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From: Pankaj Sampat [mailto[email protected]]
Sent: Sunday, July 03, 2011 2:03 PM
Subject: CASHEW MARKET REPORT - JULY 2, 2011


JULY 2, 2011

Cashew market was quiet in Week 27 – there was scattered activity with USA & Europe (and some other markets too). Prices from India were W240 at 4.80-4.85, W320 at 4.55 to 4.65, W450 around 4.45 FOB. Some Vietnam processors are reported to have sold W320 around 4.45 to 4.50 FOB. There was good demand for brokens with business for Splits at 3.95-4.05 and Pieces at 3.85-3.90 FOB. Most of the business was for shipments upto Sep/Oct. Some buyers were bidding few cents lower for the last quarter but processors from whom they want to buy were not willing to discount.

Indian domestic market continued to move up – this week prices were about 5% higher than last week. Until last week, the buying was only for brokens but this week, some business was done for Wholes as well. The next few weeks will show whether the offtake will be same as last year despite the higher prices.

RCN market is steady – most of the activity is in the resale market where good quality parcels are being picked up at high prices. Unsold quantities in origin are limited and most of it is with very low yields. Although total RCN availability from West Africa will be more or less unchanged from last year, the kernel yield will be 5 to 10% lower due to very low yields from the main origin (IVC) and slightly lower yields from Benin RCN. Flow into India is lower than normal as larger quantities were taken by Vietnam (in addition to the 30-35,000mt bought by Brazil).

The higher prices are making the buyers wary of buying volume for longer spreads and some are also changing pack sizes & blends, modifying promotions, etc. This is affecting price differentials. Unconfirmed news that some retail contracts for SH 2011 have been made few weeks ago when the market was in the 4.00-4.25 range indicates that the offtake may not be as bad as feared. A clearer picture of this will be available in Sep-Nov period when 2012 contracts are discussed.

Until there is some indication of 2011/12 Southern crops (starting Sep/Oct) and USA/EU offtake forecast for FH 2012 (Oct/Nov), the trend of short term buying will probably continue and this will support the market around current levels. The market may become softer in the last quarter if the crop prospects are good and retail contracting is very low. If the Asian (especially Indian) offtake is steady in third quarter and if the offtake in importing countries is not as low as feared, the decline will be marginal until second quarter of 2012 when the Northern crops start. What will happen then is impossible to judge or even guess as there are too many uncertainties & variables.

Overall, there is nothing on the horizon to change the outlook – firmness in the near term, steady in the medium term, uncertain for the long term.

Kindly let me know your comments on market situation, views on trends for coming weeks and any other news or information


Regards,
Pankaj N. Sampat
SAMSONS TRADING CO
Mumbai - India
Phone +91 22 64564300
Mobile +91 98200 79015
Fax +91 22 26462346
email [email protected] / [email protected]