Cashew Nut Kernel Market Report – The Balance in Supply and Demand is Expected to Tighten

The market of cashewnut kernels shows a relatively unchanged pattern. Buyers are covering their nearby deliveries and/or prompt shipments but awaiting further developments as prices are still getting better every week. Particularly Vietnam origin kernel sellers accept very aggressive bids for immediate shipment.

Kernel imports into the USA are up and into Europe import is more or less stable.
The RCN imports into India are up (with an Indian RCN crop estimated being 10-15% down) but export of kernel is down. With YTD Indian kernel export being lower, it seems Indian local consumption is brisker than last year.
Imports of RCN into Vietnam most probably will be less (partly off-set with a better Vietnam/Cambodian crop).
In Vietnam the question mark is what will happen with the current unsold RCN position in the bonded warehouses in the hands of the -mostly international- RCN traders. Factories are waiting with buying the RCN from these warehouses until they see balance with the actual kernel prices.

While buyers still waiting for better kernel prices, demand is perceived as slow, but export figures confirm that worldwide consumption is continuing at good levels.
Current price levels are quite interesting, especially for the European buyers with the current Euro/Usd exchange rate. Further developments are depending on the balance between supply and demand. For now, it is an interesting moment to test the market with firm bids and cover until new crop from the Northern Hemisphere as it is not expected that the Tanzanian crop will bring much relief. History tells us that the Tanzanian crop is relatively expensive, also because the quality usually is very good (high KOR/yield and big nuts), but with the current uncertainty in the market, maybe the bigger question is : who is bold enough to buy Tanzanian RCN. Rumours are already that Tanzanian government will delay the auctions to see whether prices could increase, although these rumours could also be spread by traders holding long positions as well.

Should a shortage of RCN be felt in the processing countries (focus on Vietnam and India), then maybe even the approx. 200-250K Mton RCN still in warehouses and with farmers in Ivory Coast may suddenly find ready buyers. However, the voyage time to processing stations may still create a physical shortage on kernels.

Summarizing : the balance in supply and demand is expected to tighten, and will especially become an issue when Tanzanian RCN and the left over West African RCN do not reach processing stations in time to get enough kernels into the market per month.

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