NH-crop season has fairly ended, and the majority of the in-shell is on its way to processors in Asia. The big “question mark” remaining is whether all of the in-shell has already been traded. On the other side, we noticed that Vietnam’s Kernel exports for the May/July time period has set a new record. Which indicates that the total exports for 2023 may be an all-time high, similar to the 2021 levels.
With sufficient in-shell currently arriving, we are not seeing many issues on the supply side. However, on the demand side, factors like “financing” and “manpower costs” still remain a factor, which is likely to play a larger role for next season.
Quality wise, this is not the best crop in comparison to recent years. With some delay in harvest and low demand at the start of the season, this has resulted in longer warehousing in origins. Which has resulted in a lower out-turn than usual.
Demand remains flat versus this time period last year. With all the global hassle on rising costs, this can be noted as a positive factor. Obviously, cashews remain a preferred consumer snacking choice. Retailers across main destination markets have adjusted their shelf prices, which has supported consumption very well.
With de-stocking in destination spot markets remaining extremely firm at peak prices and the challenges at the Panama Canal, we will likely see this issue continue. With traditional high-spot demand in Q4, this remains an indicator to watch closely going forward.
With the current favorable pricing, main destination markets are showing interest to cover as much going into 2024, whereas origin processors will rather operate from the nearby side. The interest costs simply gives no room for origin processors to market at spot levels going further as WW320 pricing continues to be in the range of $2.40/lb FOB to $2.60+/lb FOB for nearby periods. Another selling indicator will be the SH crops, which we expect to start trading by the end September/early October.
- Destination stocks remain tight and moving fast on main grades.
- Driven by promotions, consumption has improved and is likely to finish better than last year.
- Prospects for the Southern Hemisphere’s crop is still unclear and overall, shell realization continues to be weak versus last year.
- In-shell availability for Asian processors is currently not a concern.
- The current peak consumption season in India is disappointing and not signaling to pick up soon.
- Will rising costs impact consumer behavior and shift into alternative (cheaper) snack items?