Cashew market update
The market at a glance
In Nigeria, despite the recent downpours in the coastal areas, the weather in the cashew producing belt continues to be hot and dry as is usual at this time of the year.
Whilst the harvest has barely started in the Western part of the country it continues to gather steam in the Eastern part.
At the farm-gate prices rose modestly from 185 to 190 NGN/kg last week to 195 to 200 NGN/kg this week, on modest buying by village aggregators in preparation for the take off.
A few more export companies are opening up their operations in the Eastern part, however unlike last year advances are not being made to the LBAs (local buyers).
The tone is generally one of caution as the trade stakeholders await developments.
In Benin, compared to last week, commercial activities are still very timid throughout the country except in the central and southern regions where the scales are moving more and more and purchases are made every day.
The places where these sales are recorded on the market are always the same: Savalou, Bantè, Ouèssè, Glazoué, Zakpota and Zagnanado in the Center and Adja-Ouèrè and Kétou in South-East Benin.
In Ghana, the conditions are not very different from last week, as stocks continue to accumulate gradually in areas such as Wenchi, Techima and Nkoranza in the Bring Ahafo region.
Weather conditions remain favorable with sunny and dry conditions in these regions.
In Côte d’Ivoire, the cashew market is generally calm. However, there is a slight activity in the border area of Ghana.
The new crop trading that began last week is progressively continuing, as stockpiles begin to grow slowly.
The old stocks that are in the hands of local producers and buyers are struggling to be released, which should increase the total supply this year compared to the previous campaign.
In the field, while stocks are being built up, only village buyers are active on own funds and the others are waiting for the official prices to be set by the government.
By contrast, in Zanzan, Ghanaian buyers are already very active looking for new good quality nuts and are driving up prices.
At the level of the Cotton and Cashew Council, it is the preparations for launching the campaign that are on the menu. The name of the buyers approved for the purchase of raw cashew this year is not yet available but it will not delay according to actors met.
The market prices of small trade are this week between 250 and 500 FCFA/kg (0.44 to 0.87 USD/kg) depending on the production areas. As for wholesale and port exchanges, they still remain linked to the official launch of the campaign.
For now, the weather remains favorable to a good production of cashew nuts but there is more and more windy weather with strong sunshine that is unfavorable to flowering.
Tanzania to seek international market for cashew nuts.
The government on Tuesday January 29 said it is planning to sell 200,000 tonnes of cashew nuts as it seeks international markets.
The Deputy Minister for Agriculture Mr Innocent Bashungwa said the government was now in talks with international buyers and we will soon be able to sell 200,000 tonnes to markets across the country.
The price is around 1750-1800 CFR HCM, Vietnam.
The international cashew market
This week, despite the Tet holiday in Vietnam, which significantly reduced the supply on the market, buyers were also rather absent and cashew kernel prices fell again slightly.
Similarly, the first signings of export contracts, mainly for Ghana and Nigeria, where exports do not have to wait for an official launch, are at prices below those initially discussed.
Overall, the sentiment of both Asian processors and Western roasters/packers is that supply will be good this year and prices should continue to fall during the season.
The opinion of the analyst
Most of players in the international cashew market are clearly expressing their bearish expectations in recent weeks.
Almost everyone agrees to anticipate good harvests throughout the northern hemisphere and rather early harvests that will limit the lack of raw nuts during the beginning of the year due to the absence of Tanzanian nuts in processing plants in Asia.
In these circumstances, nobody seems ready to take the risk of signing long-term contracts, even less with prices that have remained rather high, up to now.