The Hindu Business Line : Steady outlook for cashew

WITH supplies of raw cashew and demand for kernels fairly evenly poised, prospects of volatility— run away boom or sharp decline — in the global cashew market are rated low for the current year. Prices are expected to be steady, moving in a narrow range even as international buy/sell transactions take place on ``as needed'' basis.

According to Mr Pankaj Sampat of Samsons Trading Company, an edible nut trade intermediary, global raw cashew supplies in the current year are estimated to be unchanged from last year at 10.47 lakh tonnes (lt), although there will be variation in the contribution from different origins.

India's output is assumed at 3.5 lt, up from 3.0 lt of last year. India also imported close to 3 lt of raw cashew during the year for processing, resulting in kernel production of close to 6 ml. cartons last year.

On the basis of estimated supplies, production of cashew kernels for the year is projected to range between 10.0 million and 10.5 million cartons. Mr Sampat has estimated the global consumption demand for cashew kernels at 9.65 million (ml) cartons, comprising in the main the US and Canada 4.0 ml, India 2.0 ml and Europe 1.5 ml cartons.

The excess supply of about half a million cartons is unlikely to impact the market in any significant manner as even a small expansion in demand or contraction in supplies can wipe the surplus out, it is believed.

Kernel prices have been ruling rather low - below $2 per pound - for over a year now and are currently in the range of $1.70-1.80 per pound. These consumer-friendly prices have encouraged steady consumption despite economic slowdown in the global market.

For the same reasons_ low prices and continued future expectations_ roasters/packers and dealers are not inclined to build inventory.Similarly, processors are not keen to effect forward sales in large quantities, although some small volumes are traded from time to time.

``If there are no major surprises on the supply side, we can expect steady prices in a narrow range. As the volume of forward sales is low, the market will continue to see spurts of activity, decline or rise in prices'', Mr Sampat reasoned. Interestingly, in May/June last year, raw cashew supplies from West Africa were disrupted resulting in tightness in availability.

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