Market Insider

EDIBLE NUTS

CASHEWS

Third quarter 2015

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Foreword

Cashew production and trade figures may change considerably from one reporting period to another. The reason is that production and trade data provided at the beginning of campaigns are estimations and projections that can only be confirmed by the end of the season, or the following year. In addition, production, consumption and trade of raw cashews and cashew kernels are difficult to estimate, in particular when the products are consumed locally; producers and traders do not always report on volumes, raw nuts are smuggled to neighbouring countries, and reporting of statistical data is many times delayed or unreliable. Moreover, figures provided by official and business sources are often mismatching. Consequently, they are regularly revised and updated. The largest producers of raw cashews are located in the Northern hemisphere. They cover around 80% of the global cashew production (82% this season). Cashew harvesting and marketing campaigns in the Northern hemisphere are generally closed by end June. Processors and traders are further waiting for the arrival of the crop from the Southern hemisphere, which reaches the market between September and December. Therefore, the bulk of world annual cashew production and export supply availabilities is concentrated during the first half of the year. The second and third cashew quarterly bulletins are therefore reporting on the key periods covering the major annual developments in the cashew market.

Hemisphere, country

2015/16* output ,

1000 tons Jan Feb Mar. April May June July Aug Sep Oct Nov Dec

No

rth

ern

he

mis

ph

ere

India 550

Côte d'Ivoire 620

Vietnam 450

Guinea Bissau 190

Nigeria 150

Benin 125

Cambodia 60

Ghana 95

Senegal 50

Burkina Faso 80

Gambia 10

Mali 40

Togo 30

Guinea 40

So

uth

he

mis

ph

. Brazil 220

Tanzania 170

Indonesia 30

Mozambique 85

Kenya 30

Harvesting season, with possible variations of several weeks depending on weather conditions

Peak harvest period Source: ITC

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Building awareness and assisting developing countries with access to trade and market information has been at the heart of the International Trade Centre (ITC) work. The Market Insider is a newly branded global public goods service built on a "blog" interface to provide just-in-time content on market prices and industry developments focusing on forward-looking intelligence in anticipation of market opportunities, market dynamics, quality issues, trade events and sector-specific intelligence on commodities of interest to developing countries. No part of these reports may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the MI/ITC Geneva. Market Insider information is available free of charge to trade support institutions, enterprises and research institutions in developing and developed countries. Please log on to: http://www.intracen.org/itc/market-insider

@ITCMktInsider Copyright © Market Insider/ITC 2015. All rights reserved

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Contents

Foreword iii

1. El-Niño developments 1

2. Crop situation, processing, trade and sectorial developments 2

2.1. Southern hemisphere 2

2.1.1. Tanzania 2

2.1.2. Kenya 4

2.1.3. Mozambique 5

2.1.4. Brazil 7

2.2. Northern hemisphere 9

2.2.1. Plantation work and crop developments 9

2.3. Processing and sector developments 10

3. Prices 21

3.1. Raw cashews 21

3.2. Cashew kernels 23

4. Currency outlook 25

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1

1. El-Niño developments

The El Nino event which is active since February is foreseen to almost certainly last until the end of the year, and possibly up to spring or early summer 2016. Its intensity is increasing, with a peak expected in the last quarter of 2015. Potentially this El Niño could rank among the top three strongest episodes ever.

The climatic changes produced affect already the cashew crops development in the Southern hemisphere:

In East Africa, the most important impact period is expected to take place be from October to December, enhancing the “short rains” season (the “long rains” period is usually lasting from March to May and it is much less El Niño - sensitive).

The Tanzania Meteorological Agency announced by mid-September that above normal, heavy rains should fall from mid-October to December in the northern parts of the country and in Pemba and Unguja Islands. In areas with a single rainfall season, the rains are expected to last from October to end November.

The Kenya Meteorological Department of the Ministry of Agriculture, National Resources and Regional Authorities warned that enhanced rainfall caused by El Niño may occur during the short rains period over cashew-growing counties of the former Coast Province (Kilifi, Kwale, Lamu) and Eastern Kenya counties (Tharaka). The onset is expected during the first to second week of October and cessation during the fourth week of December. Farmers were made aware of potential outbursts of cashew powdery mildew disease during this period (the disease became endemic in Lamu, Kilifi and Kwale districts);

In Mozambique, El Niño is associated with drought during what is normally the wettest period of the year, from January to March. This year Mozambique is facing a very strong El Niño spell. Large floods provoked by El Niño occurred in January. The 2015/16 seasonal forecast released by the National Institute of Meteorology (INAM) indicates that from October to December 2015, the bulk of the country - with the exception northern parts, stands increased chances of receiving near-normal to below-normal rainfall. According to the INAM forecast, the northern parts of the country (Cabo Delgado, Niassa, Nampula and Zambézia provinces) are expecting near- to above-normal rains during this period. During cashew harvest period which occurs from October to February/March, there are increased chances for the occurrence of near- to above-normal rainfall in northern of the country, while in south and central Mozambique there are increased chances that the rainfall received will be near- to below-normal;

In Southern Africa, including South Africa and the southern half of Mozambique, the period December to February should be dryer than normal. Several areas of South Africa are very dry already, after a failed monsoon last year; Free State and North West provinces have already been declared drought disaster since mid-September;

