Cashew Market Holds Firm as Tanzanian RCN Auctions Tighten Margins

Global cashew prices are holding relatively firm, supported by elevated raw cashew nut (RCN) costs and strong Tanzanian auction activity, even as kernel demand remains only moderate. Processor margins, especially in Vietnam, are under pressure as kernel prices lag raw material costs, while India shows early signs of post-festive demand fatigue. Momentum in the physical market is concentrated at origin: Tanzania’s auctions have set new seasonal highs, Indonesian RCN offers remain competitive, and African processors are lifting their European presence. On the demand side, the European Union continues to post solid import growth, but price-sensitive buyers and weaker Indian domestic buying are limiting upside. Weather risks in East Africa and El Niño-linked heavy rains could disrupt Tanzanian harvesting and logistics, adding a layer of uncertainty as the 2026/27 season progresses.

Prices & Spreads

The global cashew market is broadly stable to firm. According to the latest market report, Vietnamese W180 kernels are quoted around US$4.50–4.60/lb FOB, W210 at US$4.10–4.40, W240 at US$3.50–3.60 and W320 at US$3.10–3.35. High RCN costs mean these kernel prices have not fully adjusted upwards, compressing processing margins. Indian kernels are trading at a premium to Vietnam and Africa. Indian W240 stands near US$4.20/lb FOB versus about US$3.55 for Vietnam and US$3.77 for African origins, while Indian W320 averages US$4.00/lb compared with roughly US$3.23 for Vietnam and US$3.45 for Africa. This premium reflects India’s strong brand positioning and domestic demand but is increasingly challenged by softer post-festive buying. On the EUR side, spot kernel indications confirm the generally firm but not rallying tone: Overall, whole-kernel benchmarks (WW240, WW320) in both USD and EUR have been remarkably steady in recent weeks, underscoring a balanced market where high origin costs offset only moderate demand gains.

Supply, Demand & Trade Flows

On the supply side, Tanzania is the key short-term driver. For the 2026/27 marketing season, about 141,915 tonnes of raw cashews had been placed into official warehouses by 25 October. Weekly auctions are brisk: roughly 9,882 tonnes were sold in the week ending 25 October, taking cumulative auction sales to 112,260 tonnes. Standard-grade RCN prices at Tanzanian auctions are reported at US$1.23–1.30/kg, with the upper end setting a new seasonal high. A broad buying base – 90 participating companies, 57 of which secured purchases – highlights intense competition for quality RCN. Parallel offers show Tanzanian RCN at US$1,860–1,990/tonne CNF Ho Chi Minh City, while Indonesian 49 lb/200 count material is offered around US$1,720/tonne, making Indonesia a relative value for some Asian buyers. Demand is led by Europe, where kernel imports continue to expand despite only moderate end-consumption growth. During January–July 2026, EU cashew kernel imports rose 5.79% year-on-year to 150,209 tonnes, with import expenditure up 12.11% to about US$1.12 billion and average import prices at US$7,486/tonne. Germany remains the largest buyer, followed by the Netherlands, France, Italy, Spain and Poland. African processors are capturing a growing share of this trade. EU imports from African origins climbed 33.19% to 36,136 tonnes in January–August 2026, with Côte d'Ivoire accounting for about 80.7% (29,175 tonnes). This underscores a gradual rebalancing of value addition towards origin countries, supported by investment and policy initiatives. In India, domestic kernel prices are broadly steady but now face downward pressure after the festive season. The easing of Indian retail and gifting demand reduces immediate upside for premium grades, contributing to the current plateau in global kernel prices.

