• CASHEW •
In the end of 2017 where we have seen prices going up very quickly during June/July and then dropped more than 10% again and find stability around today’s prices.
In general we saw more or less a confrontation between the “Western World” and Vietnamese shippers, in which the one side (the west) was complaining about the quality of the cashew nuts produced and on the other side the answer was that the “western” buyers were all complaining about the quality while they kept buying from the smaller factories and not supporting the bigger factories with far better quality but of course at a slightly higher price.
Also was mentioned that Indian cashew were about US 10-15 cents per pound more expensive. In addition to this the main question was which direction this market was heading for but the majority of the conference was not as one in their verdict, prognoses varied from USD 4.50 to USD 5.50 per lbs for W320.
Also supply demand was more or less even, but the demand for cashew nuts in Asia, Far East is in our view underestimated and in general a worldly growth of 2/3 percent is still there.
There were rumors that due to the fact the weather had been very wet, lots of rain and this would definitely affect the Vietnamese/Cambodian crop due to an effect on the flowering -by insects and water- which could mean a drop in the yield of these crops. Also mention of remaining stocks of RCN in Vietnam are of very poor quality, and all shippers were waiting for the first arrivals of the far better quality Tanzanian RCN crop, but also trading at levels around USD 2,400 CIF Vietnam.
Fact is that Tanzanian crop is good and arriving in Vietnam for processing. Prices for raw seeds from Tanzania came down a little bit due to very limited demand from kernel buyers. And still demand is slow and not anticipated to run up in the coming weeks with the Christmas holidays ahead of us. However, Vietnam needs at least 100.000 ton per month for kernel processing to supply China and the Western markets, Japan, South Korea and the likes. And the question is if there is sufficient RCN in the pipeline to sustain the physical kernel demand.
Our recommendation is to be covered for the beginning of 2018 (1st quarter) and await further information on the crops of the Northern Hemisphere before making additional calls. Keep in mind that shipments from Vietnam will be slow during February because of Chinese New Year and thus make sure that you have sufficient stocks for March/April out of January shipment.
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