Exports of cashew continues to be lower this year as compared to the last financial year because both buyers and sellers are not willing to take any risk due to the volatile price situation.
Volume of export for the first two months of the current financial year is down by 4% while value realisation for the period is down by around 3.8% as compared to the same period of last financial year.
Interestingly, import of raw cashew has also come down in the current financial year, which also indicates lower demand at both domestic and export market.
Unlike 2009-10, when imports were increasing despite low exports, import of raw cashews has gone down by more than 14% during the first two months of 2010-2011 while the total value of imports has come down by 8%.
Import of raw cashew in 2009-10 is higher by 15 % in value terms and 24% in volume terms. Cashew kernel exports during the last financial year was down by 2.7 % in value terms and 1.2 % in volume terms when compared to the same period of 2008-09.
?Except for some brisk activity in the second half of April, market has been quiet for more than two months. This is a cause for concern as it adds to the volatility,? Pankaj Sampat of Samsons Trading told FE. Despite lack of activity, there have been no sign of any large selling pressure, he added.
?High price for raw cashew and slow arrivals have lead to reduced processing. It has to be seen whether processors can hold on till some large buying interest comes in,? Pankaj said.
Recent developments in the financial markets are adding to the concern about its impact on the retail demand and ability to carry inventory.
?On the buying side also, there is no rush to buy as there is uncertainty in the market. Nobody seems to be in a mood to take large positions ,? he added.
Traders are expecting the market to rebound during September because of a supply crunch. According to industry experts, buyers in Europe, Japan and Australia do a major portion of their buying for the next season during September ?October. US buyers also stock in advance for Christmas and other festivals.
?These factors should provide a floor to the market in the top half of the current range unless something dramatic happens. Like a big drop usage during May-August leading to less need to buy or a worsening of the economic situation leading to reduced contracting,? Pankaj added.