Cashew Market Softens as West African RCN Meets Cautious Kernel Demand

Cashew prices are entering a softer phase as West African raw nut offers retreat while kernel demand in Europe and the US remains subdued, leaving Vietnam with comfortable inventories and keeping overall price action narrowly range‑bound in the short term. The market is finely balanced. Raw cashew nut (RCN) prices out of West Africa are easing on seller pressure, but this is not yet translating into a decisive break lower in kernel values because processors in Vietnam and India are squeezed by weak currencies and high energy costs. Europe is largely covered nearby and waiting, the US is buying selectively, while China continues to underpin larger whole grades. Against the backdrop of elevated oil prices and heightened freight and currency risk linked to the Strait of Hormuz crisis, most participants expect a low‑volatility but fragile cashew market over the next two to four weeks.

Prices & Spreads

West African RCN offers have slipped across key origins. Guinea Bissau 53‑lb material is quoted around USD 1,680–1,690/mt CFR, Senegal 52‑lb at USD 1,630–1,640/mt CFR, and Burkina Faso 45‑lb at roughly USD 1,375/mt for June shipment. The downward adjustment reflects more traders trying to move stock than Vietnamese processors are willing to absorb at current kernel realisations.

On kernels, recent deals into the US placed W320 around USD 3.03–3.05/lb and W240 near USD 3.30/lb, while the physical European market is quieter with buyers mostly covered short term. Spot Vietnam FOB indications from offers imply roughly EUR 6.2–6.3/kg for WW320 and about EUR 7.0–7.1/kg for WW240, using an indicative USD/EUR rate of 1.08. EU warehouse positions in the Netherlands show discounted levels versus origin, reflecting ample supply and muted nearby demand.

Supply & Demand Balance

Vietnam remains the centre of gravity on the supply side. Processors are holding comfortable kernel stocks after a strong export performance: April shipments reached roughly 68,800 mt, with January–April exports near 194,000 mt at an average export value just under USD 7,000/mt. China is the leading buyer of large whole grades (W180, W240), followed closely by the US, while the Netherlands is the key entry point into Europe.

Yet despite this export pace, RCN buying has been restrained. Vietnamese processors have taken very little West African RCN in the first four months of 2026 and are only tentatively re‑entering the market, contributing to softer farm and export prices in Africa. Nigeria’s season is underperforming, farm‑gate levels having dropped from 1,500–1,550 to about 1,400 naira/kg, while Côte d’Ivoire’s crop is largely harvested with lower‑quality lots rejected at port, delaying shipments and leaving some traders exposed.

On the demand side, the US shows steady interest at current kernel levels, while Europe is clearly in wait‑and‑see mode, having covered near‑term needs and monitoring whether Vietnam will cut offers to clear stocks. China’s healthy appetite for top grades creates a two‑tier market, supporting premiums on W180/W240 even as mid‑grades like W320 and brokens face greater resistance.

Fundamentals & External Drivers

India adds another layer of complexity. Warehouses at Tuticorin are full of Ghana-origin RCN, but domestic buyers remain hesitant despite acceptable quality. The Indian rupee’s sustained weakness above 96 per USD is inflating import and processing costs, compressing margins on new RCN purchases and limiting processors’ willingness to chase raw material even at discounted West African levels.

Macro‑level energy and freight dynamics are working against processors. The ongoing closure and disruption of traffic through the Strait of Hormuz has pushed Brent crude into the USD 109–114/bbl range with spikes higher, and international agencies now characterise the situation as the largest oil supply disruption on record, with several million barrels per day shut in. This is lifting bunker and container freight costs and weakening currencies such as the Indian rupee, directly raising landed RCN and export costs for key cashew processing hubs.

Logistics remain uneven in origin countries. Persistent container shortages in Lagos continue to slow Nigerian exports, while strict quality controls at Ivorian ports cause delays as poor lots are rejected. Cambodia’s crop size and quality are still an important swing factor: a larger, good‑quality crop would cap any RCN price recovery; a disappointment could quickly tighten nearby supply, especially given Vietnam’s dependence on Cambodian inflows.

Weather & Crop Outlook

In the short term, weather in key producing regions is seasonally less critical than currency and logistics, as the main West African harvest is effectively complete and Vietnam, Cambodia and India have already formed their current‑year crop prospects. Available forecasts point to generally typical conditions across mainland Southeast Asia and coastal West Africa in the coming week, with no immediate extremes that would alter 2026 output expectations.

Market attention is therefore focused more on quality outcomes and late‑season handling than on additional volume gains. In Côte d’Ivoire and Nigeria, the key issue is sorting and exportability of remaining lower‑grade lots; in Cambodia and Vietnam, traders are watching kernel recovery and outturn ratios closely to judge effective supply of higher count whole grades.

Short‑Term Outlook (2–4 Weeks)

The near‑term trajectory is moderately bearish for RCN and broadly sideways for kernels. With more sellers than buyers in West Africa and Vietnamese processors not under acute coverage pressure, RCN prices are likely to stay soft or ease marginally further, especially for lower outturn and off‑spec lots. Any meaningful rebound would likely require either a negative surprise in Cambodia’s crop or a sharp pickup in kernel demand.

Kernel prices, by contrast, are expected to fluctuate within a relatively narrow band. Strong Chinese interest should keep a floor under large whole grades, while subdued European spot buying caps upside for W320 and brokens. The key risk lies in FX and energy: a further rupee slide or another leg higher in oil and freight costs could force processors to lift offers despite weak demand, squeezing downstream buyers.

Trading Recommendations

• European importers: With nearby cover largely in place and origin RCN softening, consider staggered additional coverage on W320 and LWP for Q3 on dips, but avoid over‑committing ahead of clearer signals on Vietnam offers and Cambodia’s crop.
• US buyers: Current W320 trades around USD 3.03–3.05/lb offer reasonable value; light forward buying in Q3–Q4 makes sense, focusing on quality spreads and maintaining flexibility in shipment windows.
• Asian traders & roasters: Leverage strong Chinese demand for premium whole grades by maintaining length in W180/W240, while being more cautious on brokens and lower grades where downside risk remains higher if European demand stays muted.
• RCN suppliers in West Africa: Prioritise quick movement of lower‑quality stocks and be prepared for further modest price concessions; holding out for significantly higher levels in the next few weeks appears risky given current kernel dynamics.

3‑Day Regional Price Indication (Directional)

• Vietnam kernels (FOB, all grades): Stable to slightly softer in EUR terms; processors are well covered and competing for demand.
• India kernels (FOB/FCA, all grades): Largely stable, with mild upward pressure from FX and freight partly offset by cautious domestic and export demand.
• EU warehouse (FCA Netherlands): Stable with a slight soft bias for mid‑grades and brokens due to good availability and passive spot buying; premiums for large whole grades steady.