Demand decline in US, Europe worries cashew traders

Written by Commodities Bureau | Kochi, Nov 14 | Updated: Nov 16 2008, 03:43am hrs
Declining demand for cashew from the US and European markets is turning to be a major concern for importers re-negotiating contracts as some some shipments have been rejected on the slightest pretext, traders said. After a nominal decline in trading volumes in September, shipments have come down by 20% in October including the rejection of some consignments. Trade experts forecast the price falling down further with recession-affected households turning value-conscious. Large volume of contracts have declined substantially and trade is mostly carried in smaller lots, a trader said.

According to industry experts, buyers in Europe, Japan and Australia conduct a major portion of their purchases for the next season during the September-October period. Buyers in the US also stock in advance for festivals like Christmas and New Year.

The pull-down effect on demand for non-essential products has been higher and the market could see a drop. Interestingly, inventories of major US and European buyers are minimal and demand should have been good in normal circumstances, a leading exporter said.

Lesser demand coupled with the higher costs of importing raw cashew kernels has put Indian exporters in a critical situation.

Circumstances have led Indian exporters to cut down on import of raw cashew kernels from African nations. Indian import of raw cashew kernels dropped by almost 20% in October, from 49,430 tonne in October 2007, to 39,188 tonne in October 2008.