Cashew Market Update - May 21, 2020
The cashew market has been reasonably quiet for the last couple of weeks.
Inshell trade from Africa continues at a brisk pace and farmers in West Africa have started selling their harvest which was stored for some time. This storing of inshells was prompted by general lack of buying interest at the beginning of the season and COVID-19 related restrictions. The storing of these cashews has resulted in deterioration of quality.
The increase in selling activity of African farmers has resulted in the price of inshells decreasing, and the quality is also poorer. Lower quality inshells will produce larger quantities of lower grades of cashew kernels in processing. Today most of the lower grades are illiquid and hence poses a very high risk to the buyers of these inshells.
We expect the West African cashew season to last for a few more weeks and then slowly taper off. As inshell harvest and trading volumes fall we may start seeing firmness in kernel prices, if demand supports.
India is still affected by COVID-19 lockdowns and the economy is severely impacted. For demand to support any significant price increase we will need to see resumption in wholesale market demand and demand from festivals and marriages.
Shipments from Vietnam to destinations have been much better in 2020 and hence we are unlikely to see any spot squeeze at destinations relatively soon.
- Quality of inshells is deteriorating
- Vietnamese processors are running out of good quality inshells and firm inshell prices
- Economic activity across US and EU/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
- Overall state of job losses and hence uncertainty in consumption….
Please take care and stay safe and healthy
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