The Mintec Benchmark Prices of Vietnamese cashews (W320 FOB Vietnam), fell 3% during the week of 1st June, to USD 2.90/lb, after previously climbing from USD 2.75/lb in the first week of April to USD 3.0/lb in the second week of May. A similar drop in prices was observed in W240s and W450s, with the respective benchmarks retreating to USD 3.10/lb and USD 2.80/lb (FOB Vietnam) during the week of 1st June.
The price decline is primarily attributed to slow demand in destination markets and Vietnamese sellers dropping offers for prompt sales, in order to generate finances for business operations. A fall in raw material costs (RCNs) has also added to the downward price sentiment, according to some market participants.
In general, demand for kernels from western markets has been subdued recently, with one trader commenting on the market as being in a ‘coma’.
‘There is presently enough cashews in the EU market. Imports have been strong due to competitive cashew prices and buyers are well covered’, an EU buyer has said. ‘A lot of the buying has been done. People bought when prices were low earlier this year. Buyers are now in a ‘wait-and-see’ mode’, another trader added. The same trader also said that prices ‘shot up too quickly’ during April and May and the market is now correcting down.
Cashew exports from Vietnam totalled 609,260 tonnes in 2021, an increase of 17% year-on-year (y-o-y), according to the Vietnam Cashew Association (Vinacas).
The EU imported 28,402 tonnes of Vietnamese cashews in the first three months of 2022, up 2% y-o-y and an increase of 21% compared to the five-year average, according to Eurostat data. Similar to the EU market, US imports of Vietnamese cashews also posted growth in the first three months of 2022. The US imported almost 34,000 tonnes of Vietnamese cashews during the period, up 5% y-o-y and 20% more than the five-year average. Imports from the three key origins, Vietnam, Brazil and Côte d’Ivoire, totalled 36,622 tonnes between January and March, up 7% y-o-y.
On the supply side, prices have been pressured by a production shortfall in Southeast Asia. The International Nut and Dried Fruit Council (INC) estimates that Vietnamese farmers will produce approximately 300,000 tonnes of cashews in the ongoing 2022/23 campaign, 25% less than the previous season, and a downward revision of 100,000 tonnes from the INC’s March 2022 estimate. This is due to adverse weather conditions during the harvest. The 2022/23 production in Cambodia is estimated to reach 500,000 tonnes, down 17% y-o-y according to the INC.
