Demand of cashew to rally in coming months
Demand of cashew to rally in coming months
Global demand for the cashew kernel has surged 53% since 2010, surpassing production in at least four of the past seven years.
The cashew market is estimated to firm up this year with demand expected to rally in the coming months,traders said. India’s exports are seen lower with Vietnam capturing the market and Indian processors catering to the growing domestic market. India produces 6-7 million tonne raw cashew annually and had been till recently the leading supplier of kernels to global markets.
Pratap Nair of Vijayalakshmi Cashews, one of the oldest cashew exporting companies, and chairman of the International Nut and Dried Fruit Council Congress said the market would firm up by April and expects a stable market in 2019.
According to Pankaj Sampat of Mumbai-based Samsons Traders, the market will see higher prices in the second half (H2) of 2019 with W320 to trade around $4 per pound for some time with a strong possibility of moving to $4.25-4.50 range in H2 2019.
“Despite higher prices in 2017 and 2018, most of the increase was passed on to retail prices and there had been no reduction in demand. Our feeling is that the price crash in last few months was more due to financial tightness and other external factors. It was not due to a demand-supply imbalance. Although, we do not expect a big jump, we feel that there could be a quick recovery to reasonable level,” he added.
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After moving in a narrower range of $4.75-5.00 per pound from June 2017 to March 2018, market started sliding in April 2018. It was in the range of $4.00-4.50 in the second quarter and crashed to $3.30-3.80 FOB by the end of September , which is a decline of almost 25% from the average of previous 18 months and close to 35% from the peak of less than 12 months ago, Sampat said. He estimates Vietnam inventory to be on the lower side and Indian inventory slightly on the higher side. Sampat reports Indian export of cashew kernel is lower at 59,208 tonne for the January-November period of 2018, against 80,920 tonne in the same period of 2017.
Nair said Vietnam processors were giving a tough competition and had captured the market, thanks to the lower cost of processing. In Kerala’s Kollam, of the 834 registered factories, around 700 are closed for the past two to three years due to paucity of working capital and non-viable operations.
Global demand for the cashew kernel, a tree nut, has surged 53% since 2010, outstripping production in at least four of the past seven years, according to the data reported by International Nut and Dried Fruit Council. Global cashew production is estimated at 7.4 million tonne.
