and W320 around 3.30 FOB (some buyers / markets paid few cents higher for good quality, guaranteed supplies). Splits were traded around 2.80 FOB. There was steady domestic demand in India for large wholes & brokens – prices were higher than international market.

From Vietnam also, activity was limited but some processors were selling few cents below India. Brazil continues to be quiet – apparently they do not have much to offer from old crop and do not seem to in hurry to sell from the new crop as arrivals are slow – clear picture of crop will be available by Nov.

Spot RCN market in India is firm – small processors (catering to seasonal domestic demand) are paying high prices for small lots of ready goods. Indonesia RCN is being offered around 1500 dollars but buying interest is limited as there is a big disparity with kernel prices. There is a feeling that prices may soften end Sep/early Oct when arrivals pick up (unless kernel prices move up in the meantime). In East Africa, everything looks okay on weather front but it is too early to talk about crop prospects, price levels, shipment commencement.

Kernel outlook for next few weeks seems to be firm. Limited replacement RCN availability + steady demand from one market or the other will mean prices will continue to be high. Processors will be content to sell small volumes at a time. Similarly, buyers will be inclined to buy “as needed” because at current levels (a) they will make losses if they are covering short positions (b) risk appetite for going long is limited in view of uncertainty about future demand.


Long term outlook continues to be cloudy. Inventories seem to be low across the chain due to short crops and hand-to-mouth buying. As discussed earlier, tightness will ease only if supplies increase substantially (this can happen only in mid 2011) or usage / demand falls dramatically (nobody knows when – and if – this will happen). Apart from price of cashews, other factors like prices of other nuts + consumer spending on snacks (and snack nuts in particular) + general economic situation will have a significant impact on usage/demand of cashews. High prices may not necessarily mean big drop in usage if other factors are positive.

This situation will make long term contracting difficult – for buyers because they do want to be caught with long positions at high levels which they cannot move if demand falls and for processors because they do not want to have large forward commitments even at current high levels because the next big RCN procurement possibility will only be in second quarter 2011.

So, although one can have a legitimate doubt about sustainability of the current price levels for the long term, there is very little reason to expect a change in the current range and firm trend in the medium term.

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