Cashew market has been very quiet for the last 3-4 weeks and prices have come off a few cents. Stray business done for W240 around 2.75, W320 around 2,30 and W450 around 2.05 FOB for Feb/Mar/Apr shipments from India. Most of the processors are not willing to sell at these levels & selling interest is limited to few small & medium processors. There are reports that Vietnam is willing to sell at slightly lower levels
RCN prices have come down in last 2-3 weeks e.g. Benin which was originally offered around 925 is now available at 850 C&F, Nigeria which has traded above 700 is now offered at 650 C&F. There is not much buying interest because (1) parity is higher than current kernel prices (2) harvest in three main origins is just beginning and processors want to sell how things develop in coming weeks (3) kernel market is dull and slow.
In the main markets – USA & EU – buyers have been using up inventories to minimise funding as credit lines are reduced and buying limited quantities to cover couple of months requirement. So the pipeline between origin & consuming countries is lean. Since supply seems to be normal, this should not be a problem but if there is any disruption or delay in supply OR if there is need for any large fresh contracting, it could mean some difficulties in keeping the chain fed properly.
From all that we are seeing & reading, 2009 is going to be a difficult year for all businesses and cashew cannot be an exception !! As we have said before, current kernel prices take into account all negatives – reduced usage (actual and projected), reduced financing capacity, economic situation, etc.
Only reason for a further decline in prices could be further big reduction in usage & prolonged inactivity in kernel market in Mar-May which could mean less RCN buying interest leading to decline in RCN prices. Any improvement in economic sentiment or lower than expected decline in usage will mean firmer market in the second half.
To take care of this reasonable possibility, reliable sellers & buyers will have to build a reasonable (larger than normal) cushion in their pricing decisions & selling / buying strategies
