The cashew nut market is estimated to rally higher due to short supply of nuts in Vietnam and India, traders said. The market is already tending higher and with demand outpacing supply, the market is likely to move up to record levels.
India produces 6-7 million tonne of raw cashews per annum and was, until recently, the leading supplier of kernels to the global market. “Lower supply of nuts in Vietnam, India and West Africa has made raw nuts very costly. Average price of kernel has moved to $4.75 to 4.80 per pound for W320. But demand is seen robust and ahead of supply even at this high price,”
Pratap Nair of Vijayalakshmi Cashews, one of the oldest and largest cashew-exporting houses, said.
Cashew market started moving up from the first quarter of the year on apprehension of lower kernel availability through 2016 due to a shorter crop and slower movement through the supply pipeline.
Import duty of 10% on raw nuts by the Indian government also led to prices moving up from middle of March as the duty adds to cost of doing business.
Pratap said the market is likely to remain firm till March 2017 when the new crop from India and Vietnam hits the market. “Raw materials are overpriced and entry of new processors in Africa and India have further worsened the market for processors.
The current price level is likely to extend for quarter and depending on the demand it may move up further, “he added.