Kochi, Jan. 5 The year 2009 ended on a quiet note for thecashew trade as not much business was done during the last two-three weeks.
Some processors sold W320 a few cents lower in the last week but there were very few trades at the lower levels. General levels were W240 around $3.10, W320 around $2.90, W450 around $2.60 f.o.b., a major Mumbai-based trader told Business Line.
About 45,000 tonnes of Tanzanian raw cashewnuts (RCN) have been sold in the auctions, most of it at around $1,250 a tonne (c&f).
Buyers were bidding lower in a dull market, but the bids were not accepted and parcels would be offered again next week.
RCN traders reduced their selling ideas but due to the dull kernel market, no business was reported.
Shipments from Mozambique have started this week but a clear picture on prices is yet to emerge, trader Mr Pankaj N. Sampat said.
“There have been some enquiries at lower levels but processors are not keen to sell because they are not sure whether RCN prices will drop enough when new arrivals come in March,” he said.
At current RCN prices, the parity for kernels is about 10 per cent higher than the current kernel prices. So RCN prices in 2010 will have to be substantially lower to allow processors to reduce their selling prices. There have been some lower offers from traders for forwards in the last couple of weeks which would serve two purposes (a) some sales on books before the new crop arrivals start and (b) some reduction in origin prices for nearbys.
Outlook
Outlook for 2010 is unchanged: If market remains quiet for two or threemore weeks, some processors will start offering at lower prices, at least for the nearby destinationss. This would result in a slow drifting down of prices even for forwards which could mean lower buying interest for RCN when new arrivals start.
If kernel buyers have to start buying in January/February to cover positions or rebuild inventories, prices will stabilise around current levels, that is, RCN prices may not decline much even when arrivals start, he said.
Overall, “we do not see any cause for significant change from the recent trading range of $2.80-3. There could be a slight increase if there is strong demand in January/February and a slight decline if activity in first quarter is normal.”
Big increase is unlikely and a big drop is possible only if activity is very slow in January-March plus all the crops are normal or better, he added.
However, exports of cashew from the country have shown an upward trend in November last year on a decline in unit value and rise in demand probably for the winter months.
Total exports during the first eight months of the current fiscal stood at 71,918 tonnes valued at Rs1,926.88 crore as against 75,806 tonnes valued at Rs 2,091.14 crore in the same period the previous financial year, the Cashew Export Promotion Council sources told Business Line.
The average unit value during the April - November 2009 was at Rs 267.93 a kg as against Rs 275.85 a kg in the same period the previous year, they said.
Shipments in November 2009 were at 9,549 tonnes valued at Rs 253.76 crore at unit value of Rs 265.75 a kg as against 8,308 tonnes valued at Rs 246.97 crore at a unit value of Rs 297.27 a kg in November 2008.
Total imports of raw cashew nuts shot up during the current fiscal (April – October 2009) to 5,92,572 tonnes valued at Rs 2,246.48 crore from 4,91,148 tonnes valued at Rs 2,090.06 crore in the same period last fiscal. The average unit value this fiscal was Rs 37.91 a kg as against Rs 42.55 a kg during April-November 2008.
F.O.B prices for different grades on Saturday were (in $/lb): W240 3.10; W320 : 2.90; W450 : 2.60; SW320 : 2.65 – 2.70; SW360: 2.55 – 2.60;and SSW: 2.00.
Source : Business Line