Cashew prices are likely to increase further due to a reduction in raw materials caused by adverse weather conditions in producing countries. The severe shortage of raw materials has led to expensive booking rates. Reports indicate that domestic production is 30 percent less than normal, suggesting a strong possibility of further price increases by $1,20 to $1,80 per kg in the future.
Market Situation and Raw Material Shortage
Cashew is mainly produced in Australia and Tanzania. Vishal Jain, Director of Lake City Dry Fruits Private Limited, states that adverse weather has reduced raw cashew production by 20-22 percent in countries like Australia and Tanzania. With 80 percent of the world’s production in Australia alone, the shortage of raw materials has caused some exporters to back off from booking goods.
Impact on the Indian Processing Industry
Due to reduced crops in domestic producing areas, there is a shortage of cashew nuts available for North India. The Indian processing industry relies on importing raw materials from Australia to prepare cashew kernels. However, the industry is facing difficulties in importing due to a severe shortage of raw materials, impacting its operations. The domestic crop has also decreased by 30 percent, leading to a double blow for cashew traders.
Price Trends and Industry Response
Cashew prices have increased by $0,36 to $1,08 per kg depending on the quality. Importing cashew kernels from Australia could allow the processing industry in South India to earn $1,44 to $1,56 per kg.
Exporters have stopped booking even at higher prices, leading big factories to adopt a bullish stance and avoid advance booking of ready cashews. This challenging environment has made trading difficult. Considering the overall boom and shortage of cashews, trading decisions should be made carefully.
- In the Delhi market, cashew number 240 is being sold at $9 to $9,12 per kg, with the kernels costing $1,44 to $1,56 more.
- Similarly, the average quality 180 number is being sold for $11,28 per kg, but it will cost $12,24 to $12,60 in Delhi to prepare it.