Cashew Kernel Price Today

Cashew Kernel Price Today...

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Thứ Sáu, 12 tháng 5, 2017

Aldebaran World's Cashew Update

10 May 2017

Much is happening in the cashew market: Raw cashew nut crop from the Ivory Coast isn't good, however the crop from Guinea Bissau looks well.  Vietnamese prices seem to be rocketing out of control, everything is ruled by day-to-day decisions. The market fully depends on a few variables: On the raw cashew nuts situation, on the growing demand of consumption of cashews, on the worldwide lack of kernels stock and on the psychology of the buyers and sellers.  Please find below an in-depth update of the cashew situation, written by:

Raw Cashew Nuts
For the coming period we are depended on the West-African, Vietnamese and Cambodian crops.

The Ivory Coast (IVC) crop is not a good crop, the quality of the crop is poor and there is not a lot of outturn like 49-50 lbs as usual. The IVC exports from Abidjan is expected to be around 500.000 mt compared to a normal crop of 670.000 mt. Seed traders are stating that tonnages might be short between 5-10% and not up to 25%.

Since April, many cargoes arrive in Abidjan with low outturn like 44-46 lbs and contrary to the arrivals in Vietnam of very good quality between 49-51 lbs. The drying of the raw cashew nuts (RCN) will improve the quality. Many shipments have been delayed from IVC due to congestion in the port and many sellers have to pay increased freight rates.

The price of RCN of IVC increased to very high levels, some seed traders are offering IVC 46 lbs at $ 1,970 to $ 2,020 CFR Vietnam.

Some seed traders have stopped buying because they feel the risk of making money is getting higher, and there are some defaults reported or small traders who are asking additional money on existing older contracts.

Still good and reliable traders are still performing their contracts without any problems.
Nigerian, Ghana, Benin, Togo crops are reported to be okay, although market based rumours say that the crop in Nigeria is not good.

What is reported though about Guinea Bissau is all good news; the quality is easy to process. Processing will be for export for the period July through September which can follow up on the Vietnamese/Cambodian/IVC crops. Trades for GB at $ 2,100 around end of March up to $ 2,400 for now; same quality 53/220 just in 5 weeks.

The Vietnamese domestic market is very active on RCN prices increased from VND 42,000 to VND 53,000, even big processors prefer to sell the RCN instead of shelling it.

The crop in Vietnam is nearly coming to its end, though Cambodian seeds are still arriving in small quantities though! In both these countries crop will finish soon around end of May 2017.

In India there is still good demand for afloat raw seeds, IVC 48/47 lbs outturn traded at $ 2,025 per lbs CFR. In Kerala, Maharashtra, Andhra Pradesh and Orissa apparently crop reported to be between 1-15% below earlier reports.

There is still some confusion on the introduction of the Goods and Service tax in India, shellers need to pay this tax on importation of RCN and will only get these back when kernels are exported, which could take up to 3 months affecting everyone’s cash flow.  Also which tariff is being used, some say 5% others 18%.

What is happening in Vietnam?

The prices seem to be rocketing out of control, without any reasoning.

It confirms again that total buying activity has changed now to a maximum of a 3-month period spread. Also that there is no consensus about what the total market is doing. Everything is ruled by day-to-day decisions, and we think as Aldebaran it is caused by the non-existence of any carry-over of the previous periods. In addition to this, the constant bad news of crops not being successful, bad  quality and lower yields altogether causes this crazyness.

Mainly demand is up as well, due to the economy growing again all over the world, but of course in the last years the weather has been a major factor how crops come out. This will be a big factor the coming years as well.

During March/April many buyers visited Vietnam and were under the impression that things were not that bad, but it soon became clear that the crops in Vietnam/Cambodia and IVC were very much below par. A definite start for the market to react and prices started to gradually increase first of all with few cents, but recently sellers have realized most consumer buyers were short and dealers were putting the pressure on in buying in this upward trend. Just recently it seems that everyday market increases with a minimum of USD 00.05 per lbs.

Some importers of RCN are speculating on the uptrend as well, making life more and more insecure with regards to prices in the near future, and far future nobody seems to know what will happen.
European buyers started this trend, and just recently also the USA buyers started to buy at the higher levels.

What will happen in the coming months? Based on the current RCN prices, shellers are making decent to good profit margins! Everybody thinks prices will only increase, but it seems nobody remembers the period 2008-2009 when prices fell heavily.

Following dangers:
  1. Non-performance of cheaper contracts on RCN as well as kernels.
  2. Increased demand on cheaper grades like LBW/SW/DW.
  3. Increased quality issues due to mixing and playing with percentages of blemished/scorched kernels into white kernels, hardly any offers for these grades – which is a symptom!

We as Aldebaran traded business at levels below:

Origin Vietnam
  • W240: 5.40 - 5.45 (there is still offer as processors use new crop seeds with big nuts)
  • W320: 4.98 - 5.15 (supply is okay)
  • W450: 4.85 (not much offer and not much demand for this grade)
  • WS: 3.95 - 4.20 (not much offer)
  • LP: 3.40 - 3.60 (not much offer)
  • SP: 2.80 (not much demand and there is still some offer but poor quality, good quality lot was well sold)
Origin India

Better quality packers
  • W240 at USD 5.50 per lb FOB
  • W320 at USD 5.05/5.10 per lb FOB
  • WS at USD 4.10/4.20 per lb FOB
  • LP at USD 3.60/33.70 per lb FOB
Good acceptable medium packers
  • W240 at USD 5.40/5.35 per lb FOB
  • W320 at USD 5.00/5.05 per lb FOB
  • WS at USD 4.10 per lb FOB
  • LP at USD 3.60 per lb FOB
Year                           RCN                  KERNELS
2014                       $ 1,200 - 1,300      $ 3.30-3.40
2015                       $ 1,350 - 1,450       $  3.40-3.50
2016                       $  1,700 - 1,800     $  4.30-4.40
2017 (Jan-Apr)    $  1,900 - 2,000     $  4.70-4.80
NOTE : In cost terms, each move of $ 100 per mt of RCN = approx. $ 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%.

Aldebaran’s advice:
  • The bull is in the market, which basically means that this market will have to come down at a certain time, when we feel end of July/August 2017.
  • Up to that just buy what you need and negotiate and negotiate instead of accepting the prices given so easily.
  • At a certain time the game of RCN dealers and shellers and brokers will come to a halt, and then we can expect a sharp decline.
  • This is an all-time certainty, and cannot be avoided – Dealers will stop buying at these high levels at a certain time and then the rutt will set in.
Source: Aldebaran / Nutnose

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