CASHEW WEEK. In the Cashew Week... A WEEKLY NEWSLETTER. A Product of. NewsHighlights. Cashew Market Commentaries from Experts

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1 A Product of In the Cashew Week... Cashew Market Commentaries from Experts Indian Cashew Market Commentaries International Cashew Market Commentaries Almond Report NewsHighlights US Import Data for the month of Sep 2016 Upcoming Trade Events Prices of Nuts Domestic Prices of Nuts International Prices of Nuts

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6 Volume 17 Issue 45 Nov 2-Nov 5, 2016 Cashew Market Commentaries from Experts Cashew market India Cashew Market has remained stable throughout the week. Though traders had expected reduced demand post Diwali festival, surprisingly the demand has been firm for cashews. GST (Goods and Service Tax), the path breaking One Nation, One Tax, which is likely to be effective from April-2017, might add further complication to this largely SME dominated processing industry. A four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess, was decided by the all- powerful GST Council in the first week of November. Cashew kernels may come under the tax rate of 5 or 12%, which will be known in the coming weeks Demand of Almonds post Diwali has been very low as most of the consumers have there hands full of dry fruits and sweets. The Diwali sales have surpassed all expectations and accordingly the replenishment sales will take some time. Marriage season and cold weather across Northern hemisphere will ensure Good Almond sales in the coming months, other reason for good Almond sales would be high prices of competing nuts like Cashews, Pistachios etc. Vietnam Vietnam cashew market continued to remain stable throughout the week. There wasn t any large volume trades as buyers were reluctant to buy at such high prices. Limited trades were being done for W240 at USD 5.15/5.20, W320 at USD 4.65/4.70, which were sold by medium reliable packers. Meanwhile we could see movements between selected packers who were trading according to the norms of the already signed contracts. Prices are expected to move up due to good demands from Western countries due to commencement of Christmas sales. USA US imports of cashew kernel for the month of September 2016 totalled tonnes valued at USD million as against tonnes imported during the same period in 2015 which indicates an increase of 1% in quantity and 11% increase in Value. Markets remain strong in price but we see little in the way of fresh demand for kernels perhaps with some spot/prompt interest in WW240 and premium grades due to demand for Christmas sales. Total imports of cashew kernel in US for the year 2016 (until Sep) totalled at 105,220 tonnes valued at USD million. Tanzania Southern hemisphere is showing a promising crop in terms of both Quantity as well as Quantity. A total of 83,957 MT of standard grade RCN has been sold in the Southern part of Tanzania, out of which 6

7 Volume 17 Issue 45 Nov 2-Nov 5, ,940MT has been shipped to Vietnam and 3,568MT to India. The Coast region has done its first auction last week whereby 1,450 MT of standard grade and 1,760MT of under-grade were sold. Currency Indian rupee is likely to trade range bound in this week. Khariff output this year is expected to be 10 percent to 11 percent higher than last year, and manufacturing sector doing well, NCAER expects economy to grow at 7.6 percent in the current fiscal. Brazilian Real can be expected to depreciate more in coming days. It is currently staying above 50 day EMA which is a sign of weakness against dollar. If Real persists for one more week and if Real closes above 50 day EMA next week also, then it will signal continuation of weakness. Flash News from National Conference on Cashews in Goa organised by Directorate of Cashewnut and Cocoa Development (DCCD), India Seven states have been identified to grow cashews and increase production by 1.3 million tonnes over the next 10 years Dr. S K Malhotra, Horticulture Commissioner, National Horticulture Board, Government of India Source: Cashewinfo.com RCN Market Commentaries After Diwali, the market is silent. Now the concentration is on Christmas orders from abroad for cashew nuts. Cashew shell price is around INR 5.40/Kg and cake is quoted around INR 3.90/kg. Demand for cake is depressing. Meanwhile even cardanol is not in good demand; therefore, the CNSL purchase by the distillation people seems weak. This has pressed CNSL prices further down to about INR 16/- per kg or even less. Unless phenol raises and demand for cardanol picks up, CNSL will remain around this level. Sad thing is CNSL supplies are remaining unpaid and CNSL factories are suffering. Source: Omprakash Phadnis International Commentaries Cashews made news in the mainstream press this week. Bloomberg started it and the story was spread in journals across the World ranging from The Times of London to the New Zealand Herald. It s just a pity that they report events that were known in the trade some nine months ago and prices that changed between seven and four months ago. Most of the articles got the figures wrong one reported that demand had grown by 53% every year since 2010 and another that the Vietnamese crop was down 53% - (maybe 53 is someone s lucky number). These errors point out the lack of good information sources in the cashew world with Cashew Week being one of the few sources on a very 7

