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Cashew prices crash

Our Bureau

MUMBAI, Feb. 21

THE cashew market seems to be no exception to the general decline in the global agri-commodity markets with prices reaching new lows. A gradual slide in cashew prices over the last 4-6 weeks has now led a crash below the psychological level of $2 per pou nd.

Some business was reportedly done at the level of $2.10-2.20 free-on-board during December-January for shipment during the first quarter of 2001. Some volume was traded for April-June and July-September quarters as well.

In the last two weeks, however, prices have declined rapidly. This week, W320s were traded at as low as $1.90 by small/ medium packers and at $1.95 by large packers. For W240s, the quotes moved down from $2.40 to $2.30.

After a period of stability in November, prices started to slide in December and the fall has been pronounced in the last few weeks, according to Mr Pankaj Sampat, a reputed edible nut dealer. ``We have reached levels not seen in the Nineties and are clo se to lows seen more than 15 years ago,'' he lamented.

Supply situation for 2001 seems comfortable following normal to good crops in Brazil, Indonesia and East Africa, while conditions for the upcoming crops in Vietnam, India and West Africa are favourable. ``Unless something dramatic happens in the next 6-8 weeks, we can expect reasonably good quantities of crop, but nothing can be said about quality,'' Mr Sampat asserted.

There is belief that prices will be soft for the next few weeks due to pressure of new crop as over half the world production will be available in the next 3-4 months. Many are concerned that further decline in prices will render collection and marketing of raw cashew unattractive. Whether raw cashew prices will soon bottom out is difficult to predict, said marketmen.

However, with prices ruling at low levels, many see the possibility of promotional efforts to raise consumption and stock building. They are betting on the fact that consumption in 2000 was higher than in the previous year and the same may continue into 2001. Obviously, in the immediate future, there is no upside for the cashew market, but in the second half of the year, prices may start moving up gently.

Kernel exports from India during January-November 2000 were an estimated 3.75 million cartons, almost unchanged from 3.8 million cartons shipped out during the same period in 1999. Total imports into the US, the biggest single market for cashew kernels, during the period was 3.32 million cartons, up from 2.83 million cartons in 1999.

US imports from India in the first 11 months of 2000 were 1.74 million cartons, down 9 per cent from 1.91 million cartons during the same period in 1999.