Cashew exports are under pressure with Vietnam selling at a discount in global market coupled with revival of domestic demand from the impact of demonetisation and GST, which could support the Indian market.
Cashew exports are under pressure with Vietnam selling at a discount in global market coupled with revival of domestic demand from the impact of demonetisation and GST, which could support the Indian market. Besides, good supply of raw cashew is seen in India,Vietnam and Africa.
India produces 6-7 million tonne of raw cashews per annum and was until recently the leading supplier of kernels to the global market.
Pratap Nair of Vijayalakshmi Cashews, one of the oldest cashew exporting companies and chairman of the International Nut and Dried Fruit Council (INC) Congress said that there has been a small correction in cashew kernel prices due to discounted selling by Vietnam which is the market maker in cashew nut trade.
“Vietnam is the biggest exporter of kernels and also the biggest importer of raw cashew. The processing charges in Vietnam are lower than other processors and they can sell at a discount when compared to India,”he said.
Cashew kernel prices have gone down to $ 4.60-4.70 from $ 5.30 per pound a year ago, but is still at a premium to almonds selling at $3.50,Nair told FE.
Demand is robust for cashew nuts despite competing nuts like Almonds and Hazel nuts selling at a discount, he added.
According to Pankaj Sampat of Mumbai based Samson’s trading , the prices of substitutes almonds and walnuts have increased from the low levels seen in 2016 and early 2017.
“Prices of other snack nuts are steady at the higher levels. Although cashew prices have been going up for last 18-24 months, current prices are below the peak of mid 2017 and close to the average of 2016,” he added. On the supply side, Sampat reports that all origins are reporting normal to good crops with Vietnam and Cambodia talking of bumper crop after two years of disappointing crops.
Traders say that there is no parity in the prices of raw cashew and cashew kernel.
“For the last few years, raw cashew prices have been moving up steadily with a big jump in 2017. During 2017, the prices moved up from $1,500-1,700 to $2,350-2,450 with an average of $1,800-1,900. Total rise in raw cashew prices in 3 years is over 75% compared to an increase of about 40% in kernel prices,” Sampat added.
Indian imports of raw cashew is seen lower in 2017 , while exports are seen higher than 2016.According to the data provided by the state-run Directorate of Cashew and Cocoa Development (DCCD), the raw nut production in India for 2016-17 is seen higher at 7,79,335 tonnes.
Global demand for the kernel, which is a tree nut, has surged 53% since 2010, outstripping production in at least four of the past seven years, according to the data reported by INC. Global cashew production is estimated at 7.4 million tonnes.