<p></p><p>Cashew market has moved up significantly in the last 4 weeks. <br></p> <p>During Week 14, business was done for W240 from 3.90 to 4.00 and W320 from 3.70 to 3.80 FOB for Apr May Jun shipments. Not much business reported in other grades. <br></p> <p>Levels now (Week 15) are W240 3.95 to 4.10 / W320 from 3.75 to 3.95 / W450 from 3.60 to 3.75 / SW320 from 3.50 to 3.65 / Splits from 3.20 to 3.35 / Pieces from 3.05 to 3.15 FOB. More enquiries but limited activity. <br></p> <p>After opening high, RCN prices started moving down by end Feb. With introduction of import duty on RCN in India, people were expecting further softening. Surprisingly, RCN prices started moving up again from middle of Mar. For instance, IVC (largest crop in Africa) which had gone below US$ 1300 has moved up to US$ 1500 (an increase of nearly 15% in one month !!). For comparision, IVC RCN traded in the range of US$ 1150 to 1300 during 2015. <br></p> <p>Arrivals are late in many areas - there is concern that crop may be short in some areas. Clear picture on quantity will be available only by end May or early Jun. One thing is certain - kernel yields per ton of RCN (in-shell) from almost all origins are lower than normal. <br></p> <p>Following the increase in RCN prices, the kernel market which has been steady for a very long time started moving up. Prices have been going up few cents every week from middle of March. Due to the delay in crops and reduced buying by Indian processors, kernel availability in Apr to Jun will be reduced. This expectation coupled with some delays in Feb Mar shipments from Vietnam induced USA & EU buyers to come in and pick up all offers for nearby shipments. Some buyers are covering for third quarter also. <br></p> <p>Activity this week has been limited because there is apprehension about what will happen in coming weeks. Buyers are reluctant to pay higher levels because they don’t know whether crop concern is exaggerated (and whether demand will be affected if prices remain high). Shellers are reluctant to sell any large volume because they don’t know how crops will develop in coming weeks and what will happen to RCN prices. <br></p> <p>Current RCN prices are very high - processors margins which have been under severe pressure have moved to negative territory for most processors. As a result, many processors have reduced processing. If the RCN prices don’t come down significantly or kernel prices don’t move up a bit more, processors will not be able to buy as much RCN as they normally would. This will keep kernel supplies tight for few months more until there is parity between RCN & kernel prices. <br></p> <p>Kernel off-take has been good in all markets and if prices do not go up too much, we can expect trend to continue. There may be a tipping point beyond which there could be a decline in off-take. The questions at what is that point and will we reach it ? <br></p> <p>After a long period of stable prices + sufficient margins + steady growth, it seems that this year will be different + difficult + dangerous. <br></p> <p>Pankaj N. Sampat | SAMSONS TRADERS<br></p><p></p>