Cashew is probably the only nut for which prices have remained steady for two years in a row and India is the world's largest consumer, with trade estimates of consumption ranging from 170,000-190,000 tonne. It is also one of the largest processors and exporters of kernels. "It is a difficult phase and exporters are concerned. Raw cashew prices have gone up by 10-15 % in a few days in Tanzania and this has not reflected in the kernel prices. We have to wait till January-end to get a clear picture of Christmas consumption and that could determine the market," said Pratap Nair of Vijayalakshmi Cashews, one of the oldest and largest cashew-exporting houses.
Tanzania raw nuts, which started trading at $1,250 per tonne before the auctions started, have gone up to the $1400-1425 range. These prices are at least 10% higher than current kernel prices," said Pankaj Sampat of Mumbai-based Samsons Trading.
Global cashew supply during the current fiscal is likely to be lower by 5% due to erratic weather in most of the origins, says a report of the International Nut & Dried Fruit Council. On the kernel buying side, there are no signs of any big increase in demand although all markets are showing some increase from the lows of 2010-11. As most buyers in the traditional markets have adequate cover for a few months, there does not seem to be any pressure on them to buy despite signs of firmness in the market and possibilities of reduced availability in the first 4-5 months of 2014, he said.
There are some unconfirmed reports that the 2014 crop may start early. This will provide relief to processors as raw cashew prices would come down to reasonable levels. If the crops are not early, there could be a period when several processors will have to shut down unless kernel prices and demand pick up because they cannot keep on buying with such a large disparity. Some processors have already reduced processing in the last few weeks to make their current inventory last longer, Pankaj added.
According to data provided by the Cashew Export Promotion Council of India, India exported 82,421 tonne of cashew kernels during January- August 2012.