Supply chain and demand outlook for Cashews April-June 2020
April 23, 2020 | 0 Comments
With India restarting agricultural harvesting and processing activities from next week, and Vietnam already operating at nearly full capacity, there is more visibility on the supply chain. It is estimated that Indian processing companies will be able to operate at more than 70% capacity by the end of May. Demand is likely to be significantly depressed in the Indian domestic market since parties, restaurants, bars, tourism wont restart before July at the earliest. Plus, loss of income will likely reduce consumption of expensive items. The domestic kernel consumption is estimated to be 320,000 MT in 2018. Possibly falling to 250,000 MT in 2020. To offset the global demand contraction in edible nuts is a partial reduction in farm collections and efficient drying and storage of the crop due to labour shortages. It is unclear to what extent the current crop will be lost worldwide in this way. However prices are at a historic low and we recommend buying forward positions. Near by shipments can be bought weekly as the spot market has ample inventory. When the existing inventory of kernels and raw nuts can be shipped from various ports that are locked down is not fully clear. But most estimates suggest shipping and ports will be operational by mid May or June.
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