8 Volume 17 Issue 45 Nov 2-Nov 5, 2016 short list. It is our fault that newspapers print nonsense as we do not offer a coherent voice as a sector. Probably what is happening in reality is that supermarkets and consumers can expect price rises in 2017, and not only for cashews with the FAO Food Price Index at 18 month highs. The trade is already well aware of the price moves of recent months. For cashews, higher prices may cause initial orders to be cut but the experience of recent years indicates that the demand at consumer level is unlikely to be negatively impacted for any significant period of time. Expectations of a better crop from February may cause buyers to keep levels of cover at low levels which combined with an already empty supply pipeline could create a very volatile situation from March onwards in the event of any crop problem in India, Vietnam or West Africa. The media articles do indicate that in the longer term, as written by different people in Cashew Week and elsewhere for some time, that the coming problem is not about selling cashews it is about buying RCN. Meantime markets remain strong in price but we see little in the way of fresh demand for kernels perhaps with some spot/prompt interest in WW240 and premium grades. November brings a couple of major cashew events in Vietnam and Cote D Ivoire. I will participate at SIETTA 2016 in Abidjan where 26 cashew equipment manufacturers will display machines and technology over three days in the largest expo of working cashew equipment ever seen. Manufacturers from 10 different countries will participate with India and Vietnam well represented. Fourteen manufacturers will bring working machines and actually process cashews at the exhibition. The demonstrations will be supported by a series of events, workshops and presentations all aimed at promoting the cashew sector and assisting new processors make the right decisions in purchasing processing equipment. This is an important event as, although Cote D Ivoire and West Africa will remain major suppliers of RCN to processors in India and Vietnam for many years to come, the growth in processing there can help sustain the growth in production needed to keep cashew supply and demand balanced at a price level which keeps our favourite nut at the top of the consumers shopping list. Source: Jim Fitzpatrick Vietnam Market continued to be stable this week despite the fact that big quantity is not traded. Limited trades were done for W240 at USD 5.15/5.20, W320 at USD 4.65/4.70 sold by medium reliable packers. A lot of offers were made at these levels but buyers were not ready to pick up. Sales only happened between selected sellers who have been performing their signed contracts. Buyers were not ready to pick up large quantity as there is no reason for them to chase high prices while their is no support from their end- buyers. Prompt trade was seen among those who required goods urgently. Sellers were not reducing their prices and are expecting that kernels prices will move up in the coming time due to good demands from both Western and China. Breakage demand is sluggish. There are a lot of RCN offers but prices are too high unabling packers to confirm the deal. 8

9 Volume 17 Issue 45 Nov 2-Nov 5, 2016 Prices from local market are firm and we do not see any signs of downtrend from this market. Traders are hoping that kernels will soon go up strongly due to good demand of export market. Source: Kheim, Vietnam While we wrote in our market report last time that prices came down a little but due to diminishing demand, the opposite happened during the last 7-10 days. Continuous demand was pushing the prices up and WW320 are coming close to Usd 5 per lbs. The short supply and empty pipelines of raw seeds are causing issues. Also the quality is down from previous seasons and processing yields are different. WW240 are very hard to find and over USD per lbs FOB already. The next noticeable quantities of raw seeds have to come from India, Vietnam and West Africa (main producer) and be available during April/May. At that time a lot of buying/shipment pressure will be in the market and it is well possible that prices will remain firm until Spring/summer. It is our recommendation to be covered at least until March/April and probably take a partly cover until June Source: Kees Blokland,Netherlands Up to 6th November 2016, a total of 83,957 MT of standard grade RCN has been sold in the Southern part of Tanzania, out of which, 4,940MT has been shipped to Vietnam and 3,568MT to India. Last week's prices in the southern regions of Tanzania (Mtwara and Lindi) were between Tsh.3,700 and 3,800. The Coast region has done its first auction last week whereby 1,450 MT of standard grade and 1,760MT of under-grade were sold. Prices ranged between Tsh.3,308 and 3,358 for standard grade nuts and between Tsh. 2,600 and 3,008 for under grade. Source: Ray Mtangi, Cashewnut Board of Tanzania Please visit for weather report. 9

