African cashew processing activity and lower stocks expected to lift prices- 03 June 2021

– Sharp rise in prices for small kernels.
– African origins are gradually increasing processed exports to EU and US.
– Stocks expected to fall sharply in Q3.

Indian and Vietnamese stocks of raw cashew nuts (RCN) are tight, meaning higher prices than in 2020, according to trading sources.

Cashew is still being harvested in the northern hemisphere and most crops are no higher than in 2021 due to Covid-19 restrictions. Cambodia is the only origin with a bumper crop, initially estimated at 250,000 tonnes, 32% more year-on-year, thanks to acreage expansion developed by the Vietnamese industry.

The general manager of the Indian company Samsons Traders, Pankaj Sampat, quoted that Vietnamese W320 processed cashews ranged from USD3.15-30 per pound fob in May, up from USD2.7-2.9/lb from February-March. Broken grades peaked at 2.20-2.30, 13% more; and LP rose by 60% to USD1.65-1.75/lb.

The Vietnamese trader Golden Bridge confirmed those price levels in its latest market update.

West Africa’s RCN prices ranged from USD1,250-1,500/tonne c&f in May, up from USD1,050-1,150/tonne in February.

Sampat explained that the industry may be experiencing a turning point due to the following factors:

– Lower crops and rising consumption are cutting stocks in India and Vietnam, the main processors.
– African markets are starting to export processed cashews to the EU and the US, after obtaining certification as reliable origins.
– Port congestion is being fixed gradually although export recovery is pushing up sea transport prices.

A new Covid-19 outbreak may impact key importers, as India just now. However, if the current scenario is stable, prices will be stable and will start to grow when the Indian market recovers high consumption levels.

Meanwhile, Golden Bridge predicts a slight fall in Vietnamese prices when African and Cambodian RCN shipments are in full swing although current high prices are blurring this scenario.