Cashew likely to get dearer on demand boost

Written by RajeshRavi | Kochi | Updated: Mar 21 2013, 08:42am hrs
Cashew nut prices are likely to go up in the second half of the year with demand picking up. The cashew nut market had fallen due to the high price of nuts and continued economic problems. Traders expect modest recovery in consumption in the US, India and China to aid the market in the second half.

Prices recovered from $ 3.30 per pound for W 320 grade to $3.45 with demand back on track. Demand has improved as the market has seen lower levels. We expect consumption to be good in the US and India. There should be a modest improvement in Chinese demand. Europe continues to be bad, Pratap Nair of Vijayalakshmi Cashews, one of the oldest and largest cashew-exporting houses, said.

Prices of the W320 grade touched $4.50 per pound in 2011 but declined due to lower demand. The consumption of snack nuts fell 11% in the US during 2011 as against annual growth of 2-3%. Cashew nut consumption has taken a major hit due to lower-than-estimated buying from the Middle East and China.

In the next 6-8 weeks, roasters will have to buy a major portion of their needs for the second half. We feel that traders will probably want to cover their existing short positions and maybe even go a little bit long so that they are comfortable in making new contracts with retailers, Pankaj Sampat of Mumbai-based Samsons Trading said. The estimate is limited downside in prices and usual volatility in April and May. There is a good possibility of higher prices for whole cashews in the second half of the year unless raw nut prices come down significantly, he added.