10 Volume 17 Issue 45 Nov 2-Nov 5, 2016 Fig 1: Cashew Kernel- W320- Average FOB prices at Tuticorin port, India (USD/lb) Cashew kernel price for FOB W320 continued its strong upward bias and traded in the region of USD 4.75 and 4.85/lb, the highest since August-2011 historic highs of USD cents per lb. As the peak demand season is almost over, market participants unwilling to commit big contracts and they are buying only hand to mouth for their short term requirements. Fig 2: Raw Cashew Nut (RCN) - Average Price INR per 80 kg bag 10

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12 Volume 17 Issue 45 Nov 2-Nov 5, 2016 Almond report- California and New Delhi Markets in Delhi's Khari Baoli area of Chandani Chowk traded for the first week after Diwali at INR /40 Kg for 70% Sliding Scale, for Californian Almond NP In shell's which is equivalent to USD /Lb of origin prices. FAQ Kernels corrected a bit and closed at INR /kg from its High of INR with Hand Picked still trading above INR 615/kg upto INR 630/kg. Demand in the first week post Diwali has been very low as most of the consumers have there hands full of dry fruits and sweets, The Diwali sales have surpassed all expectations and accordingly the replenishment sales will take some time.marriage season and cold weather across Northern hemisphere will ensure decent to Good Almond sales in the coming months besides origin getting stronger on prices with lower supplies, other reason for good Almond sales would be high prices of competing nuts like Cashews, Pistachios, Pine nut etc... Origin prices remain firm to bullish for shipments till December. Price ranges from USD /lbs for NP In shell s. Very few packers have offers for the buyers as they are waiting for the bullish position report to be declared in the early next week coinciding with US Presidential Elections, though there is no direct co relation between the elections and position report but both are events which are heavy on packers mind as it will give directions to the markets for coming months. With over 50% sold, committed and shipped, Packers/Growers have no reasons to bring down the prices from prevailing levels. But one thing is for sure that the sales have been really good across global markets as the prices were affordable for all the participants in the entire value chain and I am not sure that at today's prevailing prices we would be seeing the same buying momentum as these are price elastic commodities, I am also sure that Californian packers are etching to increase prices and are looking for some event to shoulder there case on. GST ( Goods & Services Tax), The game changer for Indian economy is talk of the town as the empowered committee on GST has decided four tax slabs of 5%,12%,18 % and 28%+. It is still to be decided what items to be kept in such tax slabs and Our Dry Fruit business's growth on short term basis would depend largely on our TAX RATE. Many trade associations and institutions are queuing up to make there case for lower tax slabs with there respective state Governments but some how a collective approach to this is missing. Almond Board along with the trade association should make a representation on Health Nut basis. Currency was stable at INR against USD. But Stock markets have been choppy on account of US Elections. Markets will become fully operational from next week on wards as most of the Festivals will get over by this weekend. We will also be having the position report to decide on our S & D, For sure the Global shipments numbers should be high as most of the packers had full commitments for Oct through Dec FH months. Source: Ravindra Mehta, International fruits and Nuts Organisation, New Delhi 12

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15 Volume 17 Issue 45 Nov 2-Nov 5, 2016 Prices of Nuts in India and International Market Table 1: Kernel FOB prices in major ports as on 11/04/16 Grades Tuticorin(USD/lb fob)* Kollam(USD/lb fob) Vietnam(USD / lb fob) W W W SW SW SSW * LP/LWP Ws Table 2: Cashew Kernel: India spot prices in production centres as on 11/04/2016 in INR/kg Grades Manglore(Karnataka Kollam(Kerala) Vetapalam(A.P) Jeypore(Odisha) Ganjam(Odisha) Goa W W W W W W W S S S S LWP SWP K JH SSW BB JK/JB SW Prices of Nuts in Other Indian Markets TABLE 3: Cashew kernel: India spot prices at terminal markets as on 11/04/2016 in INR/kg Grades Delhi Sangrur(Punjab) Jalandhar(Punjab) Kolaphur(Maharastra) Mumbai W W W W W S LWP SWP

