Kochi, Jan 26 The cashew market has been quiet this week. However, some processors from India and Vietnam have sold W240 at around $2.95, W320 at $2.55 and W450 at $2.55 a pound (f.o.b). But, the volume traded was limited.
Large processors have quoted about 10 cents higher but no trades were reportedly concluded. Raw cashew nut (RCN) prices eased a bit – Tanzania traded at around $1,125 a tonne, Mozambique around $950 a tonne (c&f) as there was hardly any stock was left in the origins.
Prospects for upcoming crops are said to be normal. However, it would depend on the weather in the next 4-6 weeks, trading sources said. Benin (March shipment) started at $1,000 a tonne and it has dropped to about $925 a tonne (c&f) as serious players are not participating, they said.
In last six weeks, price for benchmark W320 has come off 7-8 per cent, most of it was in the last two weeks. “Due to prolonged quietness and lack of buying interest activity did not pick up in the new year, some processors started offering at lower prices to liquidate stocks and have some sales on books before new crops start,” Mr Pankaj N. Sampat, a Mumbai-based dealer told Business Line.
Volume traded has been small because the large processors are not willing to sell at lower levels, he said. With the recent decline in prices, there is some buying interest for the forwards, albeit not much, but large processors are not willing to sell at a discount.
After a few weeks, they may be willing to sell at lower levels but only if RCN prices come down substantially, another dealer said. “We can expect some volatility during Feb/Mar as ‘news' of crop progress and RCN prices starts coming in. Realistic crop estimates will not be available until April but in the meantime there could be sharp movements based on expectations,” Mr Sampath said.The forward positions are open, both for processors and buyers, and it increases the potential for sharp price movements (upward & downward), he said. “If kernel buyers can keep away from the market during this volatile and uncertain period i.e., in case they do not need to buy any large volumes until April, prices will drift lower”.
Processors will be able to buy RCN at reasonable prices and offer kernels at reasonable prices in the second quarter. But, if the kernel buying picks up in Feb/Mar, processors will be forced to rush in to buy when arrivals start, leading to higher RCN prices and a consequent inability to offer kernels at lower prices.
Source : Business Line