The cashew nut market is showing signs of tightening as Vietnamese processors scale back operations and questions emerge about raw material availability ahead of the new crop arrivals.
Smaller factories in Vietnam have limited processing volumes or temporarily closed for the season as they await the new crop. This comes as raw cashew nut (RCN) prices have increased slightly following the start of Tanzania’s auction season.
The recent auction launch in Tanzania has been complicated by post-election violence, creating a difficult situation in the market. Current kernel prices would not allow processors to buy RCN at those levels without losing money. This pricing dynamic is influencing processing decisions across the supply chain.
Questions remain about RCN availability in Vietnam’s bonded warehouses. However, the general consensus is that stocks should be enough to fill the gap until arrivals of Tanzanian raw seeds and crops from Vietnam and Cambodia.
Based on current market knowledge, kernel prices might increase somewhat in the weeks ahead but are expected to move in today’s price range. The market is navigating the typical transition period between crops while managing supply chain logistics across multiple origins.
Industry observers at the recent Vinacas meeting in Vietnam discussed long-term prospects for cashew nut kernels. Continued demand increase, especially with the Chinese market picking up, might even cause short supply in the coming decade where demand might surpass supply, according to data presented at the meeting.
For procurement teams working with cashew kernels, the current environment requires attention to supply chain timing. The gap between crop cycles and the pricing pressure from elevated RCN costs are key factors to monitor through the transition period.
For more insights into the nut market, visit the full market analysis: https://app.vespertool.com/market-analysis/2429