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Indian and Vietnamese processors of raw cashew nuts have too much stock and are no longer buying. Very bad news for East African producers starting their harvest.
The next few months promise to be difficult for Malagasy producers who have started their harvest, and those in Tanzania and Mozambique who will start in October. Most of their production goes to export, but the two main processors of Vietnam and India have considerably slowed down their imports of raw nuts in recent months and few new purchase contracts have been signed today. .
Over the first seven months, Vietnam imported 40% less raw nuts. This situation can be explained by the fact that currently the price of shelled walnuts is too low on the world market. For the Vietnamese factories, the transformation is no longer profitable and a third of these factories have closed their doors, some for five to six months. Such prolonged walkouts at this time of year are unheard of, says Pierre Ricau, chief analyst of the N’kalô agricultural market information service.
Closure of processing plants has not pushed prices up
The most surprising thing is that despite these lasting closures, prices don’t go up. The explanation is twofold: world demand, Western and Chinese, is experiencing a sharp slowdown and the supply has not diminished, because the Vietnamese obviously stocked up so much last year that they continue to put cashew in the market.
This situation of oversupply weighs on African producing countries. The last quarter of West African production has still not found a buyer. In particular, large stocks remain, particularly in Guinea-Bissau, Burkina Faso and Guinea in the Boké region.
East Africa processes too little locally
The harvest in East African countries, which has only just begun, will add volume to the already plethoric supply. ” The East African campaign therefore promises to be very difficult “, not to say catastrophic according to one of our interlocutors, with prices which could remain very low for several more weeks. Local processing could, in theory, be an exit route for newly harvested raw nuts, but it is underdeveloped and even declining in Mozambique and Tanzania, the two main cashew suppliers in East Africa. .