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Cashews Market Update - March 2020

Cashew kernel market has been soft due to lack of significant buying support for over ten months now. However, despite the lack of buying support, the market was showing resistance to trade below a certain threshold until January 2020. The resistance to further fall in prices was due to lack of availability of cheaper inshells.

Post-Chinese New Year (the last week of January), coronavirus fear gripped Vietnamese processors as China closed its borders. Processors who had kernel stocks in hand started taking losses and selling to whoever was willing to buy. Markets saw corrections of about 20 cents from what already look like a bottom as cashew processors expected inshell prices to crash in the future.

Eighty percent of inshells are harvested during this time of the year, between now and June. This year’s crop seems to be about two weeks late, compared to last year. Côte d'Ivoire (IVC) is one of the largest inshell producers. The government in IVC has set a slightly higher minimum price for inshells and have been very strict in curtailing cross border smuggling of inshells to Ghana and price manipulation and buying under minimum price by traders. They have also started supporting local buyers to buy inshells at minimum price from farmers. This has provided stability to the inshell market for now. The Benin government (albeit a lower crop) has agreed to slightly reduce the minimum support price. This has had limited impact due to action by IVC government.

We have a situation where kernels are weak due to coronavirus worries and inshells stable due to resistance by governments to lower prices. We are unsure how markets will react… however one thing is sure, the current kernel prices are close to or at a 10-year low.  At current prices and lack of liquidity, farmer income will be affected. Cashew is a smallholder crop and if there is limited motivation to collect, dry, and sell cashews a lot of crop can deteriorate in quality.

On demand side, barring a few major players, we have seen limited shelf price reduction on snack nut packs that have cashews in them. Will the further price drop translate on to the shelf? Also, there is news that the coronavirus scare has suddenly increased shelf stable food demand that includes cashews. 

Given the above situation the scenario which will play out depends on whether coronavirus will resolve quickly, impact only China or impact the worldwide economy.

Possible Scenarios


  • Prices are at a 10-year low… how much lower can they go?
  • As the Coronavirus eventually resolves, the pent-up demand to fill the pipeline could claim all spot inventory. Vietnamese shippers who sold at low levels could be forced to buy high priced RCN - and default on low prices CKN contracts
  • Crops in northern hemisphere are actually late by 2 weeks. If the late crop is also a short crop, supply could be curtailed and hence bring surplus reductions.
  • IVC government has put in strict measures to stop trade below minimum prices & cross border flow. The high RCN cost could keep kernel prices firm.


  • If the Coronavirus blows out of proportion, it could create large scale business disruption. Even if only China consumption is impacted (by 50%), the supply surplus will grow.
  • Demand/consumption could not pick up as expected, since shelf prices don’t fully reflect the lower prices.
  • The 2020 crop could be better than expected.
  • African governments could relent and allow free market price / trade of RCN.

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