16 Volume 17 Issue 45 Nov 2-5, 2016 Currency Movement Forex rates in USD Currency 11/01/ /04/2016 Indian Rupee (INR) Euro (EUR) Japanese Yen (JPY) Brazilian Real (BRL) Chinese Yuan (CNY) Singapore Dollar (SGD) Tanzanian Shilling (TZS) Thai Baht (THB) Mozambique New Metical (MZN) Vietnam Dong (VND) Indonesian Rupiah (IDR) Benin CFA Franc BCEAO (XOF) Ghanaian New Cedi (GHS) Indian Rupee Indian rupee is likely to trade range bound in this week. Khariff output this year is expected to be 10 percent to 11 percent higher than last year, and manufacturing sector doing well, NCAER expects economy to grow at 7.6 percent in the current fiscal. Fuel inflation, however, is a worry. Indian rupee last week traded in the region of and and finally settled at on Friday (4thof Nov). Next resistance is seen in the region of and and only above to depreciate further. At the same time Rupee is getting consistent support at current level around Below this level, we are anticipating Rupee will appreciate further against US dollar. 16

17 Volume 17 Issue 45 Nov 2-5, 2016 Brazil Real Brazil real last week traded in the region of and and finally settled at on Friday (4th Nov). Resistance is expected to remain in the region of 3.27 and At the same support is seen at 3.10 and below to drift further towards levels going forward. We expect real to depreciate more in coming days. It is currently staying above 50 day EMA which is a sign of weakness against dollar. Another week close above 50 day EMA will ensure weakness to continue longer. Vietnam Dong Vietnam dong last week traded in the region of VND and VND and finally ended at on 4th t November. Vietnam dong is expected to trade in the broader region of and going forward. 17

18 Volume 17 Issue 45 Nov 2-5, 2016 Comparative Movement of Currencies in 2016 Vis-à-vis USD in cashew processing regions (Weeks starts from January 2016 and value indexed to 100) 18

19 Volume 17 Issue 45 Nov 2-5, 2016 Table 6: Cashew kernel: Africa spot prices as on 11/4/2016 in USD/lbs Grade description Grade Price White Wholes Cashews 180 W White Wholes Cashews 210 W White Wholes Cashews 240 W White Wholes Cashews 320 W White Wholes Cashews 450 W Scorched Wholes Cashews 210 SW Scorched Wholes Cashews 240 SW Scorched Wholes Cashews 320 SW Scorched Wholes Cashews 450 SW First butts/ White Butts FB/WB First splits/ White Splits FS/WS Large White Pieces LWP Small White Pieces SWP Chipps CH Baby Bits BB Scorched Butts SB Scorched Splits SS Scored Pieces SP Table 7: Other Tree nut Prices at the Delhi Market (INR/kg) Grades 10/21/ /4/2016 Almond Giridi in shell 140/ /140 Almond Gurbandhi in shell Almond California in shell /400 Almond Kernel California 575/ /585 Almond Kernel Gurbandi 755/ /825 Pistachio Irani 1100/ /1200 Pistachio Hairati 1210/ /1325 Pistachio Peshawari 1425/ /1530 Walnut New 380/ /440 Walnut Kernel 1175/ /1450 Fig Common 300/ /375 Fig Medium 500/ /550 Fig Best 625/ /750 Apricot 450/ /800 Kishmish (Rs per kg ) Indian Yellow 72/115 70/112.5 Indian Green 127/ /275 Kandhari New 305/ /450 Ranga 212.5/ /210 Dry Dates (Rs per quintal) Red 2700/ /12000 Rangkat 4000/ /14000 Raisin- Sangli

