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.