Cashew Price Will Rise in Short Term

CASHEW PRICE WILL RISE IN SHORT TERM

There is a supply demand mismatch of cashew in India. As a result, price of cashew is surging ahead. W320 variety demanded a price of $4.25 and W240 a price of $4.65. Indian prices are 10% higher than that in international markets. Most of the cashew sold in Indian markets is of low quality. April shipments are arriving only now in India and Vietnam. Cashew cannot be stored beyond a few weeks. Then it starts deteriorating. Cashew price has been rising for the last one year because of higher price for raw cashew and also due to increase in processing charges.

One does not know when the price will start dropping – or whether it will drop at all. In Africa, major supplier of cashew, there is no increase in production. After September, demand for cashew will peak in India and West Asia due to arrival of Hindu and Muslim festivals. At this time, the price will further increase. But traders will start buying cashew from June onwards to accumulate the stock. The price can either go up steadily in the coming months or at the best remain steady at the current levels. There is no chance of the price coming down unless either supply demand situation changes or consumers’ taste changes.

There is no chance of a change in demand supply situation because the production is unlikely to increase in the major cashew growing areas including West Africa. Consumers’ taste is also unlikely to change because cashew gives a better flavour and taste to food items right from sweets to rice dishes. During festival times, food without cashew is unthinkable – whether it is vegetarian or non-vegetarian food. Moreover there is no ready substitute for cashew unlike coffee which has a substitute tea. Food habits cannot be changed at the drop of a hat as American food companies have bitterly learnt in India. These companies tried to break the food habit of Indians by inducing them to take corn flakes and other American food as breakfast. They failed and not only burnt their fingers but their hands also.

The two biggest importers of cashew are USA and Europe. Important producers are the West African countries Ivory Coast, Ghana, Benin, Senegal, Gambia and Guinea Bissau. Vietnam is also an important producer of cashew. Brazil, Nigeria and India also produce cashew. In USA and Europe, it may be possible to switch over to other nuts and snacks instead of cashew because the food habit is different from Asia. But in Asian countries, it is not possible. So cashew price is decided mostly by the tongues of Asians and not Americans or Europeans. Whenever I go to a good restaurant with my family, I invariably order ‘cashew pulav’ which is a rice dish with liberal sprinkling of cashew with a side dish ‘onion raita’. It will take me to heavens and the taste will linger in my mouth for the next two days. Now imagine, if I am asked to eat any other alternative item when I visit the restaurant, will it be possible? I shudder to even think of it.