Cashew Review: Steady market ahead

There was some more activity in the cashew market this week, mainly with USA but some sales to Europe and other markets as well.

But there was hardly any change in prices - business was done for W240 between 3.15 and 3.20, W320 from 2.90 to 3.00, W450 around 2.75 FOB. Most of the business was for nearbys but there were some sales upto Aug/Sep as well. Activity with Vietnam seems to be very limited - until pending issues are resolved and shipments pick up, new business is likely to be slow.

RCN prices from West Africa are steady. In some regions, growers & local traders are holding back but there does not seem to be any pressure for processors to increase buying speed as kernel market is not very active for forward postions.

Processors seem to be prepared to wait till they get shipments of product already purchased (shipments from IVC are very slow). Bulk of the IVC crop is still to be traded and trading in Bissau crop has just started. In general, quality seems to be okay but in some areas, there are reports of inadequate drying in a rush to sell. Unless kernel market picks up and that too for forward positons, there does not seem to be any need for processors to increase RCN buying prices.

On demand side, it seems buyers will continue to buy forwards whenever they see a dip in prices and nearbys depending on their delivery needs. This trend will continue till backlogs are cleared & shortfalls covered. This may take some time due to the big volumes involved in Vietam delays.

When and how this is resolved will have a significant impact on kernel availability in second half 2008. Once inventory & product flow is close to normal levels, buying strategy and price ideas will depend on new demand from roasters for late 2008 & early 2009 deliveries.

Overall, we can expect a steady market with reasonable activity around current levels for the next 2-3 months UNLESS there is a major disruption in supply or sharp rise in RCN prices (both seem unlikely).