During 2020, cashew crops in most origins were expected to be slightly better because of reasonable weather. Vietnam and Cambodia have harvested good crops. But, Covid-19 had adverse impact on collection in many countries in West Africa. In India also, collection is likely to be significantly less due to movement restrictions. Also, shipments of RCN (Raw Cashew Nuts) from West Africa to India and Vietnam for processing will be slower and lesser than normal. Delays in collection and shipment will mean that kernel yields will be lower than normal further reducing the overall kernel supplies.
According to Pankaj Sampat of Samsons Traders, the slower movement of RCN from Africa to Asia for processing may mean that during some period of high demand, supplies of kernels in may be tight. That could lead to spurt in prices.
Consumption in India (which is the biggest consumer of cashews) will certainly be lower due to the extended lockdown – hopefully, the significantly lower prices will push up consumption in the peak consumption period starting August. Consumption in USA and the EU may go up a bit due to increased snacking. Overall demand may be more or less the same as last year.
As an immediate reaction to Covid-19, cashew prices crashed during Feb-Mar 2020 – first RCN and then kernels. Market moved up a bit in Apr 2020 due to spurt in retail demand in USA and the EU coupled with lower prices from origin. Due to the reduction in RCN prices and slowing down of demand, prices have eased a bit in May 2020.
Current prices are the lowest in last 10-12 years – this should mean more demand in all markets in coming months as things become normal.
Our feeling is that although there will not be a big jump, prices will move up gradually in second half of 2020.
This story originally appeared in fnb news.