Cashew Kernel Price Today

Cashew Kernel Price Today...

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Thứ Hai, 1 tháng 5, 2017

INDIA'S CASHEW MARKET REPORT - 01 MAY 2017

May 01, 2017



In our last market report at beginning of 2017, we said that Cashew market seemed to be in a dark tunnel – 4 months later, there is still no light to show the end of the tunnel.

The expectation that prices would remain in the 4.00-4.25-4.50 range for most of the year has been belied.  Beginning the year at 4.40-4.50, market has been going up a notch every few weeks.

In the last 2-3 weeks, prices have gone to highs never seen before. Even broken grades which were stagnant for several months moved up sharply. There has been good demand from all markets for May to July shipmnts with some buyers covering some quantity for later positions also.

Current levels are W240 from 5.35 to 5.50, W320 from 5.00 to 5.15,  W450 from 4.75 to 4.85,  Splits from 4.00 to 4.10, Pieces from 3.40 to 3.50 FOB

Kernel buyers have not been buying long spreads expecting prices to soften – they have been buying every few weeks for 2-3 months ahead. This has meant that someone is always in the market and this is keeping the market firm.

The gradual and continuous price increase of 10-20 cents per month since Dec 2016  is causing concern.  How long will it continue ?  What impact will it have on usage and when ?

There was a feeling that the price increase from 4.00-4.20 in July 2016 to 4.90-5.00 in Oct 2016 would lead to a big drop in demand.  By end of 2016 (in less than 2 months) market fell to 4.40-4.50 and it seemed that this was happening..  But, in the last 4 months market has taken a U-Turn and surpassed the previous peak of 5.00 seen briefly in Oct 2016.

Information so far about the 2017 crops :

1) Cambodia & Vietnam crop are definitely adversely affected -  some people say shortage could be in the range of 35 to 40% (approx 125-150,000MT).

2) African crops seem to be OK but kernel yields are lower. Usual logistic issues continue. Strong competition has meant that prices have been going up since beginning of the season.

3)  Indian crop is OK but not much of a factor for kernel exporters as almost all of it is bought by small regional processors who cater to domestic market.  Indian crop is only important when it is short because the small regional processors will need more imported RCN reducing the availability for exporting processors.

Current RCN prices range from US$ 1900 to US$ 2200 C&F India / Vietnam depending on origin, quality and business terms. These levels are about 30% higher than same time last year and about 10% higher than beginning of 2017 season.

Although this is peak collection period and kernel yields in new arrivals are reducing,  RCN prices continue to move up.   If RCN situation does not improve and prices do not come down in May, second half will be very difficult.

Here is an overview of trend of average prices since 2014 :

Year                     RCN                     KERNELS

2014                    US$ 1200-1300     US$ 3.30-3.40
2015                    US$ 1350-1450     US$ 3.40-3.50
2016                    US$ 1700-1800     US$ 4.30-4.40
2017 JAN-APR  US$ 1900-2000     US$ 4.70-4.80

NOTE : In cost terms, each move of US$ 100 per MT of RCN = approx. US$ 0.20 per lb of kernels.

In the last 18 months, Cashew market has gone up 3.55-3.70 to 5.00-5.10. A gradual rise of over 35%  with occasional small dips apart from a big 10% drop from 5.00 to 4.50 FOB (short lived) in Dec 2016.  During these 18 months, each spurt has ended at a higher level. When and what will be the tipping point which will reverse this  trend ?

Market movements are always uncertain but the current situation is scary !!

Pankaj N. Sampat
Source: SAMSONS TRADERS

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