The cashew market, after some reasonable activity in the first half of November, remained by and large sluggish in the second half and during the previous week as well.

However, according to trade sources, there was some activity in W320 in the price range $3.80-3.95 an lb (fob) depending on packer and shipment position . Prices for other grades remained unchanged, and were as follows: W240, $4-4.20; W450 and SW320, $3.70-3.80; SW360, $3.50-3.60; SSW, $3.15-3.25; Splits and Butts, $3-3.15; Pieces, $2.80-3 all an lb (fob). But hardly any business had taken place in these grades, they added.

The domestic market was also quiet this week. China continued to be a steady buyer in Vietnam, buying at a few cents above the international market but the volume traded was not very big.

RCN market

The raw cashew nut (RCN) market was also nearly quiet, with small and medium processors buying Indonesian and Tanzanian RCN at $1,475-1,525 a tonne (c&f).

“Large processors have withdrawn, waiting to see some activity in kernels before making new purchases. Most processors in India and Vietnam do not have nuts to process after January and, hence, they may not be able to wait too long unless they are prepared to reduce or stop processing for a few weeks. This could lead to a situation when kernel availability is low even though RCN is available,” Mr Pankaj N. Sampat, a Mumbai-based dealer told Business Line .

Demand uncertainty, mainly due to external factors, continue to delay decision-making by the retailers, he pointed out. “Until they have some indication of consumer demand and how the economic/financial events evolve, they are reluctant to make any large purchases.”

Normally, he said, a fair amount of business is done in the last quarter for the first half of the next year. Prices might show a declining/increasing trend depending on supply (actual plus expected) and, yet, reasonable volume used to be traded in this period.

But “this has not been the case this year, as the clouds appear to be too thick. Shellers, sitting on high-priced RCN, are reluctant to reduce prices any more, probably because they have already come down by almost 20 per cent from the year's peaks, and it is too early to have an idea about the 2012 crops.”

Trading volumes

Even if prices come down another 5 per cent there is no certainty that the trading volumes will be big, because: (a) buyers are reluctant to take positions in view of uncertainty in demand and economic situation, and (b) shellers will be reluctant to sell too much because it is impossible to predict what can happen between now and March-April when the big crops start coming in, he said.

For the time being it appears the quiet period will continue through December and this could mean prices drift lower in the New Year. But if the year starts with the last quarter off-take not being as bad as feared and there is some improvement in the economic/financial situation in the US and Europe, “we might see reasonable buying interest in January and this would support the market in the current range for the first 3-4 months,” he claimed.

Anyway, “we can expect that the pattern of limited buying for short term will keep the market on its toes. Major trend for 2012 will be established when there is some stability in the economic situation and some idea of the 2012 supply.

“Till then, it would be appropriate for both sides to cover some portion of the need (to sell or buy) to avoid being caught on the wrong foot in the event of any unexpected developments. Balancing on one foot with eyes closed is tough - try it”, he added.

Related Topics