Cashew News July 2017

RCN Situation:

A lot of cargoes are arriving in Vietnam from  Africa, which is causing a big port congestion. All buyers are trying to clear these goods, pay for them but when finance is difficult, trying to sell these cargoes at the moment. This creates pressure on the prices, resulting in declined demand at port of loading in Africa. Business at Vietnamese ports are being reported to be for IVC goods 49 lbs at around UDS 2.080 USD while offers of IVC in Africa cannot sell when being offered at USD 2,050 for 46/200 and 445/200 at USD 1,975.

Also the pressure on the RCN also resulted in lower kernel prices, making it in effect difficult to make money and therefore resulting that the market becomes a standstill situation. Also the lower outturn of contracted goods at 47-48 lbs, giving a lower outturn around 42-44 lbs does not help this situation.

Therefore origins as IVC, Nigeria and especially Guinea Bissau are pricing themselves out of the Vietnamese market. Guinea Bissau basically only can sell to the Indian market, which domestic market is paying better prices for the quality.

The RCN market is very much unclear, a lot more dealers/buyers/manufacturers active in this resulting in a unclear situation, but basically we feel market is under pressure and most kernel buyers are seeing this and stop in showing their needs.

Current RCN prices give the information to the manufacturers to sell W320 around USD 5.15 upto USD 5.25 and the market is not paying this.

Smaller shellers do not want to keep stocks, one of the reasons is that banks are financing the RCN for a shorter period than previous months- it is more a 3-month period against 6-month period prior to today. Also percentage financing for RCN stocks is going compared to previous times.

The market RCN is under pressure, due to lack of finance – too many people playing the market – quality deterioration – quiet kernel market – traditional summer period in USA/EU.

Kernel Market:

The buyer’s market which has been just buying nearby shipments is proving itself at the moment, resulting in not buying market drops.

Most manufacturers/dealers are basically covered until end of August/first half September 2017 shipment, and most only need to buy for periods upto the Holidays (Christmas, etc.) which basically means purchases only need to be done September, October, first half November 2017 shipments.

It looks like that buyers are on the winning side at the moment, seems in any case. Although nothing is sure of course.

Levels have dropped down to USD 4.80 for small shellers/packers to USD 4.90 for medium and USD 5.05 for top packers.

Once top packers realize that the market indeed will not pay the high price levels, there could be developing additional downward pressure on the price levels.

Vietnam:

India:                                  


Source: Cashewinfo

India: In India cashew kernel price remained mostly unchanged during last week. Traders are slowly getting to understand various GST procedures, which have come into force on 1 July 2017. Cashew kernel FOB Tuticorin prices for various grades wholes/pieces were either slightly down or remained unchanged at previous week level.

Vietnam: According to the General Department of Vietnam Customs, 165,000 tonnes of cashew nuts worth about USD 1.62 billion were exported in the first six months of 2017, up 2.3 percent in volume and 27 percent in value from a year earlier.

The Chairman of the Vietnam Cashew Association (Vinacas) Nguyen Duc Thanh said, in first half of 2017, the domestic cashew nut supply was not enough for processing, so the industry had to import 400,000 tonnes of high-quality raw cashew nut from Africa in order to meet the market demand. Vietnam early in 2017 had set a target of 360,000 tonnes of cashew kernel export during this year. US: The US cashew kernel imports in the month of May-2017 totalled 13,401 tonnes as against 11,029 tonnes imported in April-2017. In the first five months of 2017, US has imported 52,836 tonnes of cashew kernel as against 49,275 tonnes imported during the same period in 2016, reporting an increase of 7.23 percent. The US has imported 8,780 tonnes of cashew kernels from India during the first five months of 2017 as against 6,825 imported during the same period in 2016, which is an encouraging sign for the Indian cashew industry. Average annual export of kernels from India to US during the period 2011-2015 was 32,000 tonnes. In 2016 India’s kernel exports to the US was 15,580 tonnes.

