Cashew traders waiting for new crop

Cashew market was quiet this week – not much change in prices i.e. W240 from 3.10-3.15, W320 from 2.80-2.85, W450 from 2.55-2.60 FOB but some packers sold W320 at slightly lower levels. Prices in domestic market also came down a bit in last two weeks

Spot RCN prices (resale) are high but the buying interest is limited as kernel market is quiet and processors want to see how new crop prices open. There are some indications that Vietnam and West Africa prices may not be as high as initially expected but realistic ideas will be available only end Feb/early Mar… Even after that there might be some swings during Mar/Apr depending on (1) news & rumours (2) kernel activity.

Indian RCN prices will continue to be out of reach of exporting processors due to the strong demand from unorganized processors in growing areas (catering to regional demands).

Kernel traders have been buying sporadically – picking up some quantities when they see lower offers and paying higher only when they absolutely have to buy to cover delivery needs. Although inventories are tight at all stages, very few are willing to build long positions at current levels – they prefer to work on “buy as needed” policy

If RCN prices open at reasonable levels, processors will buy first to cover sales and also make new offers which could lead to softness in prices in second half. On the other hand if RCN prices open high – which is likely only if there is strong kernel demand in Mar/Apr – then there is not much chance of decline in prices for most of the year

Supply side is more or less well defined – overall there will not be much change as increases in some origins will make up for shortfalls in others.. But it is difficult to judge how demand will evolve in the main importing regions and this will have an important impact on price movement.