The Mintec Benchmark Prices for BRC W320 cashews FOB Vietnam were assessed at USD 2.65/lb on 8th September, down 3.6% month-on-month (m-o-m) and the lowest in over a decade.
The trading activity in Vietnam continues to be subdued with one European trader saying there was “little to no interest” in Vietnamese cashews out of Europe. The trader elaborated on this stating, “companies bought heavily earlier in the year thinking the market was going up and decided to take early shipments. However, prices have not moved up and these stocks are still sitting in European warehouses.”
Stocks in the EU and US have seen a buildup over the past several months, with limited demand failing to move high levels of imports. The EU imported 56,800 tonnes of Vietnamese cashews in the first six months of 2022, up 4% y-o-y and an increase of 19% compared to the five-year average, according to Eurostat data. EU imports were also strong in 2021, at a total of 120,500 tonnes between January and December 2021, a significant increase from previous years.
Similarly, US buyers have been importing large volumes so far in 2022. US imports of Vietnamese cashews totalled 72,040 tonnes between January and June, an increase of 6% y-o-y and up 9% on the five-year average, according to the USDA FAS.
According to Mintec industry sources, retail sales have been slow with one international trader saying, “movement through retail channels, in both Europe and the US, has not been as strong as I expected this season."
The recent rise in living costs has been hitting consumer budgets and led to a decrease in demand for non-staple foods as consumers look to reduce spending. This is impacting not only cashews but the entire nuts and dried fruit category with one UK trader stating, “demand from UK supermarkets for nuts and dried fruit has fallen compared to last year and is down even over the past few months”.
Despite this, the historically low prices for cashew kernels have led some companies to look to lock in cover for 2023, with the potential savings outweighing any fears over slow sales. As a result, one Asia-based trader stated that they had seen an increase in firm enquiries for forward shipments, particularly from Europe.