<p></p><p>The cashew market was quiet last week after reasonable activity in the previous fortnight, as the buyers seem to have reverted to ‘watch mode'. However, some stray business did take place in some markets and the undertone was firm.Offers were made in the price range of $3.80-3.90 for W240; $3.35-3.50 for W320; $3.25-3.35 for SW450 and SW320; $2.25-2.50 for splits and butts; and$2.10-2.25 per lb (fob) for pieces, according to a trade sources in Mumbai.There is reasonable buying interest for second quarter shipments, but buyers are quoting 10-15 cents lower than the last traded levels, Mr Pankaj N. Sampat, a major dealer told Business Line.</p> <p>Crop output trend</p> <p>The reliable processors, from whom the buyers want to buy forwards, are not willing to discount the market until there is some indication of the upcoming crops and RCN (raw cashew nut) price trend, he said. They feel that unless the RCN prices come down dramatically there is no reason for a decline in kernel prices.There was some activity in India for spot/afloat parcels of RCN but the origin market continued to remain dead, Mr Pankaj said. There was no activity in Tanzania/Mozambique. It is now confirmed that the Brazil crop will be at least 15 per cent lower than expected and “this means it will be active in West Africa,” he said. </p><p>By mid-February, “we will get some indication of crop prospects and RCN prices in India, Vietnam and West Africa, but a realistic picture will emerge only by April. Till then, we can expect volatility, depending on news reports, rumours,” he said.For more than a year now, buyers are coming into the market every few weeks to cover a few months' requirement. None of the buyers has bought any significant quantity for shipments beyond April.Despite this, they do not seem to be in a mood to buy large volumes for the forwards, paying the small premium that reliable processors want. They feel that with large crops coming in over the next four months, prices may not move much and, at the same time, there is lot of uncertainty about demand trends. The economic and financial situation is further reducing the risk appetite and inventory-carrying capacity in the chain, he said. </p><p>Reduction in usage is factored into the current price range. Unless something dramatic happens, there does not seem to be any reason to expect a further major decline in usage from “what we have seen in the last 4-5 months. In fact, if prices remain around current levels, we expect usage to be better in the second half of the year at least in Asia, if not in the major importing countries,” he claimed. </p><b>Market movement </b><p>Considering all factors, it appears that the market will continue to hover around current levels for the next 2-3 months with potential for some volatility depending on sentiments, news reports and rumours, he said.By middle of the year, there will be reasonable clarity on the fundamentals — demand and supply. Hopefully, by that time, there will be some stability in the economic and financial situation too. Then a realistic medium-term range can be established.Although it is impossible to predict price levels, it seems reasonable to expect that: a) if the upcoming crops are normal, the market will remain in the current range; b) if they are good, the market will drift to the $3 level; and c) if they are bad, the market could move up to the $4 level, he added.</p><br><p></p><br>