CASHEW MARKET REPORT – 22 OCT 2017

From a range of 5.00-5.25 in second quarter 2017, price for W320 came down to 4.75-5.00 FOB by end Sep / early Oct 2017.

In Week 42, range of offers (with limited activity) has been W240 from 4.90 to 5.15, W320 from 4.75 to 5.00,  W450 from 4.70 to 4.90, SW from 4.50 to 4.70, Splits from 4.40 to 4.60, Pieces from 3.65 to 3.80 FOB

Lower end of the range is for nearbys from small & medium processors who keep selling at whatever price they can because they need to have quick turnover + they cannot make forward sales.

In first half of 2017, prices reached historical peaks – about US$ 2450 for RCN and about US$ 5.25 for W320

GB / Senegal / Gambia RCN which had traded as high as US$ 2400-2450 C&F have come down to approx US$ 2200-2250

Indonesia RCN which was trading around US$ 2450 end Aug / early Sep is down to US$ 2350 per mt.

Tanzania RCN crop is reported to be good. Some pre-auction business has been down from US$ 2450 down to US$ 2350.  First auction in Week 42 saw subdued interest. We have to see strength of processor demand and trader risk appetite in next 2-3 weeks to get indication of movement during the season.

Here are India & Vietnam statistics for last 3 years (Jan to Aug) :

                                         2015                2016              2017

Vietnam Import            710,300           772,500        1,059,400

Vietnam Export             211,100          229,900          230,100

India Import                  772,200          538,500           507,700

India Export                     71,000             51,500            58,700

This shows (1) India share of imports continues to decline – big drop in 2 years (2) India exports in 2017 are better than 2016 but still significantly lower than 2015 (3) Vietnam is increasing both imports & exports (4) there was either a big drop in Vietnam crop or there is a big inventory in Vietnam  (or there is an error in the statistics !!!)

Going forward, market trend for first half 2018 is very unclear.

Prices of Almonds, Walnuts, Pecans have increased from the low levels seen in 2016 / early 2017.  Prices of some other nuts like Macadamia & Brazil Nuts are steady at the higher levels. Cashews are below the peak of mid 2017 and close to the average of 2016.

The increase in Cashew prices over the last 18 months (from Mar/Apr 2016) has been passed on to retail prices – partly in some markets and fully in some others (mainly Asia which is the biggest consumer).  So far, there has not been any indication of big decline in off-take.  It is not certain whether this trend will continue or change.

We do not see scope for any big decline from the current price range UNLESS there is a big fall in activity in kernels in last quarter 2017 as well as first quarter of 2018.

If that happens, processors will be slow in RCN buying leading to lower RCN prices. And if the 2018 Northern crops are normal, we could see a big drop in prices in second quarter 2018.

If there is moderate kernel activity in the next 2 quarters, we will probably see market move sideways in current range. Processors will need to keep buying RCN and this will keep prices steady.  There could be a possibility of a dip to 4.50-4.75 range in second quarter of 2018 if Northern crops are good.

Any spurt in kernel buying in next 3-4 months would lead to a sudden jump in prices because processors would have to rush in to buy RCN. Prices could move up again to 5.00-5.25 range and stay there till 2018 crops are in full swing.

It is quite possible that some traders will sell at lower levels expecting reduction in demand leading to lower prices in 2018 but processors would be reluctant to take positions at lower levels at this stage.  They will wait to get an idea of RCN price trend before making any large kernel sales for 2018 shipments.

Overall, situation is very uncertain and it is much tougher than normal to judge what the trend will be.

Regards,

Pankaj N. Sampat

SAMSONS TRADERS

Tanzania: Farmers Urge Cashwenut Board to Open Agro-Input Shops

The leadership of the Cashewnut Board of Tanzania (CBT) has been asked to expand its scope of services including opening shops for selling agro-inputs in a move aimed at empowering farmers to acquire insecticides for spraying their cashew trees on time. The appeal was made by farmers from Madangwa and Mandawa wards in Ruangwa, Lindi Region, during the auctioning of cashews in Chiuta Village and Mandawa Ward in Ruangwa District Council.

Making the request on behalf of fellow farmers, Mr Nandewa Yusufu said the absence of agro-input shops forced them to walk long hours looking for inputs, which were sometimes not enough because of the big number of cashew trees on their farms. He said besides the inputs not being easily accessible, the stock of inputs sent was sold at a high price. A farmer from Chiuta Village, Mr Mohamedi Muwa, said the situation had caused low cashew yields in the current harvesting season. "The insecticides brought by the government last year were insufficient and the dealers were selling inputs at higher prices contrary to the government's indicative prices," said Mr Muwa.

He added that during the farming season, farmers were often forced to purchase the inputs at higher prices outside their areas. Responding, CBT deputy chairman Edgal Maokola Majogo promised to present the request for input shops to responsible authorities, urging firms that purchased cashews to adhere to conditions put in place including making payments on time to ensure farmers benefit from their cash.

