Traders expect the market to stabilize with prices having corrected sharply in 2012 and lesser problems in West Africa, which supplies most of the raw nuts.
India is the world's largest consumer of cashew nuts with trade estimates of consumption ranging from 170,000 - 190,000 tonnes.
It is also one of the largest processor and exporter of kernels. The environment looks good for cashew and we expect a steady increase in consumption and prices. Prices corrected sharply in 2012 from the historical high prices of 2011. But the impact of the decline is yet to be felt in the market. We expect consumption to increase this year as cashew is better placed compared to other competing nuts, Hari Krishnan R Nair, chairman, Cashew Export Promotion Council of India, said.
Prices of W 320 grade touched $ 4.50 a pound in 2011 but have declined due to lower demand. Consumption of snack nuts fell by 11% in US during 2011 as against an annual growth of 2-3 %. Cashew nut consumption has taken a major hit due to lower than estimated buying from West Asia and China.
While the west has been consuming lower than the normal level for the three years due to economic compulsions, the lower demand from South East Asia and West Asia has been surprising.