Cashew kernel prices are heading southwards in major wholesale markets in the country owing to subdued demand from stockists and retailers. Prices of all grades of cashew kernels and broken pieces have witnessed a drop in the range of 18-26 per cent, depending on the grades in the January-March quarter.
Prices for the W320 grade (the most preferred grade internationally) are hovering around Rs 445 per kg ex-factory, a decline of 18.3 per cent compared to Rs 545 in November last year. Prices of broken grades have slipped below the Rs 300 mark and are currently ruling at Rs 280 per kg, showing a decline of 26.3 per cent over the price of Rs 380 prevailing around Diwali last year.
"The confidence in the retail market is pretty low at the moment. Generally, the demand for kernels comes down in summer months as there are not many festivals and the wedding season is yet to catch up," Walter D'Souza, former chairman of the Cashew Export Promotion Council of India (CEPCI), and an exporter from Mangalore, said.
In Delhi, over the last 15 days, prices of the W320 grade have declined 6.25 per cent to Rs 450 per kg, while the prices of broken grades have slipped below Rs 300. Prices of all grades of cashew kernels (W180, 210, 240, 320 and 450) have declined in the last quarter.
"There has been a steady decline in both sales and consumption during the last few months. There is no support either from the export markets for the processing houses as the US economy and the Euro zone crisis have led to sluggish demand from overseas buyers. Overall, the market is erratic in the last quarter of this fiscal," D'Souza added.
However, prices of kernels in the retail markets have not seen a major decline and are currently sold in the range of Rs 720 to Rs 900 per kg in various supermarkets and kirana stores across the country.
"It takes a lag to reach the retail markets. Traditional shops cannot predict the price movements on a continuous basis, as they don't purchase cashew kernels very regularly. Hence, they are unable to pass on the benefit to consumers. Whereas supermarkets take into account the various costs like logistics, people cost and retail space cost, among others, and try to book profits in the volatile market," said G Giridhar Prabhu, managing director, Achal Cashews, a Mangalore-based exporter.
Over the last three years, these costs have gone up 30-40 per cent and the supermarkets normally prefer to offer other incentives to push their stocks rather than reduce the prices instantly, he added. A slight decline in the prices of raw cashew nuts has also led to the fall in prices of processed cashew. The raw nut prices have also declined to Rs 67 per kg compared to Rs 75-90 per kg in the last season. Also, the imported raw nuts are available at Rs 55 per kg.