Key Insights:
- Cashew prices rise amid tighter supply and steady demand for WW320 and WW240 kernels.
- Slowing EU, US, and Asian buying activity attributed to recent price increases.
- Tight carry-over inventories, sourcing challenges, and changing trade flows influence the global cashew market outlook.
WW320 and WW240 Cashew Kernel Price Trends
During the week of November 28, cashew prices rose for WW320 grade cashews (BRC certified, FOB Vietnam) with indications ranging between $3.40/lb and $3.60/lb. For WW240 cashew kernels, prices were heard at $3.70/lb to $3.90/lb, though some shippers reportedly offered slightly lower rates by 2-3 cents/lb. Despite these elevated prices, several market players noted slow demand for WW240, highlighting that buyers may be exercising caution amid rising prices.
Reduced EU and US Buying Activity as Cashew Prices Rise
Market participants reported a slowdown in buying activity from the EU, the US, and some Asian markets like the Middle East and China. These regions are closely watching cashew prices rise, which has led to buyer hesitation in building inventories. Middle Eastern buyers, for instance, may have temporarily stepped back, yet are expected to return to the market to cover Ramadan demand. According to Vietnamese traders, recent price escalations have tempered immediate purchasing but are unlikely to halt essential buying in the long run.
Tight Carry-Over Inventory in Vietnam Fuels Price Pressures
A key factor in the current environment where cashew prices rise is the tight carry-over inventory in Vietnam. Stocks remain limited as the season winds down, and the difficulties in sourcing high-priced raw cashew nuts (RCN) have forced some smaller Vietnamese processors to halt production. Larger shippers hold limited stock and are reserving premium grades for Asian buyers, including China, where demand for top-quality kernels remains strong. Industry sources noted that if processors need additional stock, they may consider buying raw material from Tanzania, where parity hovers around $3.60-$3.65 levels.
Global Raw Cashew Nut (RCN) Supply Constraints
Raw material prices have eased slightly since late October. By the last week of November, Expana reported Tanzanian RCN (51lbs) at around $1,815/MT CNF Vietnam, and Mozambique 51/52lbs at $1,700-$1,740/MT CNF Vietnam. Tanzanian cashew auctions moved quickly in November, with over 350,000 tonnes reportedly sold by the fourth week. Estimates for the Tanzanian crop could reach as high as 400,000 tonnes, but these volumes have not yet alleviated the upward pressure on cashew prices.
Changing Trade Flows and Import Dynamics
Vietnam’s RCN imports in October 2024 reached 158,200 tonnes (average price $1,480/MT), an 18% year-on-year decrease. Year-to-date (YTD) imports by the end of October stood at 2.3 million tonnes, down 12% y-o-y. While imports from Côte d’Ivoire fell by 32% y-o-y to 564,400 tonnes, Cambodia’s supply to Vietnam rose by 27% y-o-y to 780,000 tonnes. According to Vietnamese traders, cashew prices rise in the current $3.40-$3.50/lb range allows factories to balance out raw material costs from earlier West African purchases.
Seasonal Forecasts and Early Crop Indicators
As for upcoming crops in the Northern Hemisphere, flowering has begun in some areas. Early indications are positive, though it remains too early to fully gauge the 2025 prospects for West Africa or Southeast Asia. In Côte d’Ivoire, for example, trees appear healthy, while in Ghana, the harvest might be delayed. Although encouraging, these early signals have yet to influence short-term pricing, as the market remains constrained by current supply and demand fundamentals.
Strong Export Data and Persistent Global Demand
Despite the recent slowdown in some regions, Vietnam’s kernel exports climbed in October—close to 70,000 tonnes, up 8% y-o-y. YTD exports (Jan-Oct) surged 25.5% y-o-y to 650,450 tonnes, reflecting overall robust global demand. Exports to the US rose 14.5% y-o-y in October, while EU-bound shipments accelerated by another 13% y-o-y. Although China’s imports dipped for a third consecutive month in October, the year-to-date figure still shows substantial growth of 68%.
Cashew Prices Rise as Buyers Adapt to Market Realities
Market insiders confirm that cashew prices rise due to strong underlying demand, supply chain adjustments, and strategic buying. Even as prices escalate, consumers appear to maintain their appetite for cashews. Early pre-buying—partly due to potential logistical issues, port strikes, and geopolitical uncertainties—supported these price hikes. Now, as prices remain elevated, buyers and sellers are adapting. Some buyers secured ample supply at lower prices, while others cautiously wait for more favorable market conditions.
Outlook Amid Uncertainty and Volatility
With elevated cashew kernel prices, ongoing geopolitical volatility, fluctuating freight rates, and currency shifts (such as the strengthening US dollar), the global cashew market remains in flux. Many traders believe that, moving forward, buyers in Western markets have time on their side as inventories remain relatively comfortable. Still, the fundamental backdrop of tight carry-over stocks, rising input costs, and shifting demand patterns suggests cashew prices rise may persist into the near future. As the market navigates these complexities, stakeholders will closely monitor both seasonal crop developments and changing trade flows for clues on where prices head next.
