Robust demand for cashew kernels across the globe is likely to help firm up the market, traders said. With buyers having minimum inventory, any surge in consumption is likely to lead to rally in the market. A drought in California, which produces more than 80% of the world’s almond production, is likely to lead to an increase in the demand for other nuts.
India is the world's largest consumer of cashew nuts with trade estimates of consumption ranging from 170,000 - 190,000 tonne. It is also one of the largest processor and exporter of kernels.
“Despite the substantial increase in the prices of many other nuts in the last 6 to 12 months, cashew prices have been moving within a narrow range for more than 2 years. Premium for higher grades and discount for lower grades has narrowed in the last six months. Indications are that cashew usage in the main importing countries has been increasing, probably as a result of the stable prices,” Pankaj Sampat of Mumbai-based Samsons Trading said.
“From middle of April, there has been reasonable activity in all markets, mainly for May-August shipments but some business was done for fourth quarter also. Consumption in the Indian market was steady,” he added.
Pankaj adds that continuing the trend established in the last two years, many kernel buyers have been buying for smaller spreads to take advantage of lower prices from a larger number of smaller processors who need to sell on spot basis. “But, some buyers have been paying slightly higher prices to secure supplies for longer period from larger and better organized processors,” he said.
Cashew nut exports during the last fiscal touched 1,13,260 tonne, valued at Rs 4,975.96 crore, as per the data given by data provided by the Cashew Export Promotion Council of India. The increase is 13% in terms of volume while the value has gone up by 23%.
Pratap Nair of Vijayalakshmi Cashews, who is also the ambassador of the International Nut & Dried Fruit Council (INC), feels that the consumption of cashew nuts is likely to increase with the health benefits clearly established.
“The study published in the New England Journal of Medicine found that those who regularly consumed a one-ounce daily serving of tree nuts had a 20 % lower risk of dying from any cause during the three-decade long study compared to those who did not eat nuts.