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[bean2000]

From: Pankaj Sampat [mailto[email protected]]
Sent: Sunday, October 16, 2011 1:18 AM
Subject: CASHEW MARKET REPORT - OCT 15, 2011


OCT 15, 2011


After 2-3 weeks of decline, cashew market seems to have stabilised in the last two weeks. During week 42, price range was unchanged from the previous week : W240 from 4.25 to 4.50, W320 from 4.00 to 4.20, W450 / SW320 from 3.90 to 4.10, SW360 from 3.70 to 3.80, Splits & Butts from 3.40 to 3.60 and Pieces from 3.20 to 3.40 FOB. Some stray business was done for W320 – other grades were more or less neglected.

In Indian domestic market, there was some demand for broken grades – prices moved up 2-3% - but hardly any movement in wholes which are expected to start moving from mid Nov for the marriage season. Vietnam’s domestic market – China – continues to be quiet but is expected to show some activity in Nov/Dec for stocking for the Chinese New Year demand.

Spot parcels of West African RCN being sold in small lots ranging from US$ 1400 to 1750 depending on quality – stockists do not seem to be in hurry to sell. There are some reports that unusual weather in some parts of Indonesia & Tanzania may affect the crop. Indo RCN is in the range of US$ 1700. Results of the first Tanzania auction – small quantity – will be known early next week. Moz RCN arrivals are slow – price range will be known after a few weeks. We do not have firm news about Brazil RCN prices but believe they are expecting a reasonable crop of around 275,000mt.

THERE IS ABSOLUTELY NOTHING NEW TO SAY ABOUT THE MARKET TREND TILL THE 2012 NORTHERN CROPS. We can only repeat what we have said before :

- New RCN availbility between now and Mar/Apr is limited. Unless shellers are able to buy RCN at significantly lower prices, they will be reluctant to reduce prices to make sales.
- RCN prices are unlikely to decline too much unless there is a complete lack of kernel activity in Oct/Nov leading to a further drifting of kernel prices.
If there is reasonable kernel demand in Oct/Nov prices will stablise around current levels. If demand is good, prices may move up a bit.
- Very limited cover for 2012 shipments means that buyers will need to buy some volume in the next 2-3 months (even if the roaster / retailer demand is lower than previous years).
- USA & Europe expect a 10-20% decline in Cashew usage due to shift to other nuts but except for Almonds, scope for shift is limited as all other nuts are at relatively higher levels compared to their long term averages.
- Kernel activity in Oct/Nov will depend on contracting with retailers and roasters for early 2012 deliveries. Uncertainty of demand is making buyers delay decisions as much as possible.
- External factors (economical and financial developments in USA & Europe) will have significant impact on buying decision and strategies.

To sum up, we can say that the market is very delicately poised and could move either way in the short and medium term. It would be foolhardy to try & judge trend for the long term in view of the uncertainties in many factors – fundamental (supply & demand) as well as external. We can only say that we might see a return to late 2010 levels if the 2012 crops are good and if offtake is low in end 2011 / early 2012 or if the economic / financial situation deteriorates further.

Please let me know your comments on market situation, any info on offtake trends, your views / forecast of market trend and any other info / news


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]