August 2007
Like the seas, this market is forever on the move  as the many  factors that drive the price upwards and downwards continuously change.

March 2005
Forward prices have been weak until recently as shippers at origin look to make sales to raise finance for their annual seed purchases

Feb, 2005
This is a market to be brave in. On a forward basis, prices in £ have dropped considerably during the first days of 2005.

November 2004
It is clear that the reason for the current runaway bull market in Brazil kernels is due to greatly increased demand, perhaps 25% on the year.

May 2004
All time highs are being made at the moment as the problems of the past few months start to bite.

March, 2004
Today We see a confused situation with high prices remaining

October, 2003
Prices are steady at the very low levels they have been at for some months...

September 2008

It has been a long cool summer for nut sales.

Cashews prices have felt the chill winds of demand destruction due to over-pricing and more recently an icy blast from the falling purchasing power of the Euro.

We do not think, however that stocks have built up to unmanageable proportions over the past weeks and with prices  in dollar terms a little more sensible than in June, we think that the nearby Christmas seasonal demand could be lively. There is still much business to do.

Buyers have been able to go on their holidays and relax. Staying away from the market has worked and prices are softer.

Demand seems to be off too, although patchy and hard to quantify: Organic and Fairtrade goods seem to be the worst hit as consumers tighten their belts and consider that 'charity starts at home'  ;  30 to 40 percent off in places.

On the other hand, Chocolate manufacturers are seeing an increase in demand.

For some companies, the aggression of the retail downturn has taken them by surprise.

They have been happy to let their stocks run down over the summer and are confident that they will be able to buy their requirements from an over-stocked spot market this autumn.

We can tell that this is true because many importers are stating that forward orders for the next 6 months are down by 70 to 90 percent.

Compare this to the actual sales slowdown of 0 to 30 percent and we can see the possibility of an eventual shortage occurring.

Unless something spectacular happens to change the course of events, we believe that the above mentioned ' disconnect' will become painfully apparent some time during the last 3 months of 2008.

Why? because importers are changing the way they behave.

Many have suffered capital destruction on an unprecedented scale as they have been forced to deliver cheap cashew contracts against very expensive purchases.

 With an unclear future, not only in specific nut markets but also in the national and international economies, they too have been loathe to make forward commitments without a firm order from their customers.

The above mentioned capital destruction means that they can no longer afford to keep such high levels of stock.

With a weak dollar and strong Euro, importers were doing ok picking off cheap cashew sellers, waiting for the goods to be shipped and then selling them to industry.

But with the resurgent dollar and weak summer demand, and especially the lack of spare funds, all that has changed.  

Funding difficulties have forced importers into a situation where the shipping documents for arriving goods are still unpaid at the bank. These are goods which should really be available ex store at this time of year but they are on the quay.

This represents a bottleneck where cash is king. And some buyers may be able to take advantage of this situation in the short term.

Today, cashew exporters are weakening their price expectations.

But please remember that forward orders are at their lowest levels ever. After the  financial bottleneck is cleared there will not be enough goods to satisfy seasonal demand with a shortfall of up to 50 percent.... If we are right that is..........

We hope you have enjoyed this report.

Contact us for any requirements you may have and we will endeavour to give you a firm price.

 Regards

 Tony Ayre