Fundamentals & Margins

The core market tension lies in the mismatch between stubbornly high RCN costs and only modest kernel price appreciation. Elevated offers from Tanzania and relatively firm Indonesian and West African RCN benchmarks keep replacement costs high for processors, particularly in Vietnam. Vietnamese processors are responding with caution. Many are actively selling existing kernel inventories and delaying fresh RCN purchases, preferring to avoid locking in expensive raw material against still-resisted kernel prices. This strategy helps manage margin risk but could tighten kernel availability later in the season if demand improves. Processing margins remain compressed. With Vietnamese W320 FOB around US$3.10–3.35/lb and Tanzanian CNF offers approaching US$1,900/tonne, processors have limited room for discounting. Industry experts expect current RCN price levels in Tanzania to be difficult to sustain across all origins, but for now they act as a floor, limiting any sizeable kernel price correction. Structurally, investment continues to reshape the sector. A new 20,000-tonne-capacity cashew processing facility in Andhra Pradesh and ongoing cooperation and financing initiatives in Africa point to gradual expansion of origin processing. Over time, this may strengthen bargaining power at origin and diversify supply for European and Asian buyers.

Weather & Tanzanian Harvest Risk

Weather is a critical short-term risk factor. Tanzania’s meteorological authorities forecast increased rainfall during November, which could disrupt harvesting, drying, storage and transport of cashews from key producing regions. Recent outlooks highlight above-normal to normal rains linked to strong El Niño signals and a positive Indian Ocean Dipole, with a heightened risk of localized flooding and waterlogging. Regional updates for northern Tanzania (Arusha, Kilimanjaro, Manyara, Tanga) point to wetter-than-usual conditions and frequent showers in late October and early November, implying more challenging field access and higher quality risk for nuts left on the ground or insufficiently dried. Farmers and traders are being advised to improve drainage, protect stocks and closely follow updated weather bulletins. If heavy rains persist into the peak harvest window, short-term logistics bottlenecks could delay RCN flows to auction centers and ports, temporarily tightening nearby kernel supply. However, this is more a timing and quality issue than a clear-cut volume loss at this stage.

4–6 Week Outlook & Trading Ideas

Industry experts currently anticipate broadly stable cashew prices in the coming weeks. Elevated RCN values and active Tanzanian procurement provide a floor under the market, while subdued kernel demand, squeezed Vietnamese margins and softer Indian post-festive buying cap the upside. Key expectations (next 4–6 weeks)

• Global kernel prices to remain firm but range-bound, with limited downside due to high replacement costs.
• Premium Tanzanian RCN likely to stay well supported in the short term, though current price peaks may prove hard to sustain if demand softens or weather hampers quality.
• European import demand should continue to underpin trade flows, while Indian domestic demand consolidates after the festive peak.
• Weather-related disruptions in Tanzania could create temporary tightness in nearby RCN availability and support nearby kernel positions.

Trading outlook – focus points for market participants

• Roasters & industrial buyers (EU/US): Use current sideways kernel prices to extend coverage modestly into early 2027, especially for WW320 and W240, but avoid over-committing at the top of the RCN cost cycle.
• Importers in Europe: Diversify origin exposure between Vietnam, India and African processors, leveraging Africa’s growing export share while monitoring quality and certification requirements.
• Origin processors (Vietnam, India, Africa): Maintain disciplined RCN procurement; prioritize margin protection over volume growth until there is clear evidence of stronger kernel demand or easing RCN prices.
• Traders & brokers: Watch Tanzanian auction dynamics and November rainfall closely. Any sign of quality deterioration or slower arrivals may briefly widen nearby kernel spreads.

Short-Term Directional View (3-Day)

• Vietnam (FOB Hanoi kernels): Sideways over the next three days, with WW320 around the current EUR level and offers supported by high RCN costs.
• India (FOB New Delhi kernels): Mildly soft tone on the domestic side post-festive, but export quotes expected to hold broadly steady given cost structure.
• EU (FCA Netherlands kernels): Stable prices with a slight firm bias in nearby positions as buyers finalize year-end and early-2027 cover.
• Tanzania (RCN at auction/ports): Firm to slightly higher, but with rising sensitivity to quality and weather-related disruptions.