The December chill seems to have caught up with the sentiments in the cashew nut market. The industry’s hopes of a revival in demand to coincide with the marriage season have hit a price barrier.
The weak sentiments in the cashew market have been more than compensated by a higher demand for other dry fruits. Sales have seen an upward trend with an extended winter and marriage season in Asia’s largest dry fruit wholesale market of Katra Ishwar Bhawan in Old Delhi’s Khari Baoli area.
“There is an increase in sales owing to the winter season. The prices have fallen by 5% since Diwali and the current demand is largely by consumers for home consumption,” said Coco Plus Dry Fruits owner Kamal Khanna, who sell dry fruits under the Coco brand across north India. The Delhi wholesale market accounts for 70% of the Rs 2,000 crore worth dry fruits imported into the country. On Wednesday, almond kernal was fetching Rs 350 a kg, cashew Rs 500 a kg, and walnut with shell Rs 150 a kg. Raisin was at Rs 100 a kg while chilgoza was at Rs 1,200 a kg.
On the NCDEX, almond for March delivery rose to Rs 366.25 per kg driven by an increase in demand in spot markets. NCDEX assistant vice president Siddharth Surana said prices were likely to remain stable with no major upward trend owing to a good crop in Australia and the US. “Compared to other dry fruits, prices of almonds have remained low and we don’t see a short supply in the year ahead. An increase in disposable income and an awareness about good health is leading to an increase in demand for dry fruits,” he said.
The cashew processing industry sees the sharp escalation in price as the main reason for the depressed demand. “The prices are at an all-time high of Rs 9,000 per carton for cashew nuts of lower white piece grade,” said Babu Oommen, Chairman, Alphonsa Cashew Industries, adding that the price has touched Rs 9,500 per carton for splits. A carton weighs 22.68 kg. The prices were at around Rs 6,000 and Rs 7,000 per carton for the two varieties during the same period of the previous year. The record prices this year have affected market sentiments, he pointed out. An important reason for the higher price is the huge increase in costs. Industry spokesmen point out that the cost of raw cashew has seen a major rise in the past one year.
The prices of imported raw cashew have increased to $1,750 per tonne from $1,250 per tonne a year ago. Along with this, the wages are also going up in the processing sector. In Tamil Nadu, the wages have seen a 30% increase while in Kerala the expected rise in wages is around 40%. Many units are working below capacity due to the shortage of raw material and labour.
The Economic Times, 06 January 2011
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