From: Pankaj Sampat [mailto[email protected]]
Sent: Saturday, August 13, 2011 6:38 PM
Subject: CASHEW MARKET REPORT - AUG 13, 2011


AUG 13, 2011

Cashew market was extremely quiet in Week 33. There was stray activity with Europe, West Asia, Australia but there was hardly any business to USA from India. There are reports that USA bought at lower levels from some processors (mainly from Vietnam). During the week, offers (and trades) were in the range of W240 from 4.85 to 4.95, W320 from 4.55 to 4.65, W450 around 4.50, SW320 from 4.50 to 4.55, Splits/Butts from 4.05 to 4.15, Pieces around 4.00 FOB.

There was not much activity in Indian domestic market as there is not much available for prompt delivery. Wholesalers are waiting to see trend of retailers offtake in August before buying for Sep/Oct deliveries. Production in Sep will be lower due to Onam holidays in Kerala. So, prices could move up sharply if wholesalers need to buy end Aug / early Sep to replenish inventories.

On the RCN side, there is nothing new to report. Market has already factored in the 2011 Northern crops. Slightly smaller crops in India & Vietnam. Overall shipments from West Africa have been normal in quantity BUT (a) India’s share has been lower (b) kernel yields (especially white/fancy grades) will be lower. Attention will now be on the 2011 Southern crops – by mid Sep, we should have some idea of what to expect in terms of Indonesia RCN pricing & Brazil crop prospects and by mid Oct, we should get a feel on what will happen in Tanzania.

Due to the wider distribution of the West African RCN, shellers in India & Vietnam do not have their normal RCN coverage till the next Northern crops. This could mean that some of them will be prepared to pay higher prices for the limited quantities available in the Southern Crop. This will depend on what happens in the kernel market in Sep/Oct and the prospects for the Brazil crop (which traditionally supplies bulk of USA needs for fourth and first quarters).

On the kernel buying side, it seems that the pattern of short term buying will continue until there is a clear idea of impact of current prices on retail offtake. In many markets, major portion of the price rise has been absorbed – in a few there has been some decline. Impact in some other markets will be known in the fourth quarter. Unless the supply improves significantly, there may not be any immediate effect of decline in offtake on the kernel price range established in the last few months.

As we said in our last report, recent developments in USA & Europe financial markets could have significant impact on buying sentiment of consumers and operational strategy (and carrying ability + appetite) of retailers & manufacturers. It is impossible to even guess what will happen in the coming weeks and what it will mean for kernel buying for fourth quarter and first quarter. If things deteriorate, we will see increased caution and further shortening of coverage. If things stablise, people might be inclined to take longer coverage depending on fundamental factors – demand & supply.

External developments + kernel buying activity in Sep/Oct and the Brazil crop prospects have to be watched closely to get an idea of the cashew market trend till Mar/Apr. For the time being, it seems that the current range is unlikely to be breached (either side) till the 2012 crops UNLESS something dramatic happens before that.

Please inform your views on market situation, forecast of demand + market trend and any other news / information


Regards,
Pankaj N. Sampat
SAMSONS TRADING CO
Mumbai - India
Phone +91 22 64564300
Mobile +91 98200 79015
Fax +91 22 26462346
email [email protected] / [email protected]