Cashew Market Caught Between Hormuz Shock and Tight African Supply

Vietnam’s cashew market is trading in a fragile balance: logistics to the Middle East are severely disrupted and demand is softer, but tight raw nut supply and higher freight and energy costs are preventing a major price correction.

Exports to Gulf destinations are being rerouted via Red Sea and Mediterranean gateways, adding time, cost and risk to Vietnam’s 2025–26 export campaign. Large buyers with strong logistics are still moving volume, while many smaller Middle Eastern traders remain largely absent. At the same time, freight for African raw cashew nuts and below‑trend crops in Ghana and Ivory Coast are tightening raw material availability. Current FOB Vietnam kernel prices are broadly steady, signalling a market that is cautious but not in free fall.

📈 Prices & Spreads

Cashew kernel prices in key origins are stable week-on-week, reflecting the tug-of-war between weaker regional demand and constrained raw material supply. In Vietnam (FOB Hanoi), WW240 grades are offered around EUR 7.75/kg, WW320 at about EUR 6.85/kg, with secondary grades WS and LWP near EUR 5.75/kg and EUR 5.25/kg respectively. In India (FOB New Delhi), conventional W320 stands close to EUR 6.95/kg and W240 around EUR 7.46/kg, while broken grades such as LWP and SWP trade near EUR 5.75/kg and EUR 5.20/kg.

European packaged kernels (FCA Netherlands) show lower outright levels, with WW320 around EUR 5.00/kg and LWP near EUR 3.55/kg, indicating continued downstream margin compression but also some buffer for buyers able to draw from local stocks. Across all major grades, the flat price pattern since early March points to a market that is absorbing logistics shocks without yet repricing aggressively upward.

Origin / Location	Grade	Terms	Latest Price (EUR/kg)	Direction vs mid-March
Vietnam – Hanoi	WW240	FOB	7.75	Stable
Vietnam – Hanoi	WW320	FOB	6.85	Stable
India – New Delhi	W320	FOB	6.95	Stable
Netherlands – Dordrecht	WW320	FCA	5.00	Slightly softer

🌍 Supply, Demand & Logistics

Vietnam exported nearly 800,000 tonnes of kernels in 2025, with China and the United States the top buyers and the Middle East taking about 89,000 tonnes, or 11% of shipments. This regional share is now under pressure as the effective closure of the Strait of Hormuz and security incidents in the Gulf have led major lines to suspend direct calls to ports such as Jebel Ali. Carriers are instead routing containers via Salalah, Jeddah and Mersin, with last-mile delivery into Gulf markets by road and rail.

This rerouting keeps some trade alive but at much higher freight and insurance costs and with longer transit times. Large industrial buyers and supermarket chains in the Gulf, often with global logistics contracts, are still sourcing Vietnamese kernels through these alternative corridors. Smaller regional traders, however, face prohibitive complexity and are largely staying out of the market, eroding spot demand for standard grades into markets like Iraq, Jordan and Lebanon and contributing to a softer demand profile overall.

📊 Fundamentals: Raw Nut Tightness vs Demand Drag

On the demand side, the loss or delay of Middle Eastern volume is weighing on sentiment at origin. Spot buying for certain popular grades has thinned, particularly where sales channels rely on smaller re‑exporters or regional wholesalers. In parallel, the broader macro backdrop is turning less friendly to discretionary food items as surging energy prices and shipping costs from the Hormuz crisis push up inflation across key consuming regions, potentially dampening retail demand for premium nuts.

Yet this demand drag is being offset by meaningful supply-side constraints. Processors in Vietnam report higher freight costs for raw cashew nut imports from Africa, while early crop arrivals in key origins such as Ghana and Ivory Coast are coming in below expectations, tightening raw nut availability. This combination is helping to hold kernel prices in Vietnam steady even as some destination demand softens, and it limits downside for Indian processors who also depend on African raw material inflows.

Financial stress is an additional, less visible fundamental. Rerouted shipments are experiencing delays at transshipment hubs, leading to extended payment cycles as buyers wait for cargo to arrive before releasing funds. For exporters, this means higher working capital needs and greater exposure to counterparty risk, with some unsent or delayed payments already reported. That, in turn, may curb their willingness to extend aggressive forward offers, further underpinning nearby prices despite cautious demand.

⛅ Weather & Crop Watch (Key Origins)

For the coming weeks, the focus remains on crop performance in West Africa and seasonal conditions in India and Southeast Asia. Early 2025–26 harvest data from Ghana and Ivory Coast already indicate lower-than-expected yields, and current weather is not pointing to a rapid rebound in production potential. This reinforces concerns that global raw nut supply could remain constrained through much of the marketing year.

In India, pre-monsoon conditions and elevated temperatures are broadly in line with seasonal norms, and no acute weather shock is currently visible that would dramatically alter domestic cashew output. However, any escalation of heat stress or delayed pre-monsoon showers into April–May would add further risk to tree health and nut quality, potentially exacerbating the tightness already stemming from African origins.

📆 Short-Term Outlook & Trading Ideas

In the near term, the cashew market is likely to stay rangebound but nervous. Price direction will hinge on three key variables: the duration and intensity of shipping disruptions in and around the Strait of Hormuz, the trajectory of global energy prices, and confirmation of crop sizes in West Africa. A quick easing of regional tensions could restore some direct Gulf services and modestly improve demand, while any further deterioration would push freight and insurance costs higher and deepen payment and liquidity stress along the chain.

• For roasters and packers (India, EU, Middle East): Consider covering 2–3 months of WW320 and WW240 needs at current flat prices, focusing on reliable shippers who have proven routings via Red Sea ports. Avoid overextending beyond that horizon until more clarity emerges on African crop outcomes and regional security.
• For origin processors (Vietnam, India): Maintain disciplined offer levels, especially on premium whole grades, to reflect higher RCN and freight costs. Be selective with credit terms to smaller Gulf buyers and prioritize large counterparties able to handle rerouted logistics and timely payments.
• For traders and investors: The risk-reward skew currently favours a mild bullish bias in kernels rather than aggressive short positions. Downside is limited by raw nut tightness and elevated logistics costs, while upside remains capped by demand softness. Volatility spikes are likely around any significant shift in Hormuz-related headlines.

📉 3-Day Regional Price Indication (Directional)

• Vietnam (FOB Hanoi, WW320, WW240): Sideways in the next 3 days, with offers expected to remain near EUR 6.85–7.75/kg as processors monitor freight and raw nut flows.
• India (FOB New Delhi, W320/W240, LWP): Stable to marginally firm, with potential slight upward bias if African RCN shipments face additional delays or cost increases.
• Europe (FCA Netherlands, WW320, LWP): Slightly softer to sideways, as local stocks and slower demand offer some cushion against higher replacement costs, though basis risk to origins remains elevated.