There was reasonable activity in the cashew market in the last two weeks and prices moved up a few cents. Indian processors sold W240 around 2.65/70, W320 from 2.10 to 2.20, W450 / SW around 1.90/95 FOB. Most of the business was with USA for Mar-Jun shipment but Europe & other markets also participated to some extent.
There was some interest – again, mainly from USA - for forwards but buyers were not prepared to pay premium that the reliable packers wanted. Indian domestic prices for Splits & LWP moved up smartly.
Vietnam processors who had been selling during SH Feb & early Mar seem to have withdrawn this week.. There are reports – unconfirmed – that crop in some areas there may be adversely affected. We feel that it is too early in the season to talk crop figures but it is a fact that RCN prices are quite firm despite limited finance availability for most processors.
Benin will start shipping RCN next week and IVC will follow after couple of weeks. As reported earlier, prices eased from the high levels traded in late Jan/early Feb but this week, offers inched up a bit from the lows of end Feb/beg Mar. Rough indications are around 775 for Benin and 650 for IVC.
It seems that some kernel buyers are willing to cover some quantities, probably because they feel downside from current levels is limited… Also, people who sold in SH 2008 for 2009 deliveries are “in the money” and can afford to pay higher levels for assured supplies (obviously they will delay purchases as much as they can until market shows distinct and sustained firmness).
Although quantities involved may not be large, this will lend some support to the market. Plus (despite tight / reduced financing and low confidence), current lower levels may lead to some inventory building too.
In next few weeks, processors will have to make purchases – they cannot wait too long – because (1) they need shipments to be made in April to keep factories running & meet delivery commitments (2) RCN quality and yields will deteriorate (esp in West Africa) as season progresses.
Overall, it is expected that market will move in a narrow range with a steady to firm undertone for next few weeks. Although there may not be much activity for shipments beyond 3-4 months, premiums for forwards will be higher than normal. Gut feeling is that prices in second half will be higher than what we are seeing now – extent of increase will depend on (1) consumption in FH 2009 (2) economic developments (3) confidence in contracting for late 2009 / FH 2010 deliveries.
