REVIEW CASHEW MARKET
The meeting was held this week by the cotton and cashew council to discuss on the revision of the minimum prices and they decided that the prices be maintained as announced at the beginning of the campaign.
Following this decision to maintain minima prices, the majority of exporters halted their direct purchases. Only loads whose purchase had been pre-financed are still accepted. The consequence of this blocking situation is that dozens of trucks loaded with cashews are stuck in port without being able to find a buyer and that buying in the production areas are almost interrupted.
Very few traders are still buying cashew and according to some wholesalers the few stocks they hold are hard to resale. Prices as well as quality remains in a downtrend.
According to a small survey conducted with different farmers in each region, farmer’s stocks are now very low. The RCN currently being traded are largely imported (Guinea, Mali, Ivory Coast). The marketing campaign should therefore end in early June in Burkina Faso.
In Ghana, rains continue in cashew growing areas in the Brong-Ahafo region. In these conditions, the moisture content of nuts remains on average very high.
This situation has lead most of the major buying companies to withdraw from the market because most of them have already achieved their goals.
Despite the arrival of the rain season there is still enough sunshine for drying whatever little cashew is now being traded as most of the large exporters have now withdrawn from the market and increasingly focus on shipping out their stocks.
Prices are now starting to respond to this tapering in demand. Wholesalers are less sure of that their demand for higher prices for their stored stock will be met.
Shipping conditions remain challenging at the Lagos ports and this situation is unlikely to change anytime soon
Cashew exports to some major markets increased. In the first four months of this year, the average price of French cashew nut reached more than $ 11,114/ton, up 3.4% from last April. Similarly, exports to the United States reached 38,500 tons, valued at over $ 388 million, increased 33% in volume and 39% in value. Major markets of US cashew nuts such as America, Germany, Thailand, Russia ... have two-digit growth over the same period.
This week offers are given at around 4.25 USD/lbs for W320. On the other hand, this week witnessed a high demand for lower grade products, as LP is traded around 3.65 and many contracts were signed for July, August already.
Many processors believe that this is the bottom price for kernel and they will keep stock and not trade at any lower price. In our opinion, as most of the contracts signed in April are now arriving at the port, the processors will need cash to make payment. So we think the suppliers are willing to sell with lower price and cashew kernel orders have been quite low in recent weeks and cashew kernel prices have therefore decreased slightly.
Should you have any questions please free to write to us without any hesitation.