Global Cashew Market Update: Trends and Projections

The global cashew market is witnessing significant developments as the Southern Hemisphere harvest progresses, with Tanzania playing a central role. Early indications from auctions and harvest reports provide insights into both the inshell and kernel markets, highlighting factors that could influence supply, demand, and pricing trends. 

Tanzanian Crop Update

The Tanzanian cashew harvest has made strong initial progress, with approximately 100,000 tons of inshells auctioned to date. Prices began at high levels but have since stabilized to align with broader market conditions. The first flush of the harvest looks promising, with projections of around 140,000 tons. However, later flushes are expected to underperform, as reports from the ground indicate lower yields than initially projected. Clarity on the overall crop will emerge after another 50,000 tons are auctioned. 

Demand for Tanzanian inshells is split between strong interest from Vietnam and softer demand from India. Vietnam is driving demand due to record-low residual stock levels, while India’s subdued purchasing has contributed to the downward pressure on prices. The pace of auctions will depend heavily on the harvest’s progress, particularly as weaker flushes could limit future availability.

Cashew Kernel Market Dynamics

Kernel prices continue to face a disconnect from inshell pricing, creating a challenging environment for producers and buyers alike. For pricing alignment, kernel prices will need to rise, or inshell prices must drop further. Seasonal demand for Christmas and Chinese New Year has kept the kernel market active but has not introduced the surprises needed to significantly shift pricing dynamics. The overall pace of demand remains steady but unremarkable, with buyers maintaining a cautious approach.

Bullish Trends Supporting Price Growth

The market holds several bullish factors that could drive prices higher. Low inventory levels in Vietnam are creating a tight supply environment for both inshells and kernels, making any uptick in demand likely to push prices upward. Elevated raw cashew nut (RCN) prices are another contributing factor, indicating underlying supply constraints. Additionally, global shipments of kernels remain steady, reflecting a healthy baseline of demand despite regional variances. Uncertainty around the Tanzanian crop, especially the possibility of weaker second and third flushes, adds to the potential for supply constraints later in the season, which could influence pricing dynamics further.

Bearish Factors Presenting Challenges

Despite these positive signals, bearish factors are tempering market enthusiasm. High kernel prices pose a risk to demand, particularly during the critical consumption periods of Christmas and Chinese New Year. Many buyers appear adequately stocked, reducing the urgency to make additional purchases in the near term. Weak domestic demand in India is another headwind, dragging down prices for both Tanzanian inshells and Indian kernels. This combination of factors creates a more cautious outlook, especially as buyers prioritize managing existing inventories over expanding their purchases.

Market Outlook: Balancing Opportunities and Risks

The cashew market remains at a critical juncture, balancing the potential for price growth with several limiting factors. On the bullish side, low inventories and high RCN prices suggest the possibility of price spikes if demand increases. However, weak demand in key markets like India and limited seasonal impacts may curb significant gains in the short term. The final trajectory of the market will depend heavily on the success of the ongoing Tanzanian auctions and the performance of the later flushes. As the season progresses, these factors will determine the balance between supply, demand, and pricing.