2023 cashew industry outlook bleak on subdued global demand
Amid declining global demand and rising supplies, the outlook for the cashew industry in 2023 is not so rosy.
Industry sources said last year was challenging with declining exports and the cashew sector expects the situation to be worse this year thanks to higher supply of raw cashew nuts and lower export prices with lower demand.
said J Rajmohan Pillai, Chairman of the Beta Group which owns the NutKing brand Business line Cuts in spending on discretionary items such as cashew nuts have hurt demand globally, making it difficult for prices to rise. Besides, the energy and food crisis has led to higher inflation globally, which has affected consumer spending. The current state is expected to continue this year as well.
Slack new commands
This is evidenced by the drop in new export order signings, which is one tenth of the normal rate. Usually, at the beginning of the year, companies sign contracts for a period of at least the third quarter. But this year, most importers in the United States and the European Union preferred not to plan shipments until the end of the second quarter, he said.
global production
Citing figures, Pillai said the global production of raw cashew nuts increased from 2.93 million tons in 2014 to 3.71 million tons in 2022 and is expected to reach 4.41 million tons. The difficult side of the industry is that demand does not keep up with supply.
Usually, this is the season when sales skyrocket due to the demand for annual contracts. But consumption and supply were affected for economic reasons. With low demand and export prices, he said that companies are showing no rush to import raw cashew nuts and that their prices are still high. Besides, he said, the expected recession in the US by the end of the year has hurt demand.
Last year, exports of W320 grade cashews reached $2.95-3.1 per ton, and this decreased to $2.5-2.6. Raw cashew nut prices are set at $1,200 per ton. Likewise, the high minimum price set by most governments is not applicable to the industry. He said that high temperature and irregular rainfall also affect the process of fruit formation, which leads to heavy losses.
Good crop
Pankaj N. Sampat of Samsun Traders noted that the cashew market has been holding steady at low levels for a long time. The 2023 crop looks good on most assets, but kernel yields are said to be lower on many assets. RCN prices have also declined from their opening highs and are now at reasonable levels.
Prices are expected to continue moving in the current range with some expectation of a small and gradual increase in the second half of 2023 provided demand picks up. Consumption declined in some major importing regions (US and EU) in the second half of 2022. Meanwhile, consumption in India was strong and the trend is expected to continue in 2023, given the very affordable prices along with consumer preference for snacks healthy.
He said that given the price declines between 10 and 12 years ago, expectations are that consumption in other markets will also pick up.