India: Cashew Price remained Stable & Strong In 2021 Overall International market overview

Overall Scenario Of Cashew For The Year

• January and March witnessed a mixed trend in the spot market prices for all the cashew varieties.
• There was not much movement in the market for Cashew in February, April, May, and July.
• The market was appreciative of the commodity in August, October, November, and December
• June and September recorded a downward trend for the Cashew spot market.

Factors that Influenced The Cashew Market 

• Cashew prices fell due to the COVOI-19 earlier this year and improved gradually.
• The festival season and the wedding season helped the cashew market to recover.
• The rise in the freight rate, shortage of containers, and the impact of COVID-19’s second wave made the market unpredictable for the Cashews.
• The cashew prices in the domestic and international market were expected to pick up after July since the first quarter showed growth despite a sluggish market trend.
• However, due to the COVID-19 second wave, there has been a price drop in the market apart from sporadic increases.
• It was also believed that the Pandemic and its effect on south Asia, which has led to many Cashew consuming countries restricting their import, has caused the price drop in the market.
• Cashew was believed to have the edge over other dry fruits because of the shortage of Almond in the market as California was unable to produce the required quantity due to the draught.
• Since Cashew can be processed in India and the new Cashew crop arrives in the market with less interruption in supply, the crop has the edge over other dry fruits.
• With the factories already fully functional and operational, Cashew’s supply in the dry fruit market was steady. Therefore, any spike in demand was met without delay.
• Also, the usage of cashews in packed foods like snack bars and other supplements benefited the cashew farmers and traders in the coming days.

Current Situation 

• Overall, Cashew’s consumption has improved last year globally and has been on the rebound since April 2021.
• In contrast, compared to other countries, India’s consumption for the nut has been less in the last year but has been picking up in the previous two quarters.
• Furthermore, the COVID-19 restriction and the crunch in logistics have reduced the African Cashew being processed in India.
• As a result, it is hitting the RC arrivals in the country and Vietnam, which is having a ripple effect on the cashew market price, and it’s expected the effect will be long-lasting.
• However, it has been estimated to increase and go higher from Asia to the US and European countries. For example, Vietnam reported earlier this year the freight rate for the US is over $7500, and to Europe, it is about $6000. Moreover, despite these higher rates, it isn’t easy to find a container to ship the product.
• One of the cashew traders of India stated that if the situation continues, there will be disruption in prices and shipping of the products, which will affect the market negatively in the long run.
• On Tuesday, 21 September, the government of India announced its export of agricultural and processed food product report for the quarter of April to August. As per the report, cashew export has experienced an increased growth by 28.5% for April -August 2021. Compared to last year, India exported Cashew worth $144 million this year. The export amount was $185 million as per the statement released by the government.
• It has been reported that despite cashew nut growing to be a lucrative venture for the coastal areas of India, the farmers are shifting to other crops due to the middleman nexus.
• Growers have said that due to the lack of processing units and the impact of Pandemic, they were forced to sell their raw and unprocessed cashews at way lower prices than the market.
• The current scenario seems to be affirmative for the US and EU export market for cashews compared to last year with the easing of the COVID-19 lockdown restrictions.
• However, according to market experts, the market boost for the crop might soon take a downward trend since the cashew kernel market is getting saturated.
• It is getting difficult to find buyers soon as most quotations are asked for from March/April 2022. The lack of nearby buying is putting pressure on the price of the cashew auction market. But it is expected the demand will increase post-New year, which can prove beneficial for the cashew traders. Prediction India, one of the largest consumers of Cashew with 1.6 million metric tons, is projected to have a growth of a CAGR of 4% between the forecast period of 2021 and 2026.
• India is likely to have a better run in the international market with the Cashew despite lower overall international demand. If COVID-19 cases increase in Europe, it will negatively impact the African crop of 2021. The only factor that might hamper India’s global supply in Cashew is Vietnam, which might tap into Indian markets since they did not shut down the processing of cashews despite the lockdown.
• India is still the dominant exporter of cashews in West Asia.
• Furthermore, it is expected the demand for the nuts will continue to rise for New Year. Traders are hopeful to have an improved sale for dry fruits for the coming days from bakeries as plum cakes and Christmas cakes will be in demand.
• With vaccination drive picking up, the economy bouncing back, offices opening up, and fewer restrictions, the corporate are expected to play a massive role in supporting the market for cashews and other dry fruits. Hence, significant ordering of the commodities is expected from the conglomerates and bakeries during the upcoming festive seasons.
• According to market experts, with people having the money and wanting to celebrate after the Pandemic, there is a steady demand for the premium quality of cashews despite the overall lowering of the sale compared to last year.

• Price Chart

  W240

  Date	Price
  September 7  Lowest of the year	$8,216 per kg FOB
  August 23   Highest of the year	$10564 per kg FOB

   

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