East Africa Sets Up a Strong Cashew Crop as Kernel Prices Edge Higher

Favourable dry-season weather in Tanzania and Mozambique is laying the groundwork for a solid 2026/27 East African cashew crop, while kernel prices at key processing and trading hubs are inching higher in a generally firm global market. Kernel prices for main grades such as W240, W320 and W450 have been edging up in India, Vietnam and Europe, and East Africa’s healthy orchards now add a potential medium-term supply cushion. For the moment, however, global availability still reflects past tightness in raw cashew nuts and robust kernel demand, keeping prices broadly supported. Market participants should watch the next flowering and nut‑setting phases closely: any late weather or pest shock in East Africa could quickly tighten balances again.

Weather & Crop Outlook: Tanzania and Mozambique

July brought a classic dry-season pattern across southern Tanzania’s main cashew belt (Mtwara, Lindi, Ruvuma-Tunduru), with less than 15 mm of rainfall and many locations registering virtually no measurable precipitation. Strong sunshine above eight hours per day, low humidity and stable winds created ideal conditions for cashew flowering and early fruit development.

Temperatures were moderate, with daytime highs around 24–28°C and cool early mornings (14–18°C). This avoided heat stress above 36°C that can damage delicate flowers and young nuts. The dry atmosphere favoured pollination and significantly reduced fungal pressure, lowering the need for emergency sulphur dusting and fungicide sprays. Similar cool, dry conditions in Mozambique’s key provinces (Nampula, Cabo Delgado, Zambézia) supported orchards through pre‑flowering and early flowering, also helping to synchronise flower-panicle development. Overall, East Africa is entering the 2026/27 season with orchards in good physiological shape, though final output will still depend on late flowering, nut‑set, pest control and pre-harvest weather.

Prices: Gradual Firming in Kernels

Recent offers indicate a mildly firmer tone in kernel markets. In India (New Delhi, FOB), non‑organic W320 is quoted around 7.10 EUR/kg, W240 roughly 7.60 EUR/kg and W450 about 6.40 EUR/kg, all slightly above mid‑July levels. Organic W320 hovers near 8.75 EUR/kg, with organic W240 stable around 7.98 EUR/kg. Broken grades such as LWP and SWP also show incremental gains.

Vietnamese kernels (Hanoi, FOB) mirror this firmness, with WW240 close to 7.82 EUR/kg and WW320 around 6.92 EUR/kg. European spot values in the Netherlands (Dordrecht, FCA) for WW320 are about 5.05 EUR/kg for conventional and 6.15 EUR/kg for organic, up a few cents over the month. These modest increases are consistent with an underlying firm global market shaped by earlier raw nut tightness and steady demand, while the upcoming East African crop is not yet physically available to ease nearby supply.

Supply, Demand & Fundamentals

On the supply side, the good July conditions in Tanzania and Mozambique point to healthier nut outturn and potentially better kernel size distribution when the East African harvest starts around October–November. Lower disease pressure should support both yields and quality, improving shelling recovery and exportable kernel availability from the region later in the 2026/27 season.

Globally, kernel demand remains underpinned by snack, confectionery and healthy-ingredient usage. Earlier tightness in raw cashew nut supplies and firm origin costs in India and Vietnam have already worked into kernel prices, which remain historically elevated in many export markets. For now, the market is balancing expectations of improved East African supply against still‑firm upstream costs and buyers’ price sensitivity, resulting in gradual, not explosive, price moves.

Short-Term Outlook & Trading Ideas

Weather forecasts for early August suggest continued seasonally dry, cool conditions across southern Tanzania and northern/central Mozambique, which should help sustain flowering and early nut development. The key risks to the bullish crop view are unseasonal rains, late pest outbreaks or heat spikes during the main nut‑setting phase in the coming weeks.

• Buyers (roasters, packers): Consider covering a portion of Q4 2026 and early Q1 2027 needs at current WW320/W240 levels, especially for organic grades, while retaining some flexibility in case East African arrivals later cap prices.
• Origin sellers (Tanzania, Mozambique): Use the favourable crop outlook and firm kernel prices to plan forward sales but avoid overcommitting before nut‑set is secure; basis premiums for high outturn lots could strengthen.
• Traders: Watch differentials between Vietnam/India FOB and European FCA levels; modest further firming is likely if demand holds and no major weather shock occurs, but a large East African crop could flatten spreads into early 2027.

3‑day directional view (EUR, spot/nearby): Indian and Vietnamese WW320 and W240 offers are expected to trade steady to slightly firmer, while European FCA values in the Netherlands should remain broadly stable with a mild upward bias on tight nearby availability.