Cashew market caught between strong supply and fragile demand

The global cashew market is well supplied but increasingly uneasy, as strong raw nut arrivals meet softening demand, Middle East disruptions and mounting quality issues in West Africa.

Processors in Vietnam and India are securing raw material at elevated levels, yet buyers across key consuming regions are cautious, trading smaller volumes and resisting higher kernel offers amid rising logistics and living costs. This stand‑off is capping upside in kernel prices despite firmer competition for good‑quality raw nuts. Meanwhile, tensions around the Strait of Hormuz, weaker Middle Eastern and Chinese demand, and freight and financing headwinds are reinforcing a wait‑and‑see attitude throughout the value chain.

📈 Prices & Short-Term Trends

Kernel prices are edging mildly lower in EUR terms, reflecting good supply and hesitant demand rather than a structural glut. Recent indicative offers converted to EUR (≈1.07 USD/EUR) show:

Origin	Grade	Term	Latest price (EUR/kg)	1w change (EUR/kg)
Vietnam	WW240	FOB Hanoi	≈7.20	-0.05
Vietnam	WW320	FOB Hanoi	≈6.36	-0.05
India	W320	FOB New Delhi	≈6.40	-0.05
Netherlands	WW320	FCA Dordrecht	≈4.58	-0.05

These small week‑on‑week declines align with reports of cautious buying and rising freight and insurance costs, which squeeze margins at the processor and importer level. Spot premiums for top grades remain limited, as buyers perceive no immediate shortage and prefer hand‑to‑mouth coverage.

🌍 Supply & Demand Balance

Vietnam: aggressive raw nut procurement, softer export momentum
Vietnam has already imported more than 1 million tonnes of raw cashew nuts (RCN) year‑to‑date, with over 271,000 tonnes arriving in the first half of April alone at around 1,736 USD/tonne CIF, signalling intense global competition for raw material. Kernel exports exceed 156,000 tonnes so far this year, confirming Vietnam’s dominant role, but recent trade shows smaller lot sizes and more hesitant buyers.

The United States remains the key destination, while shipments to China and especially the UAE have weakened, mirroring softer consumption and the broader disruption in Gulf markets following the closure of the Strait of Hormuz and associated logistics shocks.

West Africa: strong crop, rising quality risk
Côte d’Ivoire arrivals have exceeded 850,000 tonnes, with total available volumes near 866,000 tonnes including pipeline stocks, underlining a strong West African crop. However, early rains and inadequate drying are elevating moisture and defect levels, pushing up rejection rates at processing units and export points and slowing purchases of lower‑grade material.

Similar issues are reported in Ghana and Nigeria, where the 2026 rainy season is starting on time to slightly early, increasing the risk of intermittent showers during harvest and drying. Demand for good‑quality West African RCN remains firm, but buyers are discriminating more sharply on outturn and kernel recovery, widening differentials between top and average lots.

India: mixed domestic demand, trade friction with Middle East
India’s domestic market shows uneven demand: some regions report steady household and snack industry consumption, while others see slower offtake due to regulatory constraints and high living costs curbing discretionary purchases. Imports are increasingly sourced from Nigeria and Ghana, with raw nut prices above 1,500 USD/tonne for better grades, maintaining a relatively high cost base for processors.

Since March 2026, exports to the Middle East have been disrupted by geopolitical tensions, constraining one of India’s important outlet regions and reinforcing processors’ cautious approach to forward sales and inventory building.

📊 Fundamentals & External Drivers

Global production near record, but not fully comfortable
Industry projections for 2025/26 put global RCN production around 6.4 million tonnes, with Western Africa contributing the bulk of incremental growth, especially Côte d’Ivoire, Nigeria and Guinea‑Bissau. This underpins the current sense of plentiful raw material, even as localized quality and logistics problems remain.

Logistics, freight and finance headwinds
The escalation of conflict around the Strait of Hormuz since early March 2026 has sharply raised freight costs and insurance premiums on routes serving the Middle East and, indirectly, Asia and Europe via higher bunker costs. Port congestion and container delays in parts of West Africa are compounding supply chain friction, increasing effective lead times and working‑capital needs for traders and processors.

Demand signals from key markets
In the US and EU, underlying retail demand for cashews remains broadly stable but price‑sensitive. Buyers are leveraging the perception of ample supply to negotiate harder on price and avoid long‑dated commitments. In China and the Middle East, demand has weakened more visibly, with Gulf import programmes disrupted and inventories re‑evaluated in light of high food inflation and logistical uncertainty.

⛅ Weather Outlook for Key Origins

In Côte d’Ivoire’s central belt, April conditions are seasonally hot and humid with frequent showers, consistent with the onset of the long rains, raising ongoing risks around field drying and storage for late‑harvest RCN. Ghana’s seasonal forecast points to a normal to slightly early rainy season, with an identified March–April dry spell but potential for heavy rainfall and localised waterlogging later, again highlighting the importance of rapid post‑harvest handling.

In Vietnam, mid‑April weather in major cashew areas has been reported as predominantly dry with slightly cooler temperatures, favourable for harvest completion and post‑harvest processing, supporting the current strong inflow of raw nuts into factories.

📆 Market Outlook & Trading Recommendations

Short‑term outlook (next 2–4 weeks)
The near‑term bias for kernel prices in EUR remains slightly downward to sideways. Abundant RCN arrivals in Vietnam and West Africa, combined with soft demand in China and the Middle East and cautious buying in mature markets, are likely to cap rallies. Any firmness should be limited to select high‑quality grades or origins facing acute logistics constraints.

🎯 Trading guidance

• Roasters & importers (EU/US): Continue hand‑to‑mouth or staggered buying for standard grades (WW320, WW240), using current slight softness to extend coverage modestly into early Q3, but avoid heavy forward commitments until demand signals in China and the Middle East stabilise.
• Processors (Vietnam, India): Prioritise procurement of higher‑quality African RCN even at a premium, while being disciplined on low‑grade purchases given higher rejection risks and softer kernel prices. Hedge logistics and freight exposure where possible rather than speculating on further cost escalation.
• Traders: Focus on quality‑differentiated marketing, emphasising reliable outturn and food‑safety credentials to defend premiums. Avoid excessive long physical positions in lower grades destined for price‑sensitive markets in the Middle East until trade routes and consumer demand normalise.

📍 3‑Day Regional Price Indication (Directional, in EUR)

• Vietnam FOB (WW320, WW240): Slightly soft to stable; minor downside risk if additional RCN arrivals outpace short‑term kernel sales.
• India FOB/FCA (W320, W240): Broadly stable; elevated raw material costs and disrupted Middle East exports limit room for aggressive price cuts.
• EU hub – Netherlands FCA (standard grades): Stable with a mild soft tone; adequate stocks and steady inflows allow buyers to negotiate but not expect a sharp correction.