Cashew Market: Firm RCN Costs Meet Cautious Kernel Demand

Global cashew prices remain underpinned by high raw cashew nut (RCN) costs and strong Tanzanian auction activity, while soft kernel demand and cautious buying are limiting further upside. Indian festive demand provides short-term support, especially for WW320 and broken grades. The current marketing season is defined by a disconnect: farmers and origin countries are benefiting from firm RCN prices, but processors and kernel buyers face tight margins and uncertain downstream demand. Tanzania’s auctions are clearing good volumes at elevated levels, Vietnam is evaluating alternative RCN origins, and European kernel buyers are mostly covering nearby needs only. India’s Diwali-driven consumption is one of the few bright spots on the demand side. Over the coming months, the balance between high raw material costs and hesitant kernel demand will determine whether prices consolidate or correct.

Prices & Spreads

RCN prices for the 2026/27 season are firm. Tanzanian RCN is reported around US$2,080/mt CNF Vietnam for 53 lb outturn and 190 nut count, a level many Vietnamese processors consider commercially unattractive. Competing RCN offers into Ho Chi Minh City include Indonesia at about US$1,770/mt, Côte d'Ivoire at US$1,630/mt and Boke-origin around US$1,675/mt, with quality differences limiting direct comparisons.

Kernel benchmarks show only modest upside so far. Limited European business was reported near US$3.10–3.12/lb for W320 and US$3.47–3.50/lb for W240. Indicative Vietnamese FOB offers currently cluster around: W320 at US$3.10–3.35/lb and W240 at US$3.50–3.60/lb, with W180 at US$4.50–4.60/lb, W210 at US$4.10–4.40/lb, WS at US$2.55–2.75/lb, LP at US$1.90–2.20/lb and SP at US$1.40–1.60/lb.

Quoted EUR prices confirm a slightly firmer tone for Vietnamese kernels in recent weeks. In Hanoi (FOB), WW240 is indicated at 8.10 EUR/kg, WW320 at 7.20 EUR/kg, WS at 6.10 EUR/kg, LP at 5.28 EUR/kg, LWP at 5.61 EUR/kg and SP at 4.65 EUR/kg as of 17 October. In New Delhi (FOB), brownish white W240 is at 7.60 EUR/kg (conventional) and 8.00 EUR/kg (organic), while W320 stands at 7.10 EUR/kg conventional and 8.75 EUR/kg organic. In Dordrecht (FCA EU), WW320 is quoted at 5.20 EUR/kg conventional and 6.30 EUR/kg organic.

Supply, Demand & Tanzanian Auctions

Tanzania’s 2026/27 RCN season is progressing with strong auction activity. About 103,000 tonnes of RCN have reportedly been delivered to warehouses so far, with cumulative auction sales near 69,236 tonnes, indicating active procurement and good farmer participation. The 19 October auction cleared standard-grade RCN between US$1.18 and US$1.27/kg, while the Ruvuma–Tunduru auction on 20 October sold roughly 1,454 tonnes at US$1.20–1.21/kg.

These elevated shilling-based auction prices align with recent indicative farm-gate levels published in Tanzania’s coastal regions and reinforce a firm cost base for processors and traders. Tanzanian supply is helping bridge the Northern Hemisphere off-season, while growing RCN shipments from Cambodia into Vietnam increase origin diversification and give processors additional bargaining leverage versus some African suppliers. Overall RCN availability is adequate, but at a cost structure that leaves little room for kernel price weakness without margin compression.

On the demand side, international kernel buying remains subdued. European importers have largely closed major retail tenders for 2027 deliveries and are now focused on selective spot and nearby Q1–Q2 2027 cover, often splitting volumes among origins to maintain flexibility. Reports from Vietnam point to softer Q3 exports alongside firm average export unit values, suggesting that higher prices are meeting some resistance in destination markets.

Kernel Fundamentals & Regional Dynamics

Kernel negotiations are concentrated on Q1–Q2 2027, with both buyers and sellers reluctant to commit further forward. Sellers are cautious to offer beyond June due to uncertainty over later-season RCN costs, particularly if weather or policy developments tighten supply. Buyers, facing global inflation, high energy costs and fragile consumer confidence, are prioritising price over long-term security and are spreading purchases over time.

In India, domestic demand is comparatively healthy into the Diwali period. WW320 is the key grade, absorbing steady buying from retail, sweets and snack manufacturers, and institutional channels. Broken grades such as WS and LP also see solid offtake from bakeries and food processors. However, the market is price sensitive: higher offers clear only selectively, especially for premium whole grades like WW240 and WW180, which remain tight in availability.

International comparisons underline India’s pricing premium. Around 21 October, average Indian W240 export quotations were about US$4.20/lb versus roughly US$3.55/lb for Vietnam and US$3.78/lb for Africa. For W320, India averaged near US$4.00/lb, compared with about US$3.25/lb in Vietnam and US$3.45/lb in Africa. This premium reflects brand perception, strong domestic demand and more limited export-oriented processing capacity compared with Vietnam.

Weather & Structural Developments

Weather in key producing regions is seasonally mixed but not yet market-disruptive. East African orchards are moving through early-season phases where rainfall distribution will influence flowering and nut set; so far, no major weather shocks have been reported that would significantly alter 2026/27 output expectations. In Southeast Asia, current conditions in Cambodia and Vietnam remain broadly supportive for RCN flows into Vietnamese factories.

Beyond the current season, several structural initiatives could reshape supply and cost curves. A US$60 million guarantee for an energy project based on cashew-processing waste highlights the potential to lower operating costs and improve sustainability in processing hubs. Parallel agricultural technology programmes targeting roughly 300,000 hectares of low-yielding orchards aim to raise productivity, while Ghana and other African origins are investing in processing skills and export infrastructure to capture more value locally.

Outlook & Trading Recommendations

Near term, the market is likely to remain supported rather than strongly bullish. High RCN procurement costs, strong Tanzanian auction results and firm Indian festive demand underpin the floor, but subdued kernel demand in Europe and other mature markets limits upside. Much will depend on whether post-Diwali and early-2027 pipeline replenishment is stronger than currently anticipated.

For Q1–Q2 2027, the base case is for steady to slightly firmer kernel prices if RCN costs remain elevated and no major demand shock materialises. A downside correction would require either a significant softening of RCN prices—e.g. from larger-than-expected arrivals or policy shifts—or a sharper-than-expected slowdown in consumer demand. Volatility around grade differentials may increase, with tight premium whole grades contrasting with more available broken fractions.

• Buyers (roasters, retailers): Stagger Q1–Q2 2027 coverage, prioritising WW320 and WS/LP where Indian premiums and Tanzanian RCN costs suggest limited downside. Use current selective demand to negotiate origin diversification and quality flex.
• Processors: Avoid overcommitting to low-priced kernel contracts against high-cost RCN. Focus on efficiency gains and value-added products to protect margins, and leverage alternative origins like Cambodia and Indonesia where quality fits.
• Producers & traders: Use strong Tanzanian auction momentum to lock in favourable returns, but be cautious of potential demand-driven corrections later in the season. Monitor European and North American retail trends closely for early signs of slowing consumption.

3-Day Directional Price Indication

• Vietnam, FOB Hanoi kernels: Sideways to mildly firm across WW240/WW320 and main broken grades as high RCN costs meet cautious but steady buying.
• India, FOB New Delhi kernels: Mostly steady for W240/W320, with a firm tone sustained by Diwali demand, especially in WW320 and popular broken grades.
• EU, FCA Dordrecht kernels: Stable to slightly firmer, reflecting higher replacement costs from origin and limited nearby spot liquidity in top grades.