The raw cashew season is progressing normally. While harvest is nearing its peak, there are still serious stumbling blocks to smooth trade flow. Côte d'Ivoire’s (IVC) minimum price is still holding strong and we are hearing unconfirmed reports of some cross-border flow. The majority of the IVC crop is still held in-country, with limited takers in India or Vietnam. In the meantime, Vietnamese and Cambodian harvests are progressing well and are expected to be slightly better than last year. Farmers here don’t really like the price, but have understood the broader economic realities and are moving along…
Kernel demand and prices are still subdued and what we are hearing on increased offtake in US retail has still not translated to increase in demand in the origins.
I am not sure how long Vietnamese processors will remain operational and willing to lose money. As rightly advised by Vinacas, they will increasingly base their inshell purchases on back-to-back kernel contracts
More players will start waiting for some direction before committing to purchases/sales. This means processors will remain hand-to-mouth on inshell purchases, and buyers who do not see the consumption spurt will remain on the sidelines. We may be faced with a situation where there are no kernels available to ship for immediate requirements if the consumption spurt continues..
IVC crop seems to be lower than expectations. This could offset a better Vietnamese and Cambodian crop
IVC government’s reluctance to lower minimum price
Shipments of inshells and kernels could be delayed due to vessel capacity issues and container availability. We may not have the right product at the right place, leading to spot price increase
The global economic situation is looking gloomy and with severe restrictions coming in place for movement and gathering of people, consumption could take a hit
If the IVC government decides to reduce their price expectations, we could see much lower inshell prices and hence even lower kernel prices.
Cashew is not the only nut with low prices. Almonds compete with cashews in several areas and are attractively priced as well
In China, the situation is improving but cross-border trade between China and Vietnam may not resume as quickly as expected