The cashew market continues to be quiet. One would expect markets to trend lower with lack of buying support. On the contrary, cashew kernels have been surprisingly resilient. This could be attributed to the slower pace of inshell arrivals in West Africa, as we near the end of the current harvest in most countries.
Prices in IVC did firm up with local inshell buyers getting active and the arrival pace slowing down. Good quality inshells are hard to find at a bargain across West Africa. We have also seen some large inshell traders starting to buy more aggressively to increase their long positions, as they’re expecting a much tighter supply situation in the coming months.
On the kernel side, the shipments to the EU and US have been excellent. Our estimate is that the kernel shipments to these regions are up over 25% in Jan-April 2020. We also know that the COVID-19 demand situation led to higher consumption, but this level of imports is still very high and shows a very comfortable stock situation with buyers.
One can expect a steady market with limited up and downside. The biggest unknown is still the Indian domestic market situation – both in terms of inshell supply and kernel demand.
Slowing harvest and arrivals, reducing availability of inshells
Large traders stocking up on inshells, expecting a shortage towards year end
Economic activity across the US, EU, and China is restarting and it may increase retail demand for cashews
Indian economy is slowing significantly and will impact cashew demand – India is the largest market for cashew kernels