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Vietnamese cashew prices rise for the first time since September last year

March 4, 2022

1 mins read

The Mintec Benchmark Prices of Vietnamese cashews (W320, FOB Vietnam) rose by USc 3/lb (+1%) during the week of 3rd March, to USD 2.83/lb, on an upsurge in buying activity. The benchmark rebounded from a twelve-month low of USD 2.80/lb, after prices had previously sustained a downward trend since mid-September 2021 (USD 3.30/lb on 16th September).

For this year’s cashew harvest in Vietnam, the year-to-date crop has been supported by favourable weather conditions. There were concerns over heavy rains in February impacting the yield, however, the extent of the potential damage is most likely minimal, according to key industry stakeholders.

For the major cashew areas in the south of Vietnam, precipitation in February provides on average 1-6mm of rain, with February being the driest month throughout the year. However, this year, rainfall was above average. In the 3rd week of February, an average of over 30mm rain fell in the key growing regions, which is over 10 times above the 30-year average in some areas.

Most of this precipitation fell in just two days, with one of those days accounting for 20mm of rain alone. The total precipitation for February was on average 50mm in the key cashew growing areas of the South Vietnam, which is high for February, but only mild saturation and flooding would be expected at this level.

The fact that prices have failed to increase rapidly since the reported rain damage also supports the narrative of negligible impact on production. Some market participants have said they expect the rains to delay the harvest.

At the end of February, industry officials in Vietnam stated that the country was on course to produce 370,000 tonnes of cashews in 2022. Trade sources peg the new crop at approximately 400,000 tonnes, steady compared to the previous campaign.

Raw material stocks in Vietnam are plentiful. Stocks in the EU and US are also at comfortable levels. Nonetheless, the EU market is presently tight on splits and pieces, according to trade sources, with a UK buyer noting that larger sizes are also an issue.

Jara Zicha
Jara Zicha

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