Mr Majogo also called upon executives of primary societies to desist from mixing money obtained from the previous auction and the future auctions as by doing so, he said, it was contravening the procedure tailored by the relevant authority.

In the auction that took place on Monday, October 23, over 2.7 tonnes of cashews and 224 kilos of the product were bought from Nachingwea warehouses in Lindi Region, whereby the highest price of the crop was Sh3,875 and the lowest at Sh3,860.

Source:http://allafrica.com/

Mozambique aims to exceed pre-independence production of cashew nuts

Mozambique is expected to produce 200,000 tonnes of cashew nuts per year in the short term, said Prime Minister Agostinho Carlos do Rosário, who backed up his statement with investments being made in the cash crop.

The prime minister, who recalled that Mozambique had already exceeded that level of production before independence in 1975, said that Nampula is among the country’s provinces to produce the most cashews, with 60,000 tonnes or almost half of the current production of 137,000 tonnes.

Rosário was speaking at the Nassuruma’s intensive cashew production field in Meconta district as part of his working visit to Nampula from Thursday to Saturday last week, according to Mozambican news agency AIM.

The Nassuruma nursery, which belongs to the Institute of Cashew Promotion (Incaju), produces cashew tree seedlings, and in the current

Rosário also visited Alfa-Agricultura, a South African company whose owners spent US$8.6 million on production of cashew nuts, vegetables and fruit on a plot of 1,080 hectares. (macauhub)

Source:https://macauhub.com.mo

Cashew sales fall 20% this Diwali season

Sales hurt by increased imports of kernels, higher raw nut prices and confusion over taxation Local cashew processors have seen a nearly 20 per cent fall in sales this Diwali season from last year, hurt by increased imports of kernels, higher raw nut prices and confusion over taxation. "There has been a spike in the import of cashew kernels.

Though import carries a duty of 45 per cent, cheaper rates (abroad) have led to its rise," said RK Bhoodes, chairman of the Cashew Export Promotion Council of India.

Kernels are currently imported at Rs 300­400 per kg, in both whole and broken forms. "It is profitable as the selling price is higher in India," Bhoodes said. More imports are happening in broken cashews which are largely absorbed by the confectionary industry, he added.

In India, retail cashew prices have moved up around 10 per cent in the past to Rs 800-820 per kg now. Impleyear to mentation of goods and services tax had also hit the traders early on, though the situation has improved since.

GST on cashew was initially fixed at 12 per cent, compared with a 5 per cent tax levied on the commodity before the new system came into effect on July 1.

This created a confusion in the market, leading to a delay in stocking by traders. GST on cashew was subsequently brought down to 5 per cent on the request of the industry.

Also, traders are yet to move fully into the GST system, said K Prakash Rao, managing partner of Kalbavi Cashews. "While the overall sales lower than last year, the demand for premium quality nuts has not waned," Rao added.

Another reason for higher retail prices this year is the rise in the cost of imported raw nut, traders and processors said. Costly raw nuts caused a 20 per cent drop in their imports to 7.70 lakh tonnes in 2016-17.

The cashew industry has called for the scrapping of a 5 per cent duty charged on shipments from Ivory Coast, Ghana and Nigeria, which account for a major share of imports.

"Our domestic production of around 7 lakh tonnes and a part of import go for processing for internal consumption. As sufficient nuts are not available, 40 per cent of the (processing) capacity is lying idle," Bhoodes said.

Source: https://economictimes.indiatimes.com/

Vietnam's cashew exports up in first 9 months

Vietnam's cashew nut exports in the first nine months of this year surged 26.6 percent on-year to nearly 2.6 billion U.S. dollars.

Specifically, Vietnam exported 260,000 tons of cashew nuts, up 1.1 percent, according to the Vietnamese Ministry of Agriculture and Rural Development on Thursday.

The United States, the Netherlands and China continued to be the main importers of Vietnamese cashew nuts, which consumed 36.6 percent, 15.9 percent and 11.3 percent of the country's total export value, respectively.

Vietnam would make cashew export turnovers of 3 billion U.S. dollars this year, the Vietnam Cashew Association said, noting that the figure was a target earlier set for 2020. Last year, the country exported 347,000 tons of cashew nuts worth over 2.8 billion U.S. dollars.

Vietnam's cashew-growing area dropped to 290,000 hectares in 2015 from 440,000 hectares in 2007, according to the ministry. In 2016, the area increased by 5,600 hectares.

Source: http://news.xinhuanet.com

Germany Biggest Buyer of Iranian Pistachio

Germany was the main destination of Iran’s pistachio, as it imported 3,063 tons of pistachio worth $40 million from Iran, in the first five months of the current fiscal year (started March 21). Over 61% of Iran’s exported pistachios were dispatched to Germany, Iraq, Kazakhstan, the UAE, India, Spain and Russia, Trend News Agency reported. However, the Islamic Republic of Iran Customs Administration’s official statistics indicate that Iranian pistachio exports’ value decreased by 40% to earn $198 million and the volume of exports also decreased by 45% to reach 19,000 tons during the five months, compared with the same period of last year.

Iran exported pistachio to 59 countries, including Yugoslavia, Jordan, Armenia, Argentina, Uzbekistan, Australia, Slovakia, South Africa, Afghanistan, Albania, United Kingdom, Ukraine, US, Italy, Bahrain, Brazil, Belgium, Bulgaria, Bangladesh, Pakistan, Tajikistan, Thailand, Taiwan, Turkey, Turkmenistan, Tunisia, Libya, South Korea, Moldova, China, Romania, Japan, Singapore, Sweden, Switzerland, Serbia, Oman, France, Kyrgyzstan, Qatar, Canada, Kuwait, Lebanon, Poland, Lithuania, Malaysia, Egypt, Vietnam, Netherlands and Hong Kong. ISNA quoted Mahmoud Abtahi, chairman of the board of directors at the Iranian Pistachio Association, as saying that the amount of pistachio production in Iran in the last fiscal year halved to 180,000 tons, which is the main reason behind the decline in export this year.

Head of Iran Pistachio Association, Mohsen Jalalpour, said every year between 8,000 and 12,000 hectares of Iran’s pistachio orchards are lost because of water shortage and soil salinity.“Land under pistachio cultivation in Iran is currently close to 350,000 hectares while during the 2000s, the figure stood at more than 400,000 hectares,” he was quoted as saying by Eranico. Kerman Province in southeast Iran is the country’s biggest producer of pistachio. The province once accounted for 70% of Iran’s pistachio production, but now produces only 30% of all the pistachio grown in the country due to the severe water crisis.

“Pistachio is currently cultivated in 19 provinces across the country, all of which are more or less facing the same issues,” he said.Both Jalalpour and Abtahi estimate this year’s production to stand around 230,000 tons, of which Jalalpour expects some 150,000 tons worth $1.5 billion will be exported to register an 11% and 25% growth in weight and value respectively compared with last year when 135,000 tons worth around $1.2 billion were exported.According to Jalalpour, who is a former chairman of Iran’s Chamber of Commerce, Industry, Mines and Agriculture, Iran is the second biggest producer of pistachio after the US and top exporter of the commodity. Deputy Minister of Industries, Mining and Trade Mojtaba Khosrowtaj said Iran supplies more than 50% of the world pistachio market.

Source:https://financialtribune.com

Vietnam remains world’s No 1 exporter of cashews

The country has been relying heavily on the world’s material market. If the material prices fluctuate, Vietnamese enterprises may fail to fulfill export contracts or deliver products on schedule, and their products may not meet requirements on food hygiene.

In 2016, Vietnam exported 347,000 tons of cashew nuts worth $2.84 billion, increasing by 5.6 percent in quantity and 18.4 percent in value compared with 2015. In that year, the world’s total cashew nut output was 3 million tons, while Vietnam imported 1.1 million tons.

In the first eight months of 2017, Vietnam exported 223,000 tons worth $2.2 billion, which represented the 1.1 percent decrease in volume, but the 24.9 percent increase in value compared with the same period of 2016. The average export price was $9,842.5 per ton in the first seven months, or 27.2 percent higher.

According to Vinacas, Vietnam plans to obtain $3 billion from cashew nut exports in 2017, or $160 million higher than 2016. Meanwhile, due to the bad weather, the output is modest, just 300,000 tons and the amount of cashew nuts for processing is 250,000 tons only.

As such, to fulfill the export plan, Vietnam would have to import 200,000 tons more in 2017 than the last year.

According to Nguyen Duc Thanh, chair of Vinacas, most markets which import processed cashew products from Vietnam set high requirements on quality and food hygiene. This means that Vietnamese processors need to be sure that the input materials have high quality. Therefore, Vinacas believes that Vietnam needs to expand the cashew growing area.

Do Ha Nam, chair of Intimex Group, said Vietnam is No 1 in the world in cashew nut processing technology and it has the best products in the world. Therefore, Vietnam needs to boost exports to earn more money. He thinks now is the right time for farmers to expand the cashew growing area again as raw cashew nuts now can go for good prices.

In 1996, Vietnam began importing raw cashew nuts from Africa. In 2016, Vietnam surpassed India to become the biggest cashew nut exporter. Vietnam’s products are consumed in more than 100 markets.

By the end of 2016, Vietnam had 300,000 hectares of cashew growing area, mostly in Binh Phuoc, Dong Nai and Ba Ria – Vung Tau. The raw material price increased from 10,000-12,000 per kilo some years ago to VND40,000 per kilo.

Source: http://english.vietnamnet.vn/