Robust demand for cashew nut and limited supply from Africa are likely to keep the market...
Robust demand for cashew nut and limited supply from Africa are likely to keep the market steady until April, traders said. Higher cost of competing nuts is also adding to the support.
India produces 6-7 million tonne of raw cashews per annum and processes nearly 60% of the cashew kernels consumed globally.
“Demand is good and supply comes mostly from Tanzania. The new crop from countries and regions like India, Vietnam and West Africa is expected only in April. The market is expected to remain steady,” Pratap Nair of Vijayalakshmi Cashews told FE. Competing nuts like almonds and pistachios are relatively costly compared to cashew adding to the demand, he said.
“Cashew continues to be the most reasonably priced nut moving in a relatively narrow range. It would be reasonable to expect prices to remain in this range and maybe even move up a bit depending on buyer behaviour,” Pankaj Sampat of Mumbai-based Samsons Trading said. “It remains to be seen if the buyers continue to buy in small tranches which will keep market steady or if they buy larger volumes or longer spreads which will push market up a bit,” he added.
Tanzania is the major supplier of raw nuts until the new crop from India, Vietnam and West Africa crops, which contribute 75% of the world production come to the market.“If processors are not able to sell kernels at higher prices, they may be slow in buying raw nuts. But the impact will be limited as the availability is limited because the Southern crop contributes only 25% of world production,” Pankaj said. He expects the market to move up in 2015.
Pratap Nair expressed concern that the new wage settlement due in Kerala for the cashew workers may make the industry less competitive and force exporters to set base in other countries. India has to import more than half of its requirement of raw cashew due to the poor productivity of its cashew plantations.
During the period of April-October of 2014, India exported 68,719 tonne of cashew nuts valued at R3,000.29 crore as against 72,230 tonne of nuts valued at R2954.58 crore during the corresponding period of 2013.