The cashew kernel market continues to be silent with no major buying interest over the last several weeks. Despite the lack of large-scale buying interest, prices continue to remain firm. The reason for firm cashew kernel prices has been firm and out of parity with in-shell pricing over the last few months.
Tanzanian auctions started a couple of weeks back and have established slightly higher than current prices for inshells and, on a parity basis, much higher than today’s kernel pricing. But over the last few auctions, we have seen that farmers have rejected lower prices and hence not all quantities that were available were sold. Also, prices across all auctions were in a narrow band and have remained flat.
One can interpret the auction pricing as bearish as no one bid up the market (which is already at a disparity with kernels) or bullish as the disparity continues. If most of the Tanzanian crop does sell at the same price, there is a reason for shellers to increase their kernel prices.
How Tanzania’s auctions go from here depends on kernel demand. October through December is usually the peak demand period across the globe with festivals, Chinese New Year, and Holiday season demand. There is a lot of uncertainty due to spikes in COVID-19 and how various parts of the economy open.
Kernel prices are firm despite lower demand / active buying interest
Limited availability of good quality inshells at a reasonable price
Firm Tanzania inshell price
We are getting into a peak consumption period and spikes in demand can result in spot interest and price increase
COVID-19 related spikes / lockdowns and their impact on business
Excess shipments and inventory at destinations
No large interest to bid up Tanzanian inshells so far