<p></p><p>The cashew market continued to slip last week, declining by almost 10 per cent over the previous fortnight.Though there was a fair amount of activity for June-July shipments, not much was traded for the forwards as the big processors were not keen to sell large volumes at current levels, Mr Pankaj N. Sampat, a Mumbai-based dealer told Business Line. The differential between the highest and lowest offer, he said, has widened to 15-20 cents a pound (lb) depending on the grade and shipment period.</p> <p>Mean/middle-of-the-range prices (fob) were: for W240, $4; W320, $3.50; W450 and SW320, $3.45; SW360, $3.30; splits, $2.55; and pieces, $2.30.The domestic market, too, was quiet. “Here, the difference between the highest and lowest offer is currently over 10 per cent compared to 5 per cent in the international market,” he said. </p> <h1>On a rollercoaster</h1> <p>As mentioned by an experienced trader at the Vinacas conference in Nha Trang last week, cashew stakeholders have been on a “rollercoaster” for the last 18-24 months and there are no signs of the ride ending in the near future.In a nutshell, W320 moved from $3 in July 2010 to $3.40 in October 2010, and further to $3.80 in November 2010, $4 in May 2011, and $4.70 in July 2011, only to fall to $4.50 in September 2011 and crash to $3.75 in December 2011.It was an upward trend from July 2010 to July 2011, and then downward up to December 2011. Price movement during 2012 has been sharp and erratic — from $3.70 in January to $3.20 in March to $3.80 in early May and $3.50 in end-May.</p> <h1>RCN PRICES DOWN</h1> <p>Raw cashew nut (RCN) prices have also come down by about 10 per cent as a result of the decline in kernel prices, he said.The current prices per ton are as follows: Guinea Bissau, $1,400; Benin, $1,100 a ton; Ivory Coast (IVC), $1,000 (c&f) but very limited business is being done.</p> <p>Unfortunately, he said, the availability of good quality nuts is now limited to Guinea Bissau, Senegal and Gambia. Much of the West African crop was traded at higher levels though the quality was below normal. Shipments during April-May have been slow and, hopefully, June will be better.Of the 2,00,000 tons available in Segabi, “we doubt whether shipments in June will exceed 50,000 tons. We feel that reasonable volume has been sold for June/July shipments and unless RCN prices come down further, shellers may not be willing (or need) to reduce kernel prices because there will not be much replacement RCN available till the Southern crops come in during the last quarter,” he said.Unless the price is attractive, buyers will be reluctant to buy forwards, and unless there is a reasonable premium, shellers will be reluctant to take any large forward orders. The RCN market is basically a spot market. </p><p>Overall, the downside seems limited and there is a possibility that the prices could inch up a bit to the recent highs if demand picks up. Concerns about impact of too high prices on demand will put a cap on the price increase. Demand will be the key factor affecting the market trend in the coming weeks.Apart from the disruptions in supply and uncertainty on the demand side, there is the added problem of large currency movements and difficult economic conditions in many markets. All these make long-term planning difficult and reduces the liquidity in the market. Any small deviation on supply or demand side leads to spike or dip in activity and prices, Mr Pankaj said. </p> <h1>Prudent strategy needed</h1> <p>In sum, the outlook is very hazy — it is “confusion compounded”. In such a situation, prudent strategy, for both sides, would be to have something on the books for the next few months to avoid any major effect on top- and bottom-lines if the market moves unexpectedly, as it has in the recent past.“In March, the feeling was that we would soon see the market touching $3. By early/mid May, we had crossed $3.75 and people felt $4 was definitely possible. Within two weeks, at the end of May, we are at $3.50 per lb (fob) ...What will June-July bring?”</p><br><p></p>