The Ivory Coast crop flows is starting to slow down, which looks very early and irregular for this period of the season. We can’t straight conclude this signal to be a shortfall in the IVC crop. Still, this event needs to be closely monitored for the next couple of weeks.
The Cambodia crop pricing is at significant disparity to the spot Kernel market, and it’s still not cooling off. With local Vietnam crops not delivering sufficient larger Kernels, we do expect Kernel processors to start stepping into procurement of Cambodia very soon. India continues to cover their WAF needs for processing. Local crops are still expected to be in line with last year, but not enough for the booming Kernel consumption in their domestic market.
The focus of the industry remains covering spot and nearby shipments against their shorts to avoid pipeline disruptions. This strategy has resulted that Kernel prices start bouncing back up and in the last week, Kernal prices are up about 3%.
With RCN prices high and shell realization at less than half what it was last year, we have noticed more and more processors have started closing their factories due to disparity.
These closures will eventually result in lack of Kernels in the spot market, and with the recent hand-to-mouth coverage strategy, we may see further inching-up of prices in April.
- Industry continues to buy hand-to-mouth against shorts.
- Kernel availability hasn’t improved, in fact expect to tighten further.
- Significant lower shell realization is forcing processors to up their Kernel pricing.
- WAF Crops may still reach comparable volumes to last year.
- China demand remains sluggish.
- Will consumers continue to react on consuming luxury snack items?