From: Pankaj Sampat [mailto[email protected]]
Sent: Monday, August 08, 2011 1:22 AM
Subject: CASHEW MARKET REPORT - AUG 6, 2011


AUG 6, 2011


Cashew market was quiet in Week 32 – there was hardly any activity with USA but stray business was done with Europe and other markets. Prices were unchanged – W240 around 4.90, W320 from 4.55 to 4.70, W450 around 4.55, SW320 around 4.55, Splits around 4.15, Pieces around 4.05 FOB.

Indian domestic market was also quiet – after having gone up more than 10% in 2-3 weeks, it seems to be taking a breather. During August, there might be some selling pressure from Kerala processors who will need funds for Onam payments but that might be offset by replacement buying by North / West Indian market if the offtake by retailers from wholesalers during August is good.

RCN market is quiet as there is very little available in West Africa. Spot / afloat parcels being traded around 1700-1750 for Bissau and 1350-1450 for IVC/Ghana. There are reports of offers from Indonesia around US$ 2000 (some processors who cater to the Indian domestic market may pay this price for top quality for early shipments which can be processed during peak festival demand).

No firm news from Brazil which will probably be the most important supply side factor to be watched during the next 2-3 months. If the Brazil crop is very good, we might see a slowdown in buying in the last quarter as roasters & retailers may try to postpone the larger & longer term buying till the 2012 crops start. But they will have to continue buying for nearbys as very few have cover beyond 3-4 months. If there is any supply side negative in Brazil, we could easily see the market moving up a bit more during 2011.

Developments in the last two weeks in USA & Europe economy (and financial markets) could have significant impact on commodity markets, roaster & retailer strategies on procurement + marketing as well as actual consumer demand. If markets stabilise during August, impact will not be much but if the situation deteriorates, there could be an adverse impact on all non-essentials (which would include Nuts / snacks to some extent).

Apart from this, there is no news or information that warrants a change in the short & medium term outlook for cashews. Supply continues to be tight. Expected good Asian demand in the next 3-4 months and reasonable demand from other markets will mean that there will be regular buying every few weeks. Continuation of trend of short term covering which will keep the market supported and there will be no pressure on shellers to push for sales (especially since there is no big replacement possibility until the next Northern crops in second quarter of 2012).

We continue to feel that market is very delicately poised. Developments during Aug/Sep will determine whether it will continue in the current range (with an upward bias) for rest of the year or start drifting a little lower in the last quarter.


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]