The cashew market is experiencing a bit of a holiday slump with prices dropping by nearly 8 per cent compared with the uptrend a couple of months ago.

J Rajmohan Pillai, Chairman of Beta Group, which owns the NutKing brand, told businessline that the demand from major importers such as the US and Europe has been weaker than expected, putting downward pressure on prices. Vietnam WW320 kernels (AFI quality) are trading around $1,600-$1,620 per tonne free-on-board (f.o.b).

In India, he said export kernel prices have dropped significantly with some sellers offering below $1,700. Raw cashew nut prices in Guinea Bissau stood at $1,590, Indonesia ($1,884) and Tanzania at $1,864.

“While the current market is a bit sluggish, we are hopeful for a rebound in the New Year and South Indian festivals in January that could bring renewed demand and help stabilise prices,” Pillai said.

Contributory factors

Pratap Nair, Managing Partner of Vijayalaxmi Cashew Company, said a good crop in East African countries and a post-Diwali dip in sales in India are contributing factors for the drop in prices. The bumper crop has also reduced supply constraints in many markets.

December, according to him, was always a lean month as far as cashew consumption is concerned. However, the commencement of wedding season in January is expected to perk up the demand. This, coupled with the arrival of next crop by March, could offer more supply in the market.

Referring to 2024, Nair said the El Nino impact has hit production in many West African countries, besides India and Vietnam with short crop that resulted in the prices soaring until a couple of months ago. However, prices started dropping with a good crop in many East African countries and the traditional dip in consumption after Diwali, he said.

Giridhar Prabhu, Chairman of Atal Group, said the kernel demand in the first four months of 2025 is likely to be subdued because there would be an anticipation of new crops. Most people will be drawing down on inventories but will buy sufficient material on time for consumption and therefore the kernel market will be steady with no upside.

New crop

On the new crop scenario for India, he said flowering has started due to climate changes and unusual rains and the harvest may begin in the middle of March which will extend the third week of May. There is a likelihood of India crop being better due to good moisture in the soil.

In 2024, global prices are returning to normalcy and not below par value. “We expect that the steady trend to benefit the farming community in India to get better prices by around 15-20 per cent over the average of last three years,” Prabhu said.

The world market will be influenced by West African crop scenario which is expected to be slightly better than last year. It will be depending on West Africa, Cambodia and Vietnam crop, he added.