• CASHEW •
EU and USA market
Kernel supply in the destination countries is tightly balanced; any demand in fact has a price strengthening effect.
The market of cashewnutkernels is moving up slightly because of limited uncommitted stocks in Europe and USA. It seems end of the year sales have been good, since buyers are in the market for relatively nearby deliveries.
Currently, prompt deliveries are fetching an increasing premium in comparison with the origin prices from especially Vietnam.
Indian kernel prices jumped up much in the past weeks, and the new is that the Indian market is too empty on RCN, causing the risk of too limited kernels being available, resulting in higher local kernel prices.
Supply
The currently supply of RCN has to come from the Tanzanian and Indonesian crop. Both crops are OK but also prices are high and remain high despite buyers are working on lower kernel prices. Mozambican crop was not so good but most of the Mozambican crop is processed locally anyway. Processors are awaiting new crop from West Africa which will start coming in shortly now. Right now the signs are for a later crop than the past 2 seasons, and demand for the first new crop is expected to be good, but also we can see that the availability of the RCN from West Africa will be too late to fill early demand from India and Vietnam, resulting in some uncertainty on the direction of the prices when the volume of the crop comes in.
On the other hand, there are offers from various African traders already, prices based on last year ending contracts. For example, prices are mentioned for Nigeria product already between Usd 2050-2100 per ton.
Demand
Most of the buyers are covered for their nearby shipments (1st quarter) and partly for 2nd quarter but also awaiting cheaper kernel prices. How realistic this is will be known in a couple of weeks. We do not expect big changes in the nearby future unless something dramatic and unforeseen will happen. World supply should grow slightly while demand is expected to show growth as well (kernel exports for 2017 compared to 2016 was up slightly).
Consumers so far are not seen to reduce their consumption because of the higher kernel prices, whereas European consumers of course have an advantage of the stronger Euro now. Kernel shipments from Vietnam will be down in February because of the holidays in February.
• MACADAMIAS •
Asia is playing a more and more important role in the world of nuts and definitely also on macadamias. For many years kernels have been sold to traditional markets including Japan, but in recent years countries like South Korea, Taiwan and China are knocking on the door and even India is getting slowly a taste for macadamias. The kernel market is looking very healthy in this part of the world even though prices have increased a lot. Nonetheless buyers are positive for 2018 season. The NIS business is currently waiting for Chinese New Year. There is still some inventory left, but after talking with quite a few processors they informed us that the market picked up speed and we could see that with all the machines in full production. In general the market is growing in China, but a little bit at a slower pace due to also high prices. Therefore prices might ease a little bit compared to the last part of the crop when prices were extremely high, but will still be firm. The factor of Chinese (Yunnan) product is limited as there are still a lot of issues on the quality. This might take a while to sort out, but we will only find out what the real situation is in October when the International Symposium is held in the main growing area in China.
For kernels we do remain our advice to take some cover. The market is empty and we have to work with the product available now. The first new crop comes from Malawi & Kenya (limited quantities though) and will be shipped during March/April. The first shipments from South Africa will only commence in May/June, followed by Australia. The expectation is that prices will remain firm for first shipments. For later shipments it is a bit hard to tell and will strongly depend on China and the further development of the crop. We would recommend you to be covered for first new crop shipments until August/September as there is a lot of interest for those shipment positions and nothing as carry over and up to 60-70% for the later shipment positions.
• PECANS •
Due to lesser Chinese demand, prices for Pecannutkernels came down a little bit.
As the Chinese will be out of the market for some time it is expected that the market will go forward in a stable pace.
The strong Euro might make it interesting for European buyers to cover their future requirements until new crop
• BRAZILNUTS •
The market of Brazilnutkernels remains a very interesting one. The raw material market has been challenging pricewise as the collectors were expecting historically high prices for their raw material, having earned really good prices for their goods last year, whilst factories have been pushing back for lower prices knowing that export market will not be willing to support these high prices. As you know demand was heavily affected by the high prices last crop year so it is imperative that prices come back to more reasonable levels.
It seems that a balance has been found between the collectors and the factories expectations and raw material is finally flowing. The big advantage for the brazilnutindustry is that consumers are asking for brazilnutkernels again after they disappeared from the shelf so most supermarkets want to bring the product back on the shelf from May/June onwards when new crop should become available.
• HAZELNUTS •
The situation in Turkey remains tight, driven by cautious middleman and factories whom keep their stocks off the market. Additionally there are concerns about the new crop as the mild weather conditions could potentially lead to an early bloom (and therefore higher damage/frost risk.
Keeping in mind that Ferrero is not even included in this picture, the market is not expected to show any sign of relief. Although all these factors would prevent the market from coming down, there are still some unknown factors who could interrupt this current market status.
The political position of Turkey for example, which could be affected by their current war policy, might impact the exchange rate and export prices accordingly.
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