Higher stocks, arrival of East African crop cited as the reasons
Raw cashew prices will ease in 2012 feel cashew kernel exporters as traders have substantial holdings and also due to the arrival of East African crop.
Traders in Africa are holding between 40,000 tonnes and 50,000 tonnes of raw cashew and supplies from Tanzania are expected to counter any crunch situation in the New Year, said R. Hari Krishnan Nair, Chairman, Cashew Export Promotion Council of India. He said that raw cashew prices were forced up by a squeeze in supplies owing to the civil war in Ivory Coast, which ended in May. As a result of the civil war, supplies from the West African country were delayed and were still available in the market.
However, it does not appear to be a lag on Indian cashew kernel exports in the New Year.
Ivory Coast continued to be the biggest supplier of raw cashew for Indian processors, followed by Benin and Tanzania. The trio of African countries accounted for more than three lakh tonnes of raw cashew exports to India worth Rs.1,633 crore. Import of raw cashew totalled more than five lakh tonnes worth Rs.2,479 crore during 2010-11. Figures from Cashew Export Promotion Council reveal that cashew kernel export from India went up by nearly 60 per cent in quantity between April and August this year to 65,501 tonnes from 41,395 tonnes during the same period in 2010. The increase in quantity was reflected in value too as total export earnings stood at Rs.1,737 crore, an increase of more than 56 per cent compared to the April-August period in 2010. Dollar earnings went up from $239 million to $384 million, an increase of 61 per cent.
Exporters also felt that cashew did not face serious threat from other nuts because cashew, despite a rise in dollar value, offered value for money as other nuts such as pistachios, were costlier.
The calendar year saw cashew kernel price rise to $4.50 a pound for a short period before Diwali. It has since eased and is expected to be firm around $3.50 a pound.
In the past, cashew has proved to be counter-recessionary and exporters do not feel that the king of nuts face a serious slackening of demand because of slowdown in Europe and the U.S.