Current Market Situation

The global cashew market is experiencing a significant shortage of raw cashew nuts, leading to a sharp increase in prices. This shortage is affecting sheller plants, which are struggling to procure the necessary raw materials for processing. As a result, the prices of both raw and finished cashew products are on the rise, with an expected further increase.

Reasons for the Shortage And its Impact

A source attributes the price surge to the unfavorable climate conditions that have impacted cashew production. Over the past two months, sheller plants have faced difficulties in sourcing raw materials due to excessive heat and irregular rainfall, particularly in West Africa, which accounts for about 50% of the world's cashew supply. This climatic challenge has also affected Vietnam and India, major producers of cashew nuts. Additionally, competitive purchasing from producing countries has exacerbated the shortage.

The shortage has significantly affected the operations of cashew sheller plants. According to a source, only about 50% of sheller plants are currently operational due to the scarcity of raw cashew nuts. The prices in South African countries have surged, and some countries have even started prioritizing local industries by restricting the export of raw cashew nuts. This situation is making it increasingly challenging to maintain continuous production.

Market Response and Future Outlook

Market veterans note that there is a strong demand for cashews across India. This demand is driven by major buyers preparing for the upcoming festive season from July to October. As a result, there is a significant shortage of cashew pieces and whole nuts, particularly the two-piece and four-piece varieties. The current price of raw cashews has soared just a month ago.

The scarcity of cashew pieces and whole nuts is affecting markets across India, including Delhi, Jaipur, Kanpur, and Amritsar. The reduced crop yield in India and globally is expected to keep prices high. This trend is likely to continue, with significant implications for the cashew trade and related industries.

The cashew market is currently facing a challenging period due to a significant shortage of raw materials. This has led to a sharp increase in prices, affecting both raw and finished products. Exporters are recommended to diversify their sourcing, invest in storage, strengthen producer relationships, monitor market trends, and focus on value addition. By implementing these strategies, exporters can better manage the current challenges and position themselves for future opportunities in the global cashew market.