<p></p><p>Cashew nut market is seen firming up on supply problems of raw cashew from Africa. Africa produces 45% of the world’s total raw cashews but most of the processing takes place in Vietnam and India. Political problems in Guinea Bissau and reports of lower yield in Ivory Coast are the major reason for the price increase, traders said.“Primary reason for the increase in kernel prices in the last three weeks has been increasing concerns on supply side. Apart from the lower crop in Ivory Coast, possible delays in movement of Guinea Bissau raw nuts is causing concern,” Pankaj Sampat of Samsons Trading said. “During April, kernel prices have moved up by about 10-12% and raw cashew prices have moved up by 12-15%. Most of the increase in kernel prices has been due to concerns of supply and resultant covering of shorts for nearby positions by kernel buyers,” he added.</p> <p>“If arrivals do not pick up in May, the fears of a big shortage in Ivory Coast will be proved right. This will lead to a further increase in raw nut prices leaving little chance for any decline in kernel prices even if the demand is slow,” Pankaj Sampat said.Hari Krishnan R Nair, chairman of The Cashew Export Promotion Council of India feels that the market is swayed by reports that production is lower in Africa and Vietnam. “These are initial reports and need not be true. Production estimates for India is good and we expect a resurgence in demand given the fact that kernel prices have declined in the past few months,” he said. </p><p>India is the world’s largest consumer of cashew nuts with trade estimates of consumption ranging from 170,000 - 190,000 tonne.It is also one of the largest processor and exporter of kernels. Data provided by the Cashew Export Promotion Council (CEPC), suggest that Indian exports during the last FY of 2011-12 would be around R3500 crore.Regarding demand, Pankaj Sampat feels that the market is not sure about the consumer preference for a snack, which has seen extreme volatility in the last 15-18 months.“US and EU buyers seem to be reluctant to buy for distant positions despite the supply side concerns because they are not sure whether demand will pick up in the second half of 2012, after a 15-20% decline in the last two quarters. Feeling is that if the prices move up further, there could be less interest from retailers,” he added<br></p><p></p>