India: Worldwide weather woes to drive cashew price nuts

Cashew processors in Goa and elsewhere are keeping a close watch on weather conditions locally and in west African countries as raw material supplies may decide the industry's future and the product's pricing for consumers, sources told TOI on Friday. Though cashew growers are likely to get the best-ever price of 70-75 per kg around March 2011 - they earned 55-60 per kg last season - the unseasonal showers which have affected the flowering season are raising concern among processors about the availability of raw nuts.
"Cashew production worldwide has been affected by unseasonal showers as much in Africa as in Goa," A S Kamat, adviser, Goa Cashew Processors Association, said. While the domestic supply is short by 35%, all cashew-producing countries are facing a shortfall of 30%, he added. In Indonesia the tsunami has affected the cashew crop by about 30%, while in east Africa the crop has been hit by unseasonal rains, said Kamat. In west Africa where the cashew crop is harvested between November and January, late rains have partially hit the crop, he said.
This has led the raw material from west Africa to now fetch $1,800 per tonne ( 82 per kg) as compared to last season's $1,000-1,050 per tonne. "With bad weather impacting the production of the crop, supplies are likely to decide the pricing of cashew nuts," Kamat said.
Madhav Sahakari, president of the Goa Cashew Processors and Growers Association agreed with Kamat. "The standard grade cashew kernel is now selling at 480 to 500 per kgat the counter," said Sahakari. With availability of raw material a problem the trend of rising prices is likely to continue, he added. Incidentally, while local cashew nuts are expected to enter the market in March 2011, cashew growers are sure to fetch a higher price for their produce. "Lastseason, processors paid cashew growers 55-60 per kg, next year the purchase price is likely to be above 70 per kg," said Kamat. The processing industry is keeping its fingers crossed and hoping the winter will be good. "The late rains have helped irrigation and a good winter can help flowering for a better crop," said Kamat.