Cashew Kernels Edge Higher on Tight Spot Supply and Soft EU Demand

Indian and Vietnamese cashew kernel prices are edging higher in EUR terms, driven by firm domestic and Asian demand and supported by seasonally active monsoon weather in key growing belts. At the same time, EU demand via the Dutch hub is subdued, keeping European warehouse premiums modest and capping the upside for near‑term export offers. Across India and Vietnam, kernel prices for leading grades (W240/W320) show a steady week‑on‑week rise of roughly 0.5–1%, reflecting tighter raw nut availability and cautious selling by processors. Recent data from Vietnam indicate that the US and China dominate kernel off‑take, while exports to the Netherlands—a key European gateway—have declined year‑on‑year, signalling softer European demand and higher stocks in EU cold stores. Monsoon conditions in India and seasonal rains in Vietnam remain broadly supportive for standing orchards, with no acute, cashew‑specific weather shock reported over the last few days. Overall, the market tone is mildly bullish but not overheated.

Prices

Indicative spot and near‑by kernel prices converted to EUR (approx. 1 USD ≈ 0.92 EUR):

• Premiums for organic kernels remain sizeable in both origin and EU warehouses, but differentials are broadly stable.
• Brokn grades (LWP, SWP, FS) in India, Vietnam and the Netherlands are also ticking up by around EUR 0.04–0.05/kg over the week, signalling broad‑based firmness rather than grade‑specific tightness.

Supply & Demand

On the supply side, India’s 2026 cashew season is progressing under a generally active, if uneven, southwest monsoon. National assessments show all‑India rainfall still below long‑term norms by late July, but with improved rains over central and parts of western India in the last 7–10 days, after a weak early‑season phase. This pattern is broadly supportive for cashew belts in Maharashtra, Goa and Karnataka, with no major production loss reported so far.

In Vietnam, recent trade commentary highlights that the US and China together account for nearly half of the country’s kernel exports, while shipments to the Netherlands—a key EU transit and distribution hub—fell by around 10% in value year‑on‑year in the first half of 2026. This implies relatively comfortable stock levels in Dutch and wider EU warehouses, helping to restrain European replacement buying despite higher origin offers.

• India’s domestic demand remains a key buffer, with processed kernel absorption for snacks and confectionery offsetting uneven export flows; earlier APEDA analysis already underscored that exports account for a relatively small share of total Indian cashew use.
• Vietnamese processors appear to be favouring sales into Asia and North America, where demand is healthier, while pricing more competitively into Europe in order to defend market share.

Weather Outlook (IN, VN, NL)

India (IN): National discussions on the current monsoon indicate that cumulative rainfall to late July is about 20–25% below the long‑term average, but with expectations of improved activity through early August as new low‑pressure systems move inland from the Bay of Bengal. For cashew‑growing coastal and sub‑coastal belts, this points to mostly adequate moisture conditions, albeit with some intra‑season stress where June and early July rains were weak.

Vietnam (VN): Seasonal monsoon rains in the main cashew‑producing regions typically peak from May to September. No major, cashew‑specific adverse weather events have been reported in the last few days; rainfall is broadly in line with seasonal expectations, providing sufficient soil moisture and reducing short‑term yield concerns.

Netherlands (NL): As a downstream trading and processing hub rather than a producer, Dutch cashew fundamentals are influenced more by import flows and port logistics than by local weather. No acute weather‑related disruption to Rotterdam/Dutch logistics has been highlighted in very recent reports.

Fundamentals & Market Drivers

• Origin firmness: Slight but consistent weekly price increases in India and Vietnam suggest processors are not under pressure to liquidate stocks and are instead targeting better bids, supported by steady domestic and Asian demand.
• EU demand softness: Vietnam’s lower cashew export value to the Netherlands in H1 2026 points to slower European offtake and higher warehouse inventories, tempering price strength in the Dutch FCA market even as origins firm.
• Weather risk premium: While the Indian monsoon has been below average so far, the recent and forecast pick‑up limits immediate downside for kernel prices, as market participants price in potential yield and quality risks should rainfall distribution remain uneven.
• Macro & FX: A relatively stable USD and only minor INR and VND moves over the last week mean most of the observed EUR price changes are genuine tightening in kernel value rather than pure currency noise.

Trading Outlook (Next 1–2 Weeks)

• Buyers (roasters, packers, EU importers): Consider covering a portion of Q4 needs on current dips in Dutch FCA WW320 and broken grades, as origin offers are trending higher and any further monsoon concerns in India could lift replacement costs.
• Origin sellers (India, Vietnam): Maintain a moderately firm offer stance on premium whole grades, especially organic and W240/W320, but remain flexible on volume deals into Europe where competition and stocks are heavier.
• Short‑term traders: Bias remains modestly bullish; focus on relative value trades between EU FCA and FOB origin markets, where small arbitrage windows may open if European buyers delay coverage while Asian demand stays strong.

3‑Day Regional Price Indication (Direction)

• India (IN, FOB New Delhi): Slightly firmer bias for whole grades (W240/W320/W450) over the next three days, with broken grades stable to marginally higher as domestic festival‑season pre‑booking slowly builds.
• Vietnam (VN, FOB Hanoi): Mild upward pressure expected for WW320 and WW240 amid steady export interest from the US and China; broken and specialty grades likely to track whole‑grade moves.
• Netherlands (NL, FCA Dordrecht): Mostly stable to slightly firmer prices, reflecting higher replacement costs from origins but tempered by comfortable local inventories and cautious EU demand.