Rainfall in Indonesia was well below average. In September, six Indonesian provinces declared a state of draught emergency. The El Niño-related dry conditions have set the stage for devastating forest fires;

In Brazil, the Central and North-eastern States recorded draughts and very high temperatures since June, with 940 cities declared in an emergency situation because of drought. In the Southern States, storms and heavy rains have taken a toll with over 30 cities having enacted emergency and public calamity situations. The country is likely to experience a moderate El Nino until February/March 2016. The states of North and Northeast (Ceará, Pará, Piauí) should witness a severe reduction of up to 50% in the volume of rainfall during the entire December through February period. In the Southeast, drought can begin in December and stretch until February 2016, mainly in the south of Minas Gerais and São Paulo.

Sources:

http://dailynews.co.tz/index.php/home-news/42049-tma-confirms-el-nino-threat

http://documents.wfp.org/stellent/groups/public/documents/ena/wfp276236.pdf

http://www.meteo.go.ke/ranet/Wx/seasonal.pdf

http://www.cpc.ncep.noaa.gov

http://www.bloomberg.com/news/articles/2015-09-10/south-africa-declares-drought-disaster-in-no-1-corn-province

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http://www.aljazeera.com/news/2015/09/indonesia-crop-failure-blamed-el-nino-150921062759431.html

http://www.indonesia-investments.com/news/news-columns/crude-palm-oil-cpo-update-indonesia-el-nino-to-impact-on-production/item5901

http://documents.wfp.org/stellent/groups/public/documents/ena/wfp276236.pdf

http://g1.globo.com/bom-dia-brasil/noticia/2015/09/fenomeno-el-nino-deve-ser-um-dos-mais-fortes-das-ultimas-decadas.html http://www.ibtimes.com/el-nino-africa-2015-weather-phenomenon-may-devastate-east-african-farmers-herders-2079855

https://climate.ncsu.edu/climate/patterns/ENSO.html

2. Crop situation, processing, trade and sectorial developments

2.1. Southern hemisphere

In the Southern hemisphere, cashew trees are in the critical vegetative (flushing of new leaves) and panicle setting/flowering stages. Flowering occurs normally following the growth flush at the end of the wet season and its timing and duration are strongly influenced by temperature. In Mozambique for instance, in normal conditions the new leaves appear in June/July, panicles emerge from July onwards, and flowering occurs in October. In Brazil, flowering occurs from August to September.

Flowering and fruiting stages, outbreaks of insect pests and diseases, yields and quality of cashew nuts and kernels, are all vulnerable to climatic disruptions. Prolonged dry spells, as well as unseasonal and heavy rains and heavy dews during panicle setting/flowering and fruit setting periods reduce significantly yields and lower the quality of raw nuts.

2.1.1. Tanzania

The country recorded significant yield improvements, reportedly nearing 1.5 tons/ha raw cashews in new plantations.

Cashew harvesting was on-going by end-September and the marketing season already begun.

Updating on Tanzania Agricultural Development Bank and the Tanzania Commodity Exchange

On August 7th, the Tanzanian President launched the Tanzania Agricultural Development Bank, established in order to fulfil the goals outlined in the Tanzania Vision 2025. The institution will be capitalised by the government for eight years, with 48 million US$/year.

The new Bank should concentrate on supporting farmers financially, while the government-owned TIB Development Bank (formerly Tanzania Investment Bank) should focus on loans for investors in the agro-processing sector. The financing schemes should support the increased use of machinery and irrigation schemes and contribute to higher productivity, concentrating in priority on produce best suited to small and medium scale enterprises dealing in maize, rice, fruit, sesame, sugarcane indigenous chicken, horticulture, livestock, fish farming and bee keeping.

The launching of the new bank coincided with the on-going plans for establishing the Commodity Exchange that will provide farmers with reliable markets for their crops and improve agricultural value chains. A legal framework governing trading in the commodity market is now in place, after the bill for Commodity Exchange Act 2015 approved in Parliament was given assent by the President at the beginning of August.

Preparations for the start-up of Exchange operations are in top gear and the supportive infrastructure is already in place, including the Warehouse Receipt System and the supporting licensing law, interbank payment and Dar es Salaam Stock Exchange setting.

The Tanzania Commodity Exchange is foreseen to open by the end of 2015, on the back of developments in information and communication technology, banking and financial services, infrastructure development and incorporation of Warehouse Receipt System for selected agricultural produce. Cashew nuts, coffee,

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cotton and rice will most likely be the first commodities traded. The Exchange will assist farmers by bringing greater transparency and competition to crop prices.

Sources: https://www.pwc.com/us/en/retail-consumer/assets/pwc-global-agribusiness-monthly-september-2015.pdf, http://www.africanfarming.net/crops/agriculture/tanzania-launches-agriculture-development-bank, http://www.africanfarming.net/crops/agriculture/tanzania-launches-agriculture-development-bank, https://youthinagribusiness.wordpress.com/2015/08/08/tanzania-agricultural-development-bank-tadb-launched/

Cashew exports contributed to increasing Tanzanian foreign exