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Cashew Market Update - End of Year 2022

At a first glance it’s been a very challenging year for the cashew sector. Kernels traded for a consecutive year at disparity, with unclear forecasts from destination markets leading processors to sit on higher inventories (both in In-Shell and Kernels) and the continued global hassle on freights & cost of production.

Tanzania auctions are nearing their end. Both India and Vietnam continue to cover. The pace of the auctions are behind last year’s volumes traded by end of December, this being said we also see a lower crop receipt vs. last year. Mozambique in-shell exports will start officially by January 7th and local processors signaling the need of more in-shell against existing commitments. The crop forecast is not exceeding 85K MT of in-shell versus 95K MT last year. For the NH crops the weather conditions continue to be 
favorable, same on the nearby forecasts. Vietnam & Cambodia had some excessive rainfall in isolated areas which doesn’t look to impact the crop development at this point. The weather risk period is not fully over though, but so far so good.

Pricing continued to increase during December due to high spot demand for main snacking grades from all main destination markets. The question remains if this is driven by absolute consumption needs or to refill the very thin pipeline. The stronger 
currency in Europe has led to additional interests for 2023 requirements, but since the pricing for new crops remain unclear, the Kernel processors likely will wait post Tet break before going into larger forward commitments. This will be also a period for 
them to make a better judgement on the new crops.

Bullish Trends:
• Tanzania season is almost over and in-shell trading levels remain high.
• Mozambique crop will not be available for Vietnam processors before their Tet closing.
• Kernel squeeze will increase further as spot demand remains strong and processing capacity remains limited.

Bearish Trends:
• First indications on Christmas off-take by end customers remain flat to lower versus last year.
• NH crops weather forecast are favorable and most unlikely to have a negative impact on crop size & quality.
• Continued financial squeeze in main destination markets and unclear forecasts from end customers continues.

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