International cashew need is likely to be flat this year due to a weak economy in most countries on the back of inflation and the Russia-Ukraine war.
According to traders, kernel availability is expected to be less in 2022 compared to last year, owing to reduced yields in most growing regions.
Pankaj N Sampat of Samsons Traders said logistic problems continue to beset the cashew sector, especially longer transit time due to blockages in China and congestion in ports leading to rollovers and cancellations. With oil prices above $100, chances of relief in freight rates in the medium term are bleak.
Lower than expected
At the beginning of the year, the cashew industry was looking at a comfortable supply, steady growth in demand, and a flat market. Now it is almost certain that crops in Vietnam and Cambodia are significantly lower than initial expectations. There is some concern in parts of India and West Africa, but the impact is unlikely to be large, Sampat said.
Despite kernel prices remaining flat in the first quarter of 2022, raw cashew nut prices were firm, moved up and started trading at around $1.200 and touched $1.275-1.300, he said. They continued moving up in April, with recent trades at $1.350-1.370. Premium origins such as Benin, Senegal, and the Gambia are trading above $1.650.
However, kernel prices fell 7-8 percent in the first quarter, with Vietnam W320 trading in the $2,85-3,00 range at the beginning of the year and $2,60-2,80 FOB. During April, the prices moved up to $2,90-3,10 FOB. African kernels have been trading at almost the same level (C&F) as the higher end of Vietnam prices.
According to Sampat, discerning buyers have been willing to pay a premium for better quality, traceability, and sustainability. With premium quality, Indian processors continue to sell at a significant premium to Vietnam and Africa, although India’s share of global kernel trade is down to about 10 percent.
Value-addition hit
J Rajmohan Pillai, Chairman, Beta Group, which owns the brand Nut King, said value-added activities have been affected as a disrupted distribution channel tends to lower the market value of end-products of cashew nuts. The need of the hour is Government funds and schemes to increase the production and marketing of cashews, he said.
Source: The Hindu Business Line
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