Cashew Market commentaries  from Experts

CNSL update Panruti-Tamilnadu
There is very little change in prices. Cashew oil dealers are in dilemma over GST rate. Present rate of shells is INR 6.50 per kg and the cake is below INR 4 per kg. CNSL is fetching INR 22 per kg. The availability is good but cardanol producers are not buying with enthusiasm. The prices are likely to decline soon.
Source: Om Prakash Phadnis, Panruti, India

CNSL update Mangalore-Karnataka
CNSL traded in the region of INR 21.5 and 22 per kg. Cake is fetching around INR 4-4.20 per kg and shells are costing about INR 6.5-6.8 per kg. While the price of Cardanol remains unchanged at INR 46 per kg when compared with previous week. Source: Kanco Venkatesh and Santhosh Silva, Karnataka. It was a relatively quiet week from our point of view. May be a few more sellers of kernels in the market but major suppliers appear to be holding the line. Off take seems to be holding up in the Western markets but perhaps we have not seen the impact of higher prices as yet. Expectations among processors are that buyers still have business for 2017 to do seem unlikely to be fulfilled whilst the market remains quiet but this one needs to be watched closely.
Source: Jim Fitzpatrick

With weak demand from buyers, prices were slightly down during last week. W320 was reportedly traded at USD 4.80 per lb FOB, sold by medium packers for July shipment. Towards the end of the week, offers were seen around USD 4.80/4.85 per lb FOB by reliable packers, but buyers are not interested with the proposed offer. Top and reliable packers’ prices had also reduced during the week, some packers needed to move the goods by offering W320 at USD 4.95 per lb FOB for July and August shipments without being confirmed by buyers. The entire market was quiet as USA and EU the major buying destinations are quiet. From what they are doing are to get old contracts shipped, which are pending for too long. Due to fluctuation of market these years, most of the cheap contracts were not yet shipped by packers and is now good time for packers to ship. There is of course certain demand in the coming time but we do not know
when and at what price it will be. Processors have paid very high price of RCN and with downtrend of the market they would face heavily losses if market continues to remain sluggish. Quantity of imported RCN reaching Vietnam ports is bigger but again most of packers do not have cash to take the goods out, as banks have adjusted their support/loans to packers by granting only 30-35% of the whole lots. Local market was coming down amid weak buying interests. Whole grades prices were reduced, but pieces remain unchanged.
Source: Mr. Kim, Khiem Nguyen Co., Ltd, Vietnam

Guinea Bissau
The season has almost come to an end in Guinea-Bissau. Shipments of course will continue for a couple of months more. It is almost certain when the final figures are in, they will reflect a short-crop in Guinea-Bissau. Local prices have fallen sharply to around 700-900 cfa per kg. But quality has fallen even more sharply and it is only the brave-hearted who are venturing to buy.
The rains have started in earnest.
Source: John Rao, Bijagos Comerciais S.a.r.l.

The prices are stable at the moment while the business activities are very limited during the week. We believe this situation will last for at least two months until near Mid-Autumn day which will be on 4 October, unless some drastic change happens in Vietnamese markets.
Source: Will, Lee, China

Cashew market is a bit dull at the moment. The supply from West Africa is afloat and arriving. Good quantities are available in India and Vietnam for processing, but prices continued to stay firm. The availability in the producing origins is drying up and prices are increasing while quality is coming down. Currently demand is very slow. Most of the buyers are in wait and watch mode. Buyers are not nervous but aware of the ‘risk’ of quick turning around soonest demand will pick up. For the third and fourth quarter still some coverage needs to be done. Best advice is to benefit from good deals on the day to cover either nearby or Q3 & Q4 positions, and meanwhile stay focused on the general market as sentiment may swing the prices all of a sudden and very sharply due to several reasons (processors needing money -price down- or demand for RCN increases -prices up-).
Source: Kees, Global Trading Agency, The Netherlands

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