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22 Volume 17 Issue 45 Nov 2-5, 2016 Are you planning to invest in new processing factory or modernize existing cashew processing factory in India? Cashew cultivation is expanding into new areas in India. Cashew processing too is being taken up in non-traditional areas. Entrepreneurs face several questions when starting a new project, such as, which technology to choose, what should be the scale, should we choose manual vs. semi-automatic vs. fully automatic processing lines and where to set up the plant, what is the demand in my region and what is the forecast and what are the risks in investing and so on. The consulting arm of Cashewinfo.com would be happy to assist businesses in conducting Techno- Economic Feasibility studies for either establishing a new factory or modernizing an existing factory. Let us know your requirements, we would provide you with best advice. It is wise to talk to us before investing your money. Please write to swapna@fbspl.com or talk to Swapna at News Highlights Cashew project creates 60,000 jobs Over 60,000 new jobs will be created in Mongu, Western province with the launch of the new multimillion dollar Cashew Infrastructure Development project. The 50 Million US dollar project will create 30,000 rural women and 6,000 youths engaged in various activities to expand the agricultural project. Continue reading 22

23 Volume 17 Issue 45 Nov 2-5, 2016 With many schools saying no to peanuts, parents turn to almonds, cashew spreads With almost one third of schools now "peanut free," parents are always looking for options beyond peanut butter. The good news on that front is that there are more nut butters available than ever before, and most of them can be brought safely into peanut-free schools. Continue reading Doubled nut sales needed to sell record 2016 pistachio crop Generally, in an on-year like this one, it s difficult for the nuts to mature evenly throughout a tree. But, this year those differences were more extreme, especially in areas where we saw whole nut dry down and early splits. We think this occurred because the trees are still recovering from the impact of drought World s largest almond huller-sheller processes largest crop ever Continue reading For the 410 members of the Central California Almond Growers Association (CCAGA), the 2016 crop harvest was almost completed by the first week of October. The cooperative, the world s largest huller and sheller of almonds, serves growers from Tulare County Sutter County grower reaps larger, better walnut crop this year Continue reading California walnut grower Don Norene faces higher production costs in the future, following the recent passage of legislation establishing a higher minimum wage, new overtime pay requirements for California farm workers, and walnut grower prices at half the amount compared to 2014 Continue reading 23

24 Volume 17 Issue 45 Nov 2-5, 2016 Source wise Import of Cashew Kernels into US for the month of September

25 Volume 17 Issue 45 Nov 2-5, 2016 Cashew weekly printed Edition is promoted in the following events Event Name Date of Event City / Country SIETTA November 2016 Abidjan, Côte d'ivoire The 8 th Golden Cashew Rendezvous VINACAS Nov 2016 Da Nang, Vietnam 3 rd World Cashew Convention February 2017 Singapore Gulfood 26 th Feb -2 nd March 2017 World Trade Centre, Dubai 25

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27 Volume 17 Issue 45 Nov 2-5, 2016 REACH OUT TO GLOBAL CASHEW INDUSTRY ADVERTISE IN & For Advertisement in Cashew Week & Banner Space on CONTACT: "Do you have an interesting story to share with us on cashew value chain (in your region/country), innovation, processing, technology, financing or any topic related to cashew industry? If yes, write to us at Disclaimer: The data and information presented in this report are based on efforts of analysts at Foretell Business Solutions Private Limited, Bangalore and opinions and data obtained from experts and various industry sources. While sufficient care has been taken to check data and information prior to publishing, Foretell or its employees or external contributors will not be responsible for any kind of errors or omissions or misrepresentation of data or for losses incurred by any party either directly or indirectly based on the information published herein. Caution to Readers Although paid advertisements appear in this publication (in print, online, or in other electronic formats), Foretell Business Solutions Private Limited (the owner of cashewinfo.com) does not endorse the advertised product, service, or company, or any of the claims made by the advertisement. Readers are encouraged to do the necessary due diligence. However, in the interest of the industry, please share your concerns, if any, by writing to us at 27

28 Export Trading Group East Wing Index Tower, DIFC Area, Dubai, United Arab Emirates UAE - Ph: Mob: , Fax: cashew@etgworld.com, Web: