Untitled-1 1 10/8/2012 6:19:11 PM Vengurla-7 and Balli-2 variety. The average yield is about 600-700...

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Dear Patrons of Cashew Week

While we welcome all our readers to the prestigious international conference on cashew at Goa, we thank all our subscribers and sponsors for their support which paved the way for this print edition.

As we all know, Goa and cashew have a special relationship as Goa is associated with its beautiful beaches abound with lush green cashew trees and the processing of world famous feni.

While we have presented the picture of the national and international cashew markets in our regular features of the weekly, we also have a collection of articles relevant to the occasion, written by eminent writers focusing on various aspects associated with cashew.

The cashew markets across the world continue to be dull and kernel prices seem to have got stuck somewhere in a range for a long time. The reason for the same seems to be the extra caution being exercised by the players who are deferring any forward positions and are transacting small quantities with confirmed orders only. The whole industry is waiting for cues from the demand side for this lull to be broken. We hope that the discussions in the conference will throw light on the upcoming demand situation in the coming festival season.

While on one hand we need to ponder over the economics of current cashew cultivation and processing and the ultimate kernel prices which determine the same, we must acknowledge the ever growing appetite for cashew and its products across the world. While Africa is rapidly increasing its processing capacity and Vietnam is having issues with maintaining its plantations, it is high time that India has to focus on enhanced productivity technologies and area expansion for a larger supply base in order to maintain its leadership among the cashew processing nations of the world. Along with this, we need to focus on quality and food safety aspects to satisfy the discerning consumers of tomorrow. We hope that the conference will provide an array of thoughts and enrich the knowledge of the world cashew community on these pertinent aspects.

Wish you Happy Reading from the Cashew Week Desk

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Sl. No. Content Page no.

1 Development of Cashew in Goa 5

2 Cashew Nut Shell Liquid in India 8

3 Indian Cashew Industry Meeting Competitive Challenge of Vietnam 9

4 Cashew Nut is in the Seed 14

5 Indian Cashew Market 15

6 International Cashew Market 27

7 RCN Quality in Côte d’Ivoire 29

8 Currency Movements 30

Foretell Business Solutions Private Limited#146, 1st & 2nd Floor, Gopal Towers, Ramaiah Street,HAL Airport Road, Kodihalli, Bangalore - 560 008. IndiaTel : +91 80 2527 6152/53, Fax : +91 80 2527 6154Email: [email protected], [email protected]

Table of Contents

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www.cashewinfo.com Page | 5

Development of Cashew in Goa

Satish S. P. Tendulkar Director of Agriculture, Government of Goa

Cashew as everybody knows was introduced in Goa

by Portuguese who ruled this State for four and half

decades till 1960. The tree being a very hardy and

easy to grow in the tropical areas was introduced

as a tool for soil conservation on steep slopes, on

hills in Goa in between year 1550-1600. But the

real economic value of cashew nupt was known to

people only after about 100 years of its introduction.

The technology of processing of cashew in Goa is

thus 250 years old. In course of its cultivation the

grower understood the value of its fruits for making

alcoholic drink “feni” and records of feni making

are traceable upto year 1870. Today cashew is

generating produce worth Rs. 200 crores annually for

the State and involving more than 4 lakh population

of the State in direct and indirect employment.

One third of the area under cultivation in Goa is

under Cashew covering 55000 Ha and producing

about 25000 tonnes annually. The State has about

15000 ha under high yielding grafts and remaining

area is under seedling progeny. A large chunk of

land under cashew of about 7000 Ha is with Goa

Forest Development Corporation, which is also

seedling progeny. The remaining all area is in private

holdings. The average productivity of cashew in

Goa is about 450 kgs per hectare with trees ranging

from 60-250 per hectare. The per tree production

from sparsely populated plantation is more while is

very low in thick plantation. The sparsely populated

plantations are also not cared properly, and in many

of the places the wild bushes and shrubs have been

growing rampantly. The need is therefore felt for

cleaning such areas to facilitate optimum plant

population to enhance production. However, the

forest regulations have been a hindrance in this

activity. The high density plantation out of seedling

origin generally tend to be tall and very frequently

the trees are seen broken down in rains. The stem

borer problem is noticed to be increasing in such

areas.

The grafted plantations are being established in Goa

for last 15-18 years. The Vengurla-4 is the most

predominant variety which is cultivated followed

by Vengurla-7 and Balli-2 variety. The average

yield is about 600-700 kg per hectare, though some

plantations have been harvesting upto 2000 kg per

hectare. Considering the present market rate and

the yield of feni the farmer can earn anywhere

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between Rs 20,000/- to Rs 70,000/- net profit per

hectare from cashew with systematically managed

plantation.

Cashew in Goa is generally grown in neglected

hill slopes without irrigation or manuring, thus

by default it is organic in nature. Many of the

processing units exploit this situation for exporting

this product as organic. However, much need to be

done to improve the productivity of this crop to meet

the ever growing demand of this organic cashew.

There are about 38 cashew processing units in Goa

with a processing capacity of more than 35000

tonnes. However, much of the local cashew is

marketed outside Goa and local processing units

face a shortage of produce. The deficit is thus met

from the imports from other States or from other

countries.

Cashew in Goa is unique. It is mainly because

the crop in Goa is not harvested but is collected.

The fruit ripens on tree and the fallen fruits are

collected. This provide full term for the fruits to

develop sugar and other components including the

size of kernel which provide an unique taste. The

full development of the kernel also increases the

recovery for processing industry and improves the

keeping quality of raw nuts, this is a major reason

for the high demand of Goa cashew by processing

industry which get a premium rate in the market.

The feni making industry is thus supportive to the

production of quality cashew.

The plantation of cashew in Goa are heterozygones.

The vide varieties of plants with different characters

of fruit, nut, productivity and quality are observed.

The plantations are thus a very good source for the

botanist and breeders. The cashew clones developed

in Goa are mainly selection of the available germ

plasm. The Balli-1, Balli-2, and Bhaskara are some

of the examples. Taking clue from the researchers

some of the farmers have identified some of the

local high yielding trees and are multiplying them.

This shows the immense wealth, the State is having

in terms of germ plasm variability which is ready

for exploitation for economic betterment of cashew

in the state as well as for the Country.

Development of Cashew is taken up in the State

with support from National Horticulture Mission.

Annually about 300-500 Ha of new area is covered

while about 700-1000 ha is rejuvenated with grafts.

Assistance of Rs 11250/- per ha is provided for new

area and Rs 15000/- is provided for rejuvenation.

The assistance is provided in three instalments.

Assistance is also provided for soil and water

conservation measures. Many of the plantations are

now certified as organic plantation with linkage to

processing units. These farmers get Rs 4/- to Rs

5/- extra per kg of raw nut. Incentive of Rs 10,000/-

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per hectare is also provided for organic certification

in cluster of 50 Ha. The support from Government

needs to be enhanced to at least Rs 22000 per hectare

due to rising cost in recent years.

The cashew grafts are produced in government

nurseries as well as in private nurseries. Annually

about 4 lakh cashew grafts are produced in the

State. Goa has a well developed marketing setup of

new cashew. The Goa State Agriculture Marketing

Board has market yards in 11 places with facilities

for correct weighing and record. The processing

units either buy the raw nuts at this market directly

or purchase through the traders of cashew nut. The

processing in Goa is generally by steam roasting.

However, some units produce and sell drum roasted

cashew at premium rates.

Cashew cultivation is getting more and more

popular and added thrust is given for increasing the

production and productivity. However, some issues

need to be attended on top priority to meet the ever

growing demand of this crop by processing industry.

Some of them are as below:-

Increasing productivity per unit area: The per 1.

hectare production from cashew grafts need

to be enhanced to at least 1500 kg by proper

management, manuring and other methods. A

standardised package need to be developed for

the State.

Proper manuring schedule specially with 2.

certified organic inputs need to be standardised

for organic cashew.

The widely available cashew germ plasm in 3.

Goa needs to be exploited for selection of new

lines before they get vanished with induction of

grafts. This plantation needs to be protected as

germ plasm bank.

The old cashew plantations as well as the newly 4.

developed once from grafts have been showing

an increasing trend of stem borer infestation.

The traps or other biological means for its

control need to be developed to increase the life

span of the cashew plantation.

The inter crops in between cashew under 5.

rainfed cultivation need to be recommended

without any competitive effect.

The production of cashew feni or ethanol from 6.

cashew apple juice needs to be standardised

as a by product like from sugarcane molasses

to improve cashew quality and income from

cashew.

Pest control by fogging of pesticides need to be 7.

standardized.

Contour trenching or continuous contour 8.

bunds need to be created for soil and water

conservation.

Drip irrigation should be promoted. 9.

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Cashew Nut Shell Liquid In India

Omprakasn N. Phadnis, M/S. N.S. Phadnis, Panruti, Tamil Nadu

Cashew Nut Shell Liquid (CNSL) is used in India for ages now. Since the Portuguese brought this crop to India, it showed its presence more on west coast than on south. For decades only Kerala, Kar-nataka and Goa were good cultivators and it took some years for Tamil Nadu and AP to join them. To-day, Gujarat, Orissa, West Bengal and some parts of Manipur are also cultivating.

In Kerala and Goa, the oil was initially used for the purpose of water proofing. All the ‘dhonies’ i.e. small boats were applied this oil which was ex-tracted by kiln method in various villages in Kerala. It was only Pierce Leslie which was doing the pro-duction of CNSL in scientific and mechanized way. They were having bath oil roasting method. After that this cashew processing method developed lot in Kerala but in Mangalore area and Goa area the nuts were processed by drum roasting method only. Later, it was discovered that the kernels got yellow-ish and therefore, in 1970s, the bath oil method was discarded and steam roasting came in to existence. This method is fully acceptable and modernized now every where. The shells that are available now are subjected to crushing by expellers and the oil is ex-tracted from the shells like ground nut kernels. This oil is subjected to various methods of purification.

As mentioned, the initial use of the oil restricted to water proofing and it followed with some medici-nal use. Later on, it was discovered that the CNSL polymerizes fast and could be used as phenolic sub-stitute. It was used in rubber industries. The RRL, Hyderabad were able to distill the CNSL and spread the use of cardanol, residol etc. Card Chem Indus-tries of Hyderabad were pioneer to set us the first distillation unit of cardanol from CNSL in India.

Today there are more than 15 well working distilla-tion units in India mostly spread in south. The car-danol which is having phenolic structure is used as phenol substitute and has good demand overseas in brake linings, paints and chemical industries includ-ing colors. CNSL has been in use in brake linings, paints and water proofing industries along with in plywood industries too. Both CNSL and cardanol are used in foundry industries on a very good scale.About few years back, when the crude oil prices started raising globally, once again thoughts went for the fuel purpose of CNSL. Trials are on for using it as bio-diesel fuel. At this moment it is used widely in blending furnace oil. The furnace oil properties does not alter much and it is very profitable for the furnace oil suppliers to add CNSL to bring down costs of furnace oil.

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Indian Cashew Industry Meeting Competitive Challenge of Vietnam

Madhoo Pavaskar 1, Archana Kshirsagar1

History of Cashew Industry in IndiaCash in cashew seems to reveal that cashews are commercially very valuable processed nuts in the world. The English name cashew is derived from the Portuguese name for the fruit of cashew plantation, caju. In India also, cashew is commonly known as kaju, and was brought by the Portuguese from Brazil during the 16th century, and was first planted in Goa, from where it spread to other parts of the country, and thereafter across Southeast Asia, and even Africa.

What is the wonder about cashew? Usually, a seed is inside a fruit; but, unlike other fruits, cashew seed or nut can be easily noticed, without cutting the fruit, as it is attached outside to the lower portion of the soft cashew apple, which is not so much a fruit as an enlarged stem of the cashew tree. How captivating is the sight of a cashew tree, indeed! Incidentally cashew nut also ranks first among the world production and trade of edible nuts.

Four centuries ago, when the Portuguese landed on the Indian soil, they brought with them the priceless

tree nut, Cashew. Cashew came, conquered and took deep roots across the entire coastal region of India. Cashew found the Indian soil more congenial for its growth than even its homeland - Brazil. Not surprisingly, cashew soon gained popularity as a cash crop in many parts of the country. Large-scale commercial cultivation of cashew commenced in India during early 1960s, however. Today, India is the largest producer and processor of cashews, and is still seeking new areas for cultivation in the country. Cashew is presently grown in Kerala, Karnataka, Goa, and Maharashtra along the west coast, and in Tamil Nadu, Andhra Pradesh, Orissa, and West Bengal along the east coast.

The products of cashew fruit are cashew apple and nuts/kernels. Cashew apple is used in the preparation of jams, as also for the manufacture of soft and alcoholic drinks, in Brazil. In India, cashew apple is extensively used only in Goa to prepare cashew liquor called feni.

In India, cashew processing began during the first half of the 20th century. The processing was

Dr. Madhoo Pavaskar is Director, Research & Strategy, Financial Technologies India Limited, Mumbai. Archana Kshirsagar is Assist. Vice President in the same company, and is working with Dr. Pavaskar. The views expressed in

the article are personal.

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then manual. Cashew kernel is covered by a thin membrane called testa, which contains non-edible substance tannin. So, processing of cashew kernel is indispensable. The yield of kernel is around 22-24% of raw cashew in shell. The major by-product of cashew processing is cashew nut shell liquid (CNSL), which is an important raw material used in the manufacture of resin.

India is the second largest producer of raw cashew nuts in the world, the first being Nigeria; India ranks number one in area under cashew plantations, though. To be fair, almost 70% of the global raw cashew production in 2010 was accounted for by just four countries, namely, Nigeria, India, Côte d'Ivoire, and Vietnam. If three more countries, namely, Indonesia, Philippines, and Brazil, were added, then these seven countries together contributed as much as 84% to the total world production in that year. While India shared nearly 19.6% of the world acreage under cashew in 2010, it contributed 22.2% to the world production. This was because it’s per hectare yield of cashews in shell at 660 kg was then slightly higher than the global average of 585 kg. Nevertheless, India’s average yield of cashew nut in shell was much less than similar yields of other major cashew producing countries like Nigeria (2 tonnes), and Vietnam (1 tonne), and Philippines (4.8 tonnes)

India is also the second largest exporter of shelled cashew (kernels) in the world, and follows Vietnam that leads globally in cashew exports. India enjoys

comparative cost advantage in not only production of cashew fruit, due mainly to long coastal line of the country that favours cashew cultivation, with apt soil and climatic conditions, but, more importantly, also processing of raw cashews, owing to abundant availability of cheap and skilled labour. To be sure, India may well be regarded as the global leader in cashew processing, mainly because of the dexterity of its labour. For, when processed manually, broken nuts hardly account for 20% of the country’s output of processed kernels.

Location of Cashew IndustryCashew processing industry in India gathered momentum through the last over half a century. In the early years, the industry was located mostly in Kerala, which had then over 50% of the cashew plantations in the country. But land ceiling legislation restricted the expansion of cashew sowing in Kerala, as demand for cashew nuts grew. Therefore, over the years, cashew cultivation extended to the other coastal states of the country, more particularly in the Sindhudurg district of Maharashtra. The cashew industry promptly developed in other states, too. High value added tax (VAT) of 12.5% in Kerala also fuelled the growth of the industry in other states, where such tax was around 2-4% only.

The number of cashew processing units in the country increased rapidly from 170 in 1959 to as many as 3650 in 2005-06, the last year for which the official government data are available. The total capacity of processing units in India was then 15 lakh tonnes in

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terms of raw nuts, and the capacity utilization was 75%. Maharashtra had then 2200 units, followed by Kerala 432 units, and Tamil Nadu 417 units. Nearly 84% of the processing units in Maharashtra were in the small scale cottage sector.

Probably, at present, the country may have around 4000 cashew processing units, with an installed capacity of about 18 lakh tonnes. Assuming 75% capacity utilization, as in 2005-06, the utilization may presently be estimated at around 14 lakh tonnes. Half of the capacity is utilized through domestic supplies, while for the rest the industry depends on the imports.

Cashew Processing Cashew processing involves roasting/boiling, moisture conditioning, shelling, drying, peeling, grading, and packing. Four types of methods, namely, sun drying, drum roasting, oil bath roasting, and steaming, are adopted by the different processing units.

Traditionally, experienced semi-skilled workers processed raw nuts manually. Since 1960s, the processes came to be mechanized for roasting, CNSL extraction, and shelling. Nevertheless, for the most part, cleaning of raw materials and kernel grading by sizes have still remained manual operations.

Although, cashew processing industry in India involves low capital investment and operational costs, and therefore achieves much greater

efficiency in terms of yield, it needs a large number of experienced workers, working at unhealthy levels of exposure to CNSL. In contrast, the mechanized methods are more vulnerable due to shortage of spare parts, and require large volumes of raw material supplies for efficient operation. Moreover, though mechanization is introduced in cashew processing, the availability of skilled and cheap labour, and better quality of kernels under manual processing, bounds the scope for wide mechanization. Mechanization is confined to mainly in roasting/ boiling, and packing. But manual labour continues to be in use in such processes as shelling, peeling and grading. Not surprisingly, capacity utilization of fully mechanized units in the country, by and large, operates at below optimum. Nevertheless, the industry in India, being mostly manual and labour intensive, employs as many as four lakh workers, with 95% women employees.

Exports of Cashew Nuts In the fiscal year 2011-12, India exported almost 132,000 tonnes of shelled cashew nuts, as against 106,000 in the previous year. In fact, India’s cashew nut exports increased from 82,000 tonnes in 2000 to 132,000 in 2011-12, which represented an annual growth of 4.45%, the exports witnessed ups and downs during the intervening years, though. What’s more disturbing is that even though India ranks second globally in cashew exports, a small country like Vietnam, whose production is less than half of that of India, exports twice as much as India ships abroad. Vietnam has thus emerged as India’s major



competitor in global cashew export trade. Worse still, India even imports, albeit, small quantities from Vietnam, of late.

Although Nigeria is the leading producer of cashew in the world, it seems that neither does it export cashew nuts in shell, nor cashew kernels in meaningful quantities. It appears that it consumes most of its output of cashew in shell as well as cashew kernels as snack food domestically. Very small quantities of cashew nuts with shell are exported to mainly India. Cashew processing industry in Nigeria is still not well developed, and caters mostly to the domestic market. Quite a few of the Nigerian processors have joint venture partnerships with Indians and use Italian (Oltremare), or Indian technology. Overall, not being a major exporter of cashew kernels, Nigeria, despite its predominance in the production of cashews, is hardly as yet a threat to the Indian cashew industry in the global cashew kernel market.

Among other nations, Brazil ranks third major exporter of cashew kernels. It exported 42, 000 tonnes of shelled cashew nuts in 2010. But its exports have been hovering erratically between 30,000 and 50,000 tonnes through the first decade of the New Millennium. They had peaked at 51, 500 tonnes in 2007, but have fallen thereafter. Though official statistics are not available as yet, it seems that Brazil’s cashew kernel exports had probably dropped further in 2011, since its production of

cashews in shell had more than halved from 220, 000 tonnes in 2009 to as low as 104, 000 tonnes in 2010, with a dismal per hectare yield of barely 140 kg – the lowest amongst all the cashew producing countries in the world. In fact, Joy Business of Ghana recently reported that Brazilian investors are seeking to set up cashew nut processing plant in Ghana, probably owing to Brazilian farmers moving away from cashew cultivation to other crops like coffee and cocoa. Overall, it appears that the Indian cashew processing industry and cashew export trade may not face a severe competitive menace from Brazil.

The real threat to India is from Vietnam only. Since the domestic supplies of raw cashew nuts in both the countries are falling short of the requirements of their processing industries, both countries are importing mainly from Cote d’ Ivoirie, Tanzania, Guinea, Ghana, and to some extent from Benin, Indonesia, and Mozambique. No doubt, Vietnam’s exports have been growing at almost 17% per annum through the past over a decade, compared to just about 1.25% growth witnessed in India’s cashew exports. Yet, Vietnam is perhaps not so much competing with India in the international cashew export trade as in the global markets for importing raw cashews with shell.

Meeting Competitive Challenges from VietnamBut even Vietnam may not really be as big a threat to India as it appears. For one thing, Vietnam’s domestic production of cashews with shell has been rapidly falling in recent years, having slumped

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in 2010 to as much as a fourth of what it was in 2010 - from 1.25 million tonnes to merely 29, 000 tonnes. Though precise reasons for the swift fall in Vietnam’s cashew production is not known, it seems that, of late, Vietnam has moved to augment its production of rice and spices, especially pepper. India’s cashew output, on the other hand, has remained steady around 650, 000 tonnes. Manifestly, India’s dependence on imports of raw cashew nuts is much less than that of Vietnam.

This is not all. Export demand for cashew kernels from the developed countries like USA, Europe, and Japan, which together account for 90% of world imports of shelled cashew nuts, continues to remain strong, despite recession in those economies. Consequently, the average unit value realization on world cashew nut exports has swelled from US $ 3, 369 per tonne in 2002 to US $ 5, 351 in 2010, showing a net increase of 59% over the period of eight years. The average unit value realization on India’s exports of cashew kernels, however, rose by 87%, from US $ 3,251 per tonne to US $ 6, 066 over the same period. The higher rise in the unit value realization by Indian cashew exporters seems to reflect the superior quality of Indian cashew kernels.

What’s more, while the average global unit value cost on imports was higher at US $ 1, 087 per tonne in 2010, India could procure raw cashew in the world

markets at a lower average cost of US $ 992 during the same year. In fact, India has been consistently buying raw cashews in the global markets at a price lower than the average world import price. As a result, the cashew processing margins of the Indian cashew industry has remained higher than that of the global industry. That gives India a competitive edge over other cashew exporting countries, including Vietnam.

India also has an added advantage in that it can expand its cashew cultivation owing to the availability of plenty of land in its extensive coastal areas. Vietnam does not have a similar advantage. What India needs to do is to adapt a phased replanting of cashew trees with grafts of improved varieties to achieve a higher growth rate of cashew production. At the same time, the cashew industry should also improve its efficiency and viability by adapting high levels of hygiene standards to increase production of better quality kernels that can fetch higher value in the export markets. Benchmarking the Global Cashew Industry, Micro and

Small Enterprise Trade-Led Growth Program in Brazil,

Development Alternatives, Inc (DAI), Melissa Hall,

Pareen Patel, German Sarmiento, Nikola Smith, Aimee

Sostowski, and Stephanie Waxman, May 2007.



Cashew Nut is in the seed

Dr. Lakshmanan, Head, Horticultural Research Station

Cashew Kernels are processed from raw cashew seeds, those intact from the shell grading them to required standard by the food companies all over the world. The Kernel is dried to loosen the skin

which is then carefully peeled off. Cashew kernels should have moisture content not greater than 5 percent by weight and preserved in a dry and clean place. Cashew kernel is surrounded by a fine brown seed coat, contains antioxidants which protect the kernel from penetration by atmospheric oxygen so preventing it from becoming rancidity. Cashew kernel has oil, edible linoleic acid and kernel cake. Cashew nut shell liquid has phenolic compound. The cashew testa has tannin of commercial utility.

Majority of the nut are in the fruits, or fruit includes nut. In Cashew crops cashew apple (fruit) holds the seed at distal end. Cashew apple with conical shape and size and its juice contains 80-85% water content. The seed attached to fruit, which has edible kernal called cashew nuts. The general statement for

cashew nut pointed to seed but actual nut in side the seed. The seed that inculcate the tasty nut called kernal. The nature adds tangible delicious and sweet olfactory from soil to tree, tree to fruit, fruit to seed and finally seed nut in a miracluls morphology which made the cashew nut has dollar earning crops. The seed coat is a guard with tannin odors may able to preserve the cashew nut luster, shinning, glossy appearance, plumule and radical, with considerable air pouch from the effect of biotic and abiotic factors. That means cashew nut in the seed is the nature phenomenon, which deals the postharvest management of food security and preservation by the cashew apple before abscission.

A Cashew nut in the apple may not be tasty and remains as seed if excites as such in the nature. The composition of cashew apple like, water, sugar, mineral, acids, fats and carotene compound when reaches to seed part the moisture content reduces but ample increase in carbohydrate, protein, fat, calcium, phosphors and iron. In addition, over to the kernel seed testa that forms with moisture, tannin, fiber and oil act as cashew nut inner protection.



Indian Cashew Market

Price Movement\

Average FOB prices (USD/lb) of W-320 grade Kernel

This week W320 grade prices moved down to USD 3.20 to 3.35 per lb compared to last week level of USD 3.25 to 3.40 per lb FOB at Mumbai.

Raw Cashew Nut Price Trend-India (Rs.80/kg)

This week, RCN prices remained stable at Rs 6000-6250 per 80 kg bag in Vetapalem (AP).

Commentaries by Experts

Mr Pankaj N. Sampat, Samsons Trading Company

FOB prices USD per lbs

Grades Prices for 09/29/2012

Prices for 10/06/2012

W240 3.60 to 3.75 3.55 to 3.75W240 3.60 to 3.75 3.55 to 3.75W240 3.60 to 3.75 3.55 to 3.75W320 3.25 to 3.40 3.20 to 3.35W320 3.25 to 3.40 3.20 to 3.35W320 3.25 to 3.40 3.20 to 3.35W450 3.00 to 3.15 3.00 to 3.15W450 3.00 to 3.15 3.00 to 3.15W450 3.00 to 3.15 3.00 to 3.15SW320 3.00 to 3.15 3.00 to 3.15SW320 3.00 to 3.15 3.00 to 3.15SW320 3.00 to 3.15 3.00 to 3.15SW360 2.75 to 2.90 2.70 to 2.90SW360 2.75 to 2.90 2.70 to 2.90SW360 2.75 to 2.90 2.70 to 2.90SSW 2.50 to 2.65 2.50 to 2.60SSW 2.50 to 2.65 2.50 to 2.60SSW 2.50 to 2.65 2.50 to 2.60WS 2.00 to 2.25 2.05 to 2.25WS 2.00 to 2.25 2.05 to 2.25WS 2.00 to 2.25 2.05 to 2.25WB 2.10 to 2.30 2.20 to 2.30WB 2.10 to 2.30 2.20 to 2.30WB 2.10 to 2.30 2.20 to 2.30LP 1.65 to 1.80 1.60 to 1.75LP 1.65 to 1.80 1.60 to 1.75LP 1.65 to 1.80 1.60 to 1.75

During weeks 39 + 40, we saw slightly more activity from USA and EU than previous weeks. BUT, the cashew market is continuing to pass through the longest quiet and steady period in many years. Despite this, there has not been much change in prices in the last 3 months!! BUT, the range of offers from different processors continues to be wide – current prices are W240 from USD 3.55 to 3.75, W320 from 3.20 to 3.35, W450 and SW320 from 3.00 to 3.15, SW360 from 2.70 to 2.90, Splits from 2.05 to 2.25, Butts from 2.10 to 2.30, Pieces from 1.60 to 1.75 FOB. There has been a slight pick up in activity in the Indian market as well in the last few days. Although there has not been any big increase in prices in domestic market, the appreciation of over 5% in value of INR vs. USD means the equivalent USD prices are higher.



On the RCN side, there is nothing much to report. There have been some sales from stocks of West African RCN in Vietnam and India. Good volume of West African RCN is still available but quality and consequently realization / kernel parity are a concern. Good quality Indonesia RCN continues to trade at a significant premium. No news from Tanzania or Mozambique about pricing and movement, except that crops should be normal – question is how much will be collected + sold (and when). There is no change in the news from Brazil – expectations are for a crop below 250,000 tonnes for third year in a row.

Supply of RCN is comfortable and unless the 2012/13 crops are bad (in terms of collection rather than actual production); there is no reason to fear a supply tightness. But due to reduced buying in West Africa during the 2012 season, lot of RCN is in the wrong place. Conversion into kernels in the last quarter of 2012 is likely to be less than normal. If kernel activity picks up, processing in first quarter of 2013 may be higher than normal.

Demand outlook continues to be hazy – especially in USA and EU. Continued economic uncertainty makes it difficult to forecast or project offtake in coming months. Everybody seems to be content making short term deals. Unless this changes and there is some confidence for future planning, periodic buying in small and short trances is likely to continue.

Although it is difficult to judge how much forward business has been done, trend of short term covering for the last few quarters and relative quietness in the market for last 2-3 months leads us to believe that buying for shipment in last quarter has been lower than normal. This is corroborated by reports that offtake in many markets in last few months has been slow meaning inventories are lasting longer than planned.

If the offtake in the last quarter picks up, it could mean bunching of buying for nearby’s and first half of next year.

There is nothing on the horizon pointing to a major move in prices in the foreseeable future. And that would be good for everyone in the chain as stability in prices would induce confidence in consistent supply. But if the Indian demand picks up in next 4-6 weeks and if that is coupled with buying interest from USA and EU for 2013 shipments, we could see some upward movement in prices before the end of the year. However there is no reason to expect any big jump in prices.

Another point to be kept in mind is that processing costs have gone up significantly in the last 3 years in all countries. This portion of increase in average price is unlikely to go down. So kernel prices can come down significantly only if RCN prices come down.Overall it would be reasonable to expect a steady market in the last quarter moving in the current range with limited downside and some possibility of a price increase if activity picks up in next 4-6 weeks.

Mr Giridhar Prabhu, Achal Cashews Private Limited, MangaloreAn important message that needs to go out to the cashew producing community is: TAKE CARE OF POST HARVEST TREATMENT of raw cashews.

The estimated loss of global value on this account exceeds Rs 700 crores per annum (100 million Euros). This is calculated at 10 percent of the traded value of raw cashews. The marketing potential loss is much higher.

This can be substantiated only when producer trader and manufacturer interests gather to study assess and estimate the losses.

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Cashew marketing is in peril due to quality issues and valuable material is handled badly without information and knowledge about the produce.

Cashew markets in India woke up to the seasonal requirements. There is no extraordinary phenomenon to notice. Demand is routine. There is still no evidence of Industrial demand being aggressive. Passive demand for core consumption is on.

The markets in India generally are lack luster. The bright spot in worked dried fruit markets is almonds. With a reasonably good crop almond prices have jumped nearly 20 pc.

This is both due to physical demand and could be speculative buying

Almond prices are hovering at Rs 440 - 445 per kg range.

Shell prices are warmer with enquiries from millers and liquid is yet to get liquidity.

The next two weeks will reveal the contours of Indian demand.

World enquiries could come in at any time and hopefully the lull will turn into active markets for offered materials.

The Brazilian crop news is now out in the open. Impact could be guess work. There is sufficient material around of dubious quality. Good quality kernels can be anticipated out of Tanzanian and Mozambique supplies.

Mr Rajendra Sabat, Sabat Associate (Cashew Expert/ Consultant), OrissaThe cashew market was not showing any good activity

looking to the market situation and coming up Dasara and Diwali. The processors were eagerly waiting for the Dasara and Diwali in which period the the market is always running with full demand. But unfortunately this year neither the market has good demand not having any good sale.

Looking to the market position the local RCN is not matching with the kernel prices. Local RCN is quoting at Rs 80 per kg.

The current cashew kernel prices in Rs/Kg at OrissaGrades Jeypore Coastal Orissa/PalasaGrades Jeypore Coastal Orissa/PalasaGrades Jeypore Coastal Orissa/PalasaW240 500-510 465-470W240 500-510 465-470W240 500-510 465-470W320 470-475 430-445W320 470-475 430-445W320 470-475 430-445W450 440-445 405-410W450 440-445 405-410W450 440-445 405-410JH 390-395 330-335JH 390-395 330-335JH 390-395 330-335K 350-360 275-285K 350-360 275-285K 350-360 275-285

Mr. Biju P, Agro Trade International, Kerala

Cashew market is very quiet again.

Current prices of cashew kernels at Kollam (USD per lb)

Grades Prices for 09/29/2012

Prices for 10/06/2012

W180 4.75W180 4.75 4.90W210 4.50W210 4.50 4.50W240 3.60W240 3.60 3.60W320 3.28W320 3.28 3.25W450 3.05W450 3.05 3.05SW240 3.25SW240 3.25 3.20SW320 2.98SW320 2.98 2.98Splits 2.50Splits 2.50Splits 2.50Splits 2.50Splits 2.50Splits 2.50 3.00LWP 2.30LWP 2.30 2.50LSP 2.10 2.10

Packing : 1x50 Lbs Flexi Pouch, Shipment : Prompt

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Indian CNSL Market Commentaries

Mr Venkatesh, Kanco Southwest Enterprises, MangaloreThis week CNSL traded at Rs 22.50 per kg in Ex-Mangalore.The price of Cardanol quoted at Rs 52.00 per kg in Ex-Mangalore.

Mr Omprakash N. Phadnis, M/S. N.S. PHAD-NIS, Panruti, Tamil NaduAs anticipated, the market has zoomed up as far as the CNSL is concerned. The rates after touching as low as 17.50 per kg are around Rs. 20.50 per kg

today and the shell market is Rs. 5.80 per kg. Cake is quoted around Rs. 4.25 per kg.

Basic reason is low shelling of raw nuts due to work-ers non availability. Second reason is low out turn from the shells which is said to be around 18-19% only. Some furnace oil adulterators having connec-tion in Chennai lifted over hundred tonnes around Rs. 19.50 per kg and this has pushed the market up. No international demand is seen.

Do not miss the Golden Opportunity to Advertise in www.Cashewinfo.com/Cashew week

Contact Swapna at 09342540609 or mail at [email protected] www.cashewinfo.com

Foretell Business Solutions Pvt Ltd#146, Ramaiah Street, 1st & 2nd Floor , Gopal Towers,Near Anjenaya Tech Park, Old Airport Road, Kodihalli, Bangalore - 560008, IndiaPh: 080 25276152/53, Fax:080 25276154

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Domestic Prices of Nuts

Price Highlights for the weekMangalore market Some improvement has seen in the market with some of the cashew gradesMangalore market Some improvement has seen in the market with some of the cashew grades

Kollam market Increase in W180, W210, W240 and WSP prices where as, other grade prices were steady to low compared to last week

Delhi market Steady to low in cashew kernel prices from last weekSangrur market Kernel prices remained steadySangrur market Kernel prices remained steadyJeypore market Kernel prices moved up from last week pricesJeypore market Kernel prices moved up from last week prices

Vetapalem market W210 and JH prices moved down and other kernel prices moved up from last week prices

Panruti market Kernel prices were steady to highPanruti market Kernel prices were steady to highJalandhar Market No movement in the kernel pricesJalandhar Market No movement in the kernel prices

Cashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekMangalore (Rs/ kg)W180 705 705 0.00S180 661 644 -2.57W210 617 631 2.27S210 560 573 2.32W240 551 556 0.91S240 511 520 1.76W320 503 511 1.59W1 489 498 1.84SW 472 485 2.75SSW 441 441 0.00JH 432 437 1.16S 419 414 -1.19LWP 366 368 0.55SWP 331 326 -1.51

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Cashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekK 379 392 3.43JB 388 397 2.32Kollam (Rs/kg)W180 595 600 0.84W210 529 538 1.70W240 494 498 0.81W320 450 423 -6.00W450 432 397 -8.10SW240 423 397 -6.15SW210 No stock No stockNo stock No stock -S (Splits) 375 362 -3.47SS 309 309 0.00Butts 322 317 -1.55SB (Scorched Butts) 295SB (Scorched Butts) 295 287 -2.71SP 265 265 0.00LWP 322 317 -1.55WSP 273 282 3.30Delhi (Rs/Kg)W320 No. 495 495 0.00W210 No. 660 658 -0.30W240 No. 560 555 -0.89W180 No. 700 700 0.002 pieces 363 355 -2.204 pieces 335 335 0.008 pieces 298 298 0.00Sangrur (Rs/Kg)W320 603 603 0.00W210 663 663 0.00W240 618 618 0.00W180 703 703 0.002 pieces 500 500 0.004 pieces 485 485 0.008 pieces 460 460 0.00



Cashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekJeypore – Orissa (Rs/Kg)Local Raw Nuts 82 85 3.66W210 560 600 7.14W240 520 565 8.65W320 475 500 5.26W400 450 470 4.44S240 500 500 0.00S320 460 470 2.17S 385 400 3.90K 360 385 6.94LWP 350 360 2.86SWP 310 340 9.68JH 400 410 2.50Vetapalem – AP (Rs/Kg)W210 575-600 560-570575-600 560-570 -3.83W240 490-500 500-510490-500 500-510 2.02W320 430-440 440-445430-440 440-445 1.72SW 400 400-410400 400-410 1.25JH 425-435 425-430425-435 425-430 -0.58K/LWP 335-340 335-340335-340 335-340 0.00W1 400 400-410400 400-410 1.25JB/Butts 365 360-370365 360-370 0.00W400 400 400-410400 400-410 1.25Panruti Wholesale Market – Tamil Nadu (Rs/kg)Raw nut (Rs/80kg) 5500Raw nut (Rs/80kg) 5500 5500 0.00W240 450 450 0.00W320 392 397 1.28W450 388 388 0.00JH 350 350 0.00JK 309 309 0.00LWP 282 287 1.77SWP 250 280 12.00

Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25Goa Cashew Book 1.indd 25 10/8/2012 7:09:31 PM10/8/2012 7:09:31 PM


Cashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekCashew Grades 09/29/2012 10/06/2012 % change in price over last weekJalandhar – Punjab (Rs/kg)W320 605 605 0.00W210 635 635 0.00W240 535 535 0.00W180 583 583 0.00

*Mangalore Prices are exclusive of tax. Tax for inter-state sales- CST 3 per cent, Tax for local sales 4 per cent VAT Note: W= White Wholes, S= Splits, SW= Scorched Wholes, SSW= Scorched Wholes Sec-onds, DW= Dessert Wholes, LWP= Large White Pieces, SWP= Small White Pieces, BB= Baby Bits, SB= Scorched Butts, SS= Scorched Splits, SP= Scorched Pieces, 1kg = 2.24lb

Cashew Raw Nuts pricesCountry 09/29/2012 10/06/2012 % change in price over last week09/29/2012 10/06/2012 % change in price over last week09/29/2012 10/06/2012 % change in price over last weekIndian RCN (Rs per 80 kg bag) 6000 to 6250 6000 to 6250Indian RCN (Rs per 80 kg bag) 6000 to 6250 6000 to 6250Indian RCN (Rs per 80 kg bag) 6000 to 6250 6000 to 6250 0.00Ghana (Rs per 80 kg bag) 5000 to 5200 5000 to 5200Ghana (Rs per 80 kg bag) 5000 to 5200 5000 to 5200Ghana (Rs per 80 kg bag) 5000 to 5200 5000 to 5200 0.00Benin (Rs per 80 kg bag) 5000 to 5200 5000 to 5200Benin (Rs per 80 kg bag) 5000 to 5200 5000 to 5200Benin (Rs per 80 kg bag) 5000 to 5200 5000 to 5200 0.00

Other nuts prices at Delhi market (Rs/kg)Grades 09/29/2012 10/06/2012 % change in price over last week09/29/2012 10/06/2012 % change in price over last week09/29/2012 10/06/2012 % change in price over last weekAlmond Girdhi New 84 84 0.00Almond Gurbandhi New 200 200 0.00Almond California 308 308 0.00Almond Kernel California 436 441 1.15Almond Kernel Gurbandi 375 375 0.00Pistachio Irani 850 850 0.00Pistachio Hairati 820 830 1.22Pistachio Peshawari 1060 10401060 1040 -1.89Walnut New 185 185 0.00Walnut Kernel 650 650 0.00



International Cashew Market

Price HighlightsPrices for 10/06/2012 Market SourceMarket Source

W240 USD 3.60 to 3.65 per lb FOBW240 USD 3.60 to 3.65 per lb FOB Vietnam Mr Kim, VietnamVietnam Mr Kim, VietnamW320 USD 3.20 to 3.25 per lb FOBW320 USD 3.20 to 3.25 per lb FOB Vietnam Mr Kim, VietnamVietnam Mr Kim, Vietnam

Commentaries by Experts

Mr Kim, Khiem Nguyen Co., VietnamThe week was totally quiet without any demand/trades from buyers’ sides but prices offered were not changed i.e. W320 at USD 3.20 to 3.25, W240 at USD 3.60 to 3.65 per lb fob for October and No-vember shipments. Very limited sales reportedly done at USD 3.19 per lb fob for Prompt. Reliable sellers offered W240 at USD 3.65, W320 at USD 3.25, WS at USD 2.10 to 2.15 per lb fob for October - December shipments but no business done at the said levels.

There might be some minor demands but too weak and prices lured were lower compared to the levels desired by sellers. The limited and seldom demand during the past week could not temporally drag the kernels market to its firmer status like before. But there is still strong feeling that there are some de-mands in the coming time as buyers will have to need something at least in preparation for their on-

coming holidays. It is however, the time for this is not long enough so demand may be weak compared to previous years so chances for the prices to be strongly waken up is limited.

China market was quiet with weak prices offered to this market. Brokens demand from this was also quiet.

FOB prices of cashew grades that sold last week for October 2012

GradesPrice USD per

lbs (09/29/2012)

Price USD per

lbs (10/06/2012)

W240 3.60 to 3.65 3.60 to 3.65W240 3.60 to 3.65 3.60 to 3.65W240 3.60 to 3.65 3.60 to 3.65W320 3.20 to 3.25 3.20 to 3.25W320 3.20 to 3.25 3.20 to 3.25W320 3.20 to 3.25 3.20 to 3.25W450 3.10 3.10LBW320 3.10LBW320 3.10 3.10WS 2.10 2.10WB 2.10 2.10DW 2.30 2.30LP 1.60 to 1.65 1.60 to 1.65LP 1.60 to 1.65 1.60 to 1.65LP 1.60 to 1.65 1.60 to 1.65



Mr Jim Fitzpatrick, Ingredient Sourcing SolutionsMore trade in the past week but still way below what would have been considered “normal” vol-umes a couple of years ago. The market has been in a relatively quiet pattern since this time last year bar the over reaction in April and May. This has led to some frustrations for processors and others but has led to certain price stability for the past three months. This is not yet enough to encourage a re-turn to far forward purchasing on the part of buyers but does at least help to build some level of confi-dence that cashews are an item that will eventually become more easily judged and therefore promoted at retail level.

The quiet demand pattern is not unique to cashews as a number of tree nuts and especially peanuts are returning from volatile times to a more normal pat-tern What is unique to cashews is the wide differ-ences in price between processors which makes it difficult for buyers to determine exactly where the market is at a given time and often to unfair com-parisons between justifiably higher priced, reliable processors and their less reliable competitors. Given

that the cashew kernel trader is, if not extinct then at least an endangered species, the ability of less fre-quently involved buyers to identify reliable proces-sors is in question causing continued conflict and damaging the reputation of the industry. Perhaps it is time for some generic marketing approach on the part of the fledgling World Cashew body to address this and other problems.

Short term there is little in the way of market mov-ing news to be expected. The general expectations for crops are well known. There is a stock of RCN in West Africa slowly making its way to be processed although much of it may never make it and will un-dergo a miraculous rebirth as 2013 crop next March. Demand is lacking energy and the lethargic pattern is likely to continue especially in the North Ameri-can and European markets as buying season 2012 ends. Price movements are likely to be a function of local factors and financial pressures indicating that when good reliable processors want to sell toward the bottom of the current range cashews should be bought.



RCN Quality in Côte d’Ivoire

Mr. Pierre RiCAU – N’Kalo Services - RONGEAD

Côte d’Ivoire is the second cashew producer in the world with around 420 000 Metric Tonnes in 2012. It is also currentlythe country where cashew production is growing the fastest in Africa.

Most of the Ivoirian cashew acreage has been planted between 1995 and 2002, and our expectations are that production in Côte d’Ivoire will reach his peak around 2020 with a production between 500 000 and 550 000 metric tonnes.

In 2012, Côte d’Ivoire will be the 4th country for cashew processing with more than 20 000 MT of RCN processed locally, but still around 90 % of the production is exported to India, Vietnam and Brazil as Raw Cashew. Even if it is expected that local processing will grow in the coming years, Côte d’Ivoire will still mainly be a raw cashew supplier for the coming 10 years.

Each year, RCN importers complain about the bad quality of Ivorian cashew. Yet, when you compare farm gate quality, the Ivorian cashew is not very different from Beninese or Bissau Guinean cashew nut. Averages KOR at the farm gate are between 48 and 51 lbs depending of Ivorian regions, and Nut Count is generally around 190 nuts / kg in the whole country. But when Ivorian cashew reaches Asian factories, yields often fall to 42 to 46 lbs per bag.

Where and when happened this big decrease? The decrease happens mostly during the cashew storage and transport and mostly because cashew trading come late after the harvest.

There is no “payment for quality” at the farm gate level as local traders mainly try to get big volumes as soon as possible. So farmers find no interest to dry the

cashew after the harvest. Most of the time, cashew will be stocks several weeks in plastic bags and is dried only when it reaches the port and exporter’s facilities.

Cashew harvest normally begins during the second half of February. Most of the cashew is harvested in March and April. Generally, the “short rainy season” also called “season of mangoes rains” lasts all April Month. That is why, from April, humidity rate grows in cashew stocks and quality begins to decrease. More the storage is long; worst is the quality, as it can be seen in the chart below.

Another problem is that for exporters it is not always interesting to spend time and money to get better quality product as many RCN importers never pay premium for good quality and often do not pay last part of the contract arguing of bad quality even if the quality was good. On this point, it seems to be really important to get an arbitrage authority and common quality control standards between India, Côte d’Ivoire and eventually Vietnam to get a real valuation of quality.

Ivorian government has amongst his priority to improve cashew average quality but it is really necessary that good quality bring value until the farm gate level to get a big change.



Currency Movements

Forex Rates (In USD)Currency 09/28/2012 10/05/2012Currency 09/28/2012 10/05/2012Currency 09/28/2012 10/05/2012Indian Rupee 52.855 51.916Indian Rupee 52.855 51.916Indian Rupee 52.855 51.916Euro 0.778 0.7670.778 0.767Japanese Yen 77.930 78.660Japanese Yen 77.930 78.660Japanese Yen 77.930 78.660Brazilian Real 2.026 2.032Brazilian Real 2.026 2.032Brazilian Real 2.026 2.032Chinese Yuan 6.286 6.324Chinese Yuan 6.286 6.324Chinese Yuan 6.286 6.324Singapore Dollar 1.228 1.229Singapore Dollar 1.228 1.229Singapore Dollar 1.228 1.229Tanzanian Shilling 1574.550 1575.750Tanzanian Shilling 1574.550 1575.750Tanzanian Shilling 1574.550 1575.750Thai Baht 30.834 30.62030.834 30.620Mozambique New Metical 28.500 28.50028.500 28.500

Vietnam Dong 20850.000 20890.000Vietnam Dong 20850.000 20890.000Vietnam Dong 20850.000 20890.000Indonesian Rupiah 9569.100 9589.000Indonesian Rupiah 9569.100 9589.000Indonesian Rupiah 9569.100 9589.000Benin CFA Franc BCEAOBCEAO 507.790 504.200507.790 504.200Ghanaian New Ghanaian New Cedi Cedi 1.897 1.8991.897 1.899

Comparative Movement of Currencies vis-à-Vis USD in cashew Processing Regions (Weeks Starts from January’2012)

(Note: Prices Indexed to the first week prices as-sumed to be 100)

from January’2012)

USD vs. BRL Movement

In recent time Brazil trade account improved as shown in above chart from Aug’12 low of 805.86million dollar. The recent weakness in Real which is currently around 2.06v/s dollar was mainly because of improvement of Brazil export sector. However still the current account balance is deficit as shown in above chart but shows some signs of improvement. So Improving Brazilian trade and current account balance to keep Brazilian Real weak.



The Brazilian real closed weaker to the dollar Friday after the country’s central bank sold reverse-swap contracts to deter the currency appreciation. The real exited active trading at BRL2.0293 to the U.S. dollar, according to Tullett Prebon via FactSet, after Thursday closing price at BRL2.0167. The Brazilian central bank sold the equivalent to $1.29 billion in reverse swap contracts Friday. Such auctions give the investors a chance to exchange dollar-linked bonds for paper indexed to domestic interest rates. They tend to support the dollar against the real by removing dollar-hedged contracts from the market. Intervention by Brazil’s central bank and declarations from government officials aiming to protect local exporters have kept the real in a tight trading range between BRL2.00 and BRL2.05 in recent months.Technically Brazil currency poised to extend uncertain movement in broad range of 2-1.998level. Overall, central bank intervention and improvement of Trade and current account deficit Brazil Real likely to keep Real lower around 2 against US dollar.

USD vs. VND MovementVietnam’s government bonds fell, pushing the five-year yield to the highest level since May, after

the State Treasury sold more debt. The dong was steady.

The government on Oct. 5 auctioned 500 billion dong ($23.9 million) of three-year notes and 850 billion dong of two-year bonds at 9.9 percent and 9.7 percent, respectively, according to Hanoi Stock Exchange. The yields were 10 basis points higher than at a sale of similar-maturity securities on Sept. 27.

The yield on the five-year notes rose eight basis points, or 0.08 percentage point, to 10.23 percent, according to a daily fixing from banks compiled by Bloomberg.

The dong traded at 20,890 per dollar as of 3:16 p.m. in Hanoi, unchanged from the end of last week, according to data compiled by Bloomberg. The State Bank of Vietnam set the currency’s reference rate at 20,828, unchanged since Dec. 26, according to its website. The dong is allowed to trade as much as 1 percent on either side of the rate.

Technically Vietnam dong likely to remain in range of 21000-20000 level.



Indian Rupee – Revival of Good Times

Debajit Saha, Content Editor, Bullion Bulletin

Indian Rupee finally got out of stage of ‘nemesis’. It had lost long ago good days of a strong currency with economic downturn all over the world and un-avoidable (or at times avoidable) macro-economic factors of domestic economy. Lack of economic reforms under colalition political pressure kept the central government out of path of reforms which otherwise could have saved the currency from its rapid downfall against US dollar. Neverthless, all’s well that ends well. Central Government finally has taken series of bold steps which revitalizes the eco-nomic environment. ‘Protectionist’ thus turns into ‘saviour’. Rupee performed best amongst all Asian currencies last quarter and most importatantly, last two weeks.

Now the important question is it a reaction rally or rupee will continue to strengthen against dollar. We would focus on this in next paragraphs.

Macro Economic Syndrome“Advocates of Keynesian economics argue that pri-vate sector decisions sometimes lead to inefficient macroeconomic outcomes which require active pol-icy responses by the public sector, particularly mon-etary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle. The term business cycle (or economic cycle) refers to economy-wide fluctua-tions in production or economic activity over sever-al months or years. These fluctuations occur around

a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom), and pe-riods of relative stagnation or decline.” )Wikipaedia

The above theory is perfectly suited for emerging economies’ growth story. (It is necessary to focus on global parameters as India is exposed to global economic vulnerability same way other emerging economies are. China has grown only at the rate of little above 9% last year from whopping 12-13% in previous years. So current economic downturn in India is not the inefficiency of our economy but combination of both micro and macro economic fundamentals). We have grown at a brisk pace above 7.5% on an average till 2011. The economic reforms that were first undertaken way back in 1992 by the then Finance Minister and today’s Prime Minister of the country Dr. Manmohan Singh and subse-quent reforms that were carried on later by various governments pushed India to become world’s sec-ond fastest growing economy. But this growth was halted on theory of cyclical economic downturn (as inidcated above) in line with other emerging as well as developed economies. The condition of “ineffi-cient macroeconomic outcome”, for example, can be justified in form of India’s high Current Account Deficit (CAD) or lets say, high ‘inflation’. India’s dependency on foreign market to source ‘crude oil’ and people’s inclination to buy ‘gold’, which In-dia imports 100% basis, coupled with low export



growth resulted in high CAD. On the other hand, rapid growth or expansion of private sectors created high inflation. Central bank was forced to under-take tight monetary measures last year which is still continuing to counter this menace of inflation. This created huge liquidity shortage in financial market. Lack of fiscal reforms created void in the economy resulting in slow employment and infrastructure growth. The intervention of central governmet on fiscal front was a necessity. With the current reform announcements like allowing FDI in retail, aviation and insurance sectors along with curtailing sub-sidies in LPGs and hike in diesel prices in place, central bank may ponder over to losen the monetary

policy in near future now as central bank was con-strantly stating that unless something coming from fiscal front, monetary policy can not be losened as inflation is still above the accepted level of 5-6%. Combinedly, all put enormous pressure on Rupee. Europe’s debt crisis also created additional demand for US dollar which indirectly impacted other cur-rencies as well. With ECB’s declaration of buying unlimited debts and Fed’s QE3 programme, some relief can be expected from global front. So, we could see much sronger currency in coming days. But, to see level of 45-46 against dollar, well, we have to wait longer period of time, perhaps.

Net FII Flows till September 2012 in Asian Countries (in $billion)India Phillipines South Korea Taiwan Thailan VietnamIndia Phillipines South Korea Taiwan Thailan VietnamIndia Phillipines South Korea Taiwan Thailan VietnamIndia Phillipines South Korea Taiwan Thailan VietnamIndia Phillipines South Korea Taiwan Thailan VietnamIndia Phillipines South Korea Taiwan Thailan Vietnam

FII Flow 13.19 2.18FII Flow 13.19 2.18FII Flow 13.19 2.18 12.81 1.54 2.15 0.1812.81 1.54 2.15 0.1812.81 1.54 2.15 0.1812.81 1.54 2.15 0.18

The above table is just indicative that global inves-tors have not left India, rather placed better than its peers in Asia. Market is expecting more inflows into the country after the current reform measures. On the other hand, oil price in international market has come down substantially and possibily it would remain in comparatively lower level than last year for next quarter or two possibly keeping better than last year’s political unrest in Middle East and Africa and adequate global supply in mind. So, India’s oil bill might have improved in next couple of quar-ters which may ease substantial pressure on CAD. Government’s continuous efforts to bring down the imports of gold is so far successful. But, taking the deficits below 3 percent of GDP from last year’s 4.2 of GDP, it will take substantial time.

Technicals:-The chart is showing rupee is at 6 month’s high and getting resistance at 50 week EMA. MACD is showing negative divergence at a time when the currency has broken the resistance of 54.30 deci-sively. Combined, one can expect that rupee would continue to strenthen till 49 against US dollar. All it needs two consecutive weekly close below 50 week EMA level. Keep the fingers crossed!


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Untitled-1 1 10/8/2012 6:19:11 PM Vengurla-7 and Balli-2 variety. The average yield is about 600-700...

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Transcript of Untitled-1 1 10/8/2012 6:19:11 PM Vengurla-7 and Balli-2 variety. The average yield is about 600-700...