The hottest news of the cashew industry in 2021 is the spike in raw cashew exports from Cambodia to Vietnam , increasing 445% from 210,000 tons to 1.1 million tons from January to November 2021. Several theories have been put forward, but in my opinion none of them are convincing. In fact, the 2021 figures have shown that the raw cashew supply situation can be distorted. To give a personal perspective on this error, below is a summary of data from January to November 2021 according to the import and export report from Vietnam:
- Vietnam has imported 3 million tons of raw cashews plus a domestic harvest of 400 thousand tons to create a total output of raw cashews put into processing in 2021 of 3.4 million tons, equivalent to about 750,000 tons. tons of cashews.
- Vietnam exported 560 thousand tons of cashew kernels, including about 72 thousand tons of "temporarily imported" kernels (equivalent to about 90% of imported African cashew kernels). export = 488 thousand tons of cashew kernels.
- This means that Vietnam's inventory increases to: 750 thousand - 488 thousand = 262 thousand tons of cashew kernels (raw volume = 1.20 million tons of raw cashews) - this is unlikely.
Until the mystery is revealed, the actual supply remains a mystery. However, considering the systematicity of the data based on previous years' reports and the increase in crop year 2021/2022, it is more reasonable to estimate the quantity of raw cashews imported from Cambodia around 350. to 400 thousand tons. Based on this prediction, the situation will be as follows:
- Vietnam's raw cashew imports in 2021 are 2.3 million tons (3 million - 0.7 million) with the total output of raw cashew processed at 2.7 million tons (equivalent to 600 thousand tons). multiplier).
- This means that, even with the option of reducing import data from Cambodia above, Vietnam's inventory will still increase by 600 - 488 = 112 thousand tons of cashew kernels (raw volume = 485 thousand tons of raw cashews). - This is a very high level of inventory, corresponding to the need for processing materials within 2 months of Vietnam, or equivalent to more than 10% of the world's raw cashew production.
The second big news is the increasing role of African influence in cashew processing . Africa accounts for nearly 60% of the world's raw cashew production, with the largest cashew producer being Ivory Coast contributing 1 million tons of raw cashews (nearly 25% of the world's total raw cashew production). In the past 2 to 3 years, cashew processing in Africa has increased significantly, which is most evident in the fact that Vietnam has increased its imports of pre-processed cashew kernels from Africa, up 60%. (from 51,000 tons to 81,000 tons from January to November), plus a significant increase in imports from the US and EU.
Two other highlights, continuing from 2020, are still Covid and Logistics issues.
Severe restrictions and blockades have affected the production and shipping of products from Vietnam during the peak few months of the epidemic. Production and consumption in India were also affected for a few weeks, two or three times; however, there is not much impact on supply from Africa or consumption in importing countries.
Logistics continues to be a big problem for goods from Vietnam to the US and EU. Freight rates have been continuously increasing since the second half of 2020 with a leap towards the end of 2021. Current freight rates increase by nearly 10 thousand USD/ 20" container (to the EU) and more than 18,000 USD (to the US) . There is a shortage of empty containers and it is difficult to book ships regularly.
Regarding the cashew kernel price , there is not much to say about the cashew kernel price in 2021 when the kernel price has stabilized in a narrow range. For most of the year, W320 was trading between $2.8-3.1/lb FOB Vietnam except for a brief spike in May-August when trading was done in the $3, 1-3.4 USD/lb FOB Vietnam. Surprisingly, African processed kernels trade about 20-25 cents/lb higher due to lower freight rates, shorter transit times and, in many cases, better quality compared to normal. Exports from India are low (arguably the lowest in history), only a few niche buyers are willing to pay higher Indian prices. However, India's raw cashew imports and kernel consumption remained stable.
It is worth mentioning that the difference between the selling price of whole cashew kernels and broken cashew kernels has reduced to a more realistic level: WS is about 50-60 cents/lb lower than W320 and LP is about $1.0 lower than W320 - This is explained by better processing leading to a reduced amount of broken goods available and more uses for the tank cargo.
Similarly, raw cashew prices were stable for most of the year, from 1100 to 1400 USD/Mt C&F and increased to 1500-1600 USD/Mt in Q4 when there was not much stock available for trading.
Good consumption growth in all markets is reflected in the larger volume of exports from Vietnam and Africa. Although India's consumption in the previous quarter was not as good as expected, full-year 2021 consumption is still good overall, recovering from the lows of 2020.
Going forward, the outlook for 2022 seems more similar:
- The supply is quite comfortable and there is no adverse news from any source (so far).
- Demand is expected to remain strong with continued focus on healthy foods supported by reasonable prices fluctuating within a narrow range.
- Covid and the challenges of uncertainty about its spread, intensity and impact are not going anywhere anytime soon.
- Logistic costs are high and challenges are likely to continue for most of the year.
- Cashew processing in Africa will continue to increase with investments already being made in several countries. Importer interest also increased after seeing better than average quality with the advantage of shorter supply chains (single origin, traceability, process control, etc.) stronger) and diversify supply sources.
- In terms of cashew prices, nothing on the horizon indicates any significant change in the price range. However, there are bound to be periodic spikes and dips based on news (and rumours) and any specific developments (Covid and not Covid?!)
Source posted by:https://www.vinacas.com.vn/goc-nhin-nganh-dieu-nam-2021-va-du-bao-2022-bv2711.htm
