The Mintec Benchmark Prices for cashew kernels W320 FOB Vietnam were last assessed at $2.63/lb on the 24th of November, an increase of USc 5/lb (+2%) from the previous month. The market has been on an upward curve over the past couple of weeks, rebounding slightly from low levels not seen since Mintec started tracking prices in 2011.
“The bottom-end offers from smaller processors are no longer there, and larger packers who made sales earlier in the year are not in a hurry to sell,” an Asian trader disclosed to Mintec. “Lower prices have disappeared from the market and larger packers have left their prices unchanged,” a European trader said. “We have seen some demand from the US and China. There has not been a lot of activity on buying forward, it is mostly smaller quantities for nearby shipments, but the market is starting to move,” another Europe-based trader added.
Between mid-October and the first week of November, the market bottomed at $2.58/lb on the back of muted buying activity due to abundant stocks in destination markets. For lower quality material, Mintec heard indications below this level, as low as $2.50/lb. Nonetheless, a slight improvement in global demand, and a decrease in supply from smaller processors in Vietnam, has led to the benchmark moving higher.
“There are expectations that the market will move higher,” a market participant said. This was echoed by another trader, who stated, “There is now clear upward tendency in the market”.
As the buying activity from the key consumer markets slowed in the past several months, there were growing expectations that the market would eventually rebound as buyers were running down their stocks. Between July and September, US cashew imports contracted by 41% year-on-year (y-o-y) to 31,000 tonnes. EU cashew imports were down 11% y-o-y during the same period, at 32,000 tonnes.
Nonetheless, despite the latest uptick in prices, some market players remain cautious over future market developments. “Prices seem to be going up, but the demand is lacking,” a Dutch traded said. “The whole nut market is quite depressed as people are cutting down on non-essentials amid the increase in the cost of living. There is plenty of stock still around Europe,” a UK-based trader noted.