CASHEW MARKET FOR JUNE 2012

Cashew kernel prices are likely to remain firm in the near-to-medium term, on account of record rise in raw cashew nut (RCN) prices in the international market and supply constraints.

Raw cashew prices have been on the upward move over 18 months and recently hit an all-time high of $1,800 (Rs 81,000) per tonne in the international market, a growth of 100 per cent over $900 in 2009-10.

The main reason is attributed to a 25 per cent drop in the cashew crop globally, coupled with competition from Brazil and Vietnam for import of raw nuts and political turmoil in Ivory Coast, which crippled supplies. Around 400,000 tonnes of RCN supply was held up by Ivory Coast.

"In the last one year, RCN prices have been moving only upwards due to competition from Brazil and Vietnam. Brazil was never an importer of raw nuts, but this year it imported due to short crop there. Vietnam has turned a processor in the recent years and despite a local production of 350,000 tonnes, they are buying around 150,000 tonnes this year," 

The Tanzanian campaign ended with very high prices and all material came into India. The Mozambique and Tanzanian crops are also retained for local processing to some extent. Brazil had a very short crop of 200,000 tonnes, instead of the usual 300,000 tonnes, and was seen shopping for raw cashew in West Africa which normally comes to India, he noted.

As a result the Indian cashew nut processing industry is likely to fall short by about 200,000 tonnes of RCN this year

The Indian RCN crop is also below normal this year. The arrival of unseasonal rains in December last year has not only resulted in delay of the current crop but also affected the output. The domestic RCN production is likely to be around 500,000 tonnes, about 85 per cent of the last year crop.

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Prices went to an all time high of Rs 75-85 a kg to farmers in all origins such as Kerala, Karnataka, Goa, Maharashtra and Orissa. There have been sporadic declines during heavy arrivals due to quality issues. High prices have made it to high costs for processors. Factories who rely on the Indian crop have to pay very high prices and in turn the Indian cashew kernels could reach new highs after August.