In-shells

WAF season has opened in Ghana basis smaller volume trades which are well above earlier price expectations. Especially processors in India have been very active, Vietnam processors have been on Tet break and major part of the industry resumed work this week, therefore activity was nil. The Ivorian government has declared 315 CFA/kg as the minimum farmer price against 305 CFA/kg last year. Converted to in-shell this is about $30,00/metric tons higher vs last year, including the export levy. Still unknown factor remains cost of production increase as the shell realization is not at same levels of last year. Nigeria is expecting a better crop than last year wherein a reduction more than 30% was noticed. 

So far the weather conditions remain favorable across all cashew growing areas incl. Asia. It’s yet to been if the sun drying period will be as well favorable for the cashew sector, last year ongoing showers had severely impacted the crop quality. 

Kernels

Kernel demand is focused on spot and nearby shipments. With in-shell pricing yet to be discovered it’s not a big surprise to see limited forward offers as risk appetite across the industry is low due to so many unknown factors from cost of production to funding. Kernel processors in Vietnam will have a very tight working capital season ahead and loans are limited. This may lead to a constant spot coverage from an in-shell perspective which results in tight Kernel supply.

Main destination markets remain inactive during January, that coverage beyond March/April are extremely low. Tender season in Europe is around the corner and demand will start popping in from USA especially on both snacking and ingredient items. India has had a tremendous Kernel consumption season and beaten all-time records with more than 1.0 million metric tons of in-shell imports. China is likely to enter this season without any further Covid-19 restrictions, which resulted in already better activity vs. last year same period. Middle-East is another emerging and growing market and currently in the middle of their main Ramadan coverage season which will start last week of March.

The spot Kernel market is still trading at disparity vs new crop in-shell pricing, this phenomenon worked out last year due to better shell realization into the energy industry. This year we may not see this benefit for the Kernel processors, hence at this point downside looks very limited.