Cashew kernel prices decline 12%

Cashew kernel prices in the international markets have declined by about 12 per cent over the last six weeks owing to excess production. This resulted in drop in buying interest in all major markets.

The prices of W320 variety (internationally traded variety of cashew kernel) have fallen from $2.35 per lb (pound) in early September to $2.03 per lb at present.

Walter D'Souza, chairman, Cashew Export Promotion Council of India (CEPCI), said the major reason for the decline in global prices of cashew kernel was excess production of rawnuts in countries such as Brazil, Tanzania, Indonesia, Kenya and Mozambique. The crop in Brazil is about 10 per cent higher this year. It is expected to produce 2,10,000 metric tonne to 220,000 metric tonne this year.

The commodity sales have been widespread at major producing centres such as India, Brazil and Vietnam. This is again attributed to rampant selling by weaker operators who were not able to hold the stocks in anticipation of buying, says G Giridhar Prabhu, former president, Karnataka Cashew Manufacturers Association (KCMA) and also among the top exporters of cashew kernel from India.

"We are witnessing this trend after nearly 15 months. Though the situation is not alarming, it signifies end of buoyancy," he said.

As regards to Tanzania, the crop is early this year and the country has advanced the exports this year by about two weeks.

"As per the indications that we have received the government of Tanzania feels that its farmers are exploited by major buyers like India (India lifts almost 90 per cent of the raw nuts produced in Tanzania) and has withdrawn the price ceiling and lowered the prices of the commodity," said D'Souza.

Indonesia has also harvested bumper crop this year and is expected to push its produce immediately after Ramzan holidays, which will further bring down the prices, D'Souza said. He, however, feels that the market will absorb the entire produce as there is huge demand for raw nuts in India.

Prabhu said the situation is not just pertaining to cashew kernel alone as there is a fall in the prices of other tree nuts such as almond and hazelnut also. Almond prices have fallen by around 10 per cent. The prices of both these commodities, which were on the upward curve since 18 months have witnessed downward curve over the last few days.

The prices of almond have fallen from their peak of Rs 510 per kg in September to Rs 440-460 per kg at major markets such as Delhi and Mumbai. It had witnessed a lowest level of Rs 230 per kg about one and a half years ago, he said. India is the fourth largest export market for California almonds.

However, the impact of the fall in the prices of cashew kernel in the international markets is yet to be seen in the domestic market. The prices of the commodity are likely to come down by about 10 per cent to 12 per cent in the domestic market from the present Rs 255 per kg to Rs 230-235 per kg after 8-10 days, Prabhu added.

Meanwhile, there is a good news for the Indian importers of raw cashewnuts. The prices of raw nuts in the international markets have also declined by about $150 per tonne.

The prices of raw nuts were ruling at $1020 per tonne during September this year. This was mainly due to increased exports by Vietnam. The traders in India are also expecting the prices to come down for the material exported out of Tanzania and Mozambique.