Cashew kernel prices stabilise at higher levels .

Kochi, March 28 Cashew market seems to have stabilised during the week at higher levels. Activity was, however, limited. But undertone continued to be firm, trading sources in Mumbai said. Prices were few cents higher than that of the previous week i.e., for W320 around $3.10, W320 around $2.90, W450 around $2.70 (f.o.b.).

Prices moved up in Indian domestic market as well, they said. Meanwhile, according to a latest revised export statistics of the Cashew Export Promotion Council of India (CEPC), the total shipments during April–February 2009-10 stood at 98,929 tonnes valued at Rs 2,660.04 crore against 1,00,124 tonnes valued at Rs 2,755.18 crore in the same period of the previous fiscal.

Value and volume

In terms of value, the decline was at Rs 95.14 crore. During the past six weeks, kernel traders seemed to have covered reasonable volumes for second quarter. “If they have bought adequate quantities to fulfil second quarter commitments and can keep away from the market for few weeks to cover second half needs, lack of activity could result in slightly lower prices in Apr/May, provided RCN (raw cashew nut) arrivals picked up”, Mr Pankaj N. Sampat, a Mumbai-based dealer told Business Line.

Raw cashew nut

RCN prices have also moved up, he said. Benin was quoted at around $1,000 a tonne; Ivory Coast (IVC) around $825 and Nigiera $725 (c&f).

There is some resistance to these higher levels as processors are not sure about kernel demand trend. Also, it is too early to estimate crop sizes in the major origins.

Meantime, varying reports of crop progress continue to confuse people, he said.

Although current prices are relatively attractive, processors are reluctant to make any large sales until they have bought few weeks requirement of RCN.

“They do not want to be caught short at a time when there is uncertainty about crops. As season progresses, they may find that things are not as bad as feared but nobody wants to take a chance – memories of second quarter of 2008 are still fresh”, he said.

Q1 Performance

Prices have moved 20 per cent down and 20 per cent up in the first quarter without any change in fundamentals, he said. “The decline was due to sentiment (lack of activity) and then the upward move was due to sentiment (value for money) and reaction to rumours (protective action).

Current prices are higher than historical average and even higher than 2009 average, but that should not have much impact on usage as that is the case with almost all commodities, especially nuts”, he said.

Considering everything, levels above $2.80 seem to be safe for processors to take some sales on the books. Similarly, levels below $2.65 should be safe for buyers to cover some volumes for future requirements and for inventory, which is seemingly low in major importing countries.

Source : Business Line