Nuts

Cashews: export demand supports the market

June 3, 2020 2:49 PM, Der AUDITOR
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HANOI/NEW DELHI. The weak demand from the domestic market as well as from the main customer country India gives Vietnamese traders food for thought. These circumstances are also reflected in the prices. The supply of RCN could become critical in Q4.

Significant drop in demand

Although the cashew market is still quite stable at the moment, Vietnamese market players have been expressing concerns for some time about the decline in domestic demand. Also in India, the largest consumer of cashew nuts, consumption has dropped significantly due to the long lockdown. This is partly due to lower demand from the catering industry and partly to the fact that many large celebrations such as weddings, which are usually celebrated more frequently in summer, are cancelled due to the coronavirus pandemic.

Price reductions

Export demand, especially from the EU and the USA, remains satisfactory for traders. A development is difficult to predict, as the economic situation of the individual countries will also have an impact on consumer behaviour. For now, market players in Vietnam expect demand from overseas to remain stable. Currently, cashews, W320, are traded at EUR 5.99 per kg on the European spot market. Slight price reductions can also be observed in Indian prices.

Cashew prices, India

Type

USD/kg

W240

9.38

W320

8.16

W450

7.25

LWP

7.10

SWP

6.22

FOB India

RCN situation uncertain

The availability of RCN is not a problem at present. At the moment the crops from Vietnam and Cambodia are being processed, these will last until about the beginning of August to keep the production going. After that it could become more problematic as a large part of the RCN is stored in West Africa and the storage conditions there often have a negative effect on the products. Meanwhile, Guinea-Bissau, another major supplier of RCN, remains under the lockdown. What effects this will have on the harvest and export situations not yet clear.

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