Cashew Market Update (20240530)

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The Vietnamese cashew market is currently facing significant challenges due to the export ban from West Africa. The resulting price volatility and material scarcity are causing substantial issues for processors, traders, and buyers.

Export Ban Effects:

The export ban from West African countries has led to severe disruptions in both the Vietnamese and Indian cashew markets. African traders are forced to cancel, renegotiate, or delay shipments due to volatile prices, exacerbating material scarcity in Vietnam. This shortage affects processors' ability to fulfill kernel shipments on time. Many are forced to cancel contracts due to both price volatility and material scarcity, leading to potential defaults. There is no official word on the unban or the shipment of stocked RCN from Côte d'Ivoire (IVC) as of yet, increasing speculative trading of RCN from other regions.

Defaults and Unstable Contracts:

There have been notable defaults by sellers from Vietnam and some Indian packers. Local traders often do not honor contracts the next day, even if confirmed the previous day, further destabilizing the market. This chain of defaults triggers a cascading effect: defaults by RCN sellers to Vietnamese buyers lead to Vietnamese sellers defaulting on kernel contracts to overseas buyers, which ultimately results in end importers facing legal and reputational issues in their markets. This domino effect disrupts the entire supply chain and damages long-term business relationships, causing significant instability and uncertainty in the market. As sellers default during price rises, it's plausible that buyers may default during price declines, creating a cycle of instability.

Current Prices and Market Dynamics:

The not-yet-officially-unbanned Côte d'Ivoire (RCN) exports are leading to daily increases in kernel and RCN prices. The current average prices are:

WW320 (Vietnam): $135- $145/20kg
( 6,75$ - 7,25$/kg)
WW320 (India): Around $150 Plus /20kg
( 7,5$+/kg)

46 lbs or lesser outturn IVC: Offered at $1,300 - $1,400+
Bissau: Offered at $1,550 - $1,650+

The price gap between Vietnamese and Indian kernels has narrowed significantly, indicating a market bubble in Vietnam driven by high demand! 
AFRGO Marketing @2024
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