Cashews

March 15, 2018

Cashew prices have fallen over the last month as reports continue to come in that the
upcoming new crop is looking healthy. Supplies of cashews are expected to increase
year on year, which has prompted buyers to remain short and only buy hand to mouth.
There has also been some recent downward pressure on raw cashew nut (RCN) prices
out of Africa, which has helped to bring kernel values lower. The African harvest is
progressing well and similar to the theme above the crop is expected to be larger year
on year. Although until now RCN prices have remained elevated and well above where
they should be, as farmers and traders have held stock back from the market. What’s
changed this is a recent speech by the head of the Vietnamese cashew industry, who
called on Vietnamese processors to temporarily suspend purchases of RCN from Africa
in order to bring the price down.
At the moment there is a bearish sentiment in the market, however buyers need to keep
in mind that US demand increased last year with prices at record highs. Therefore with
values now below last years average price, there may be a pick up in demand. What’s
also worth mentioning is that the supply of global cashew processing capacity far
outstrips global supply of actual cashews. Which means you might have processors
bidding up prices to ensure they get supply in order to keep their factories running – it’s
cheaper to break even processing cashews than to have a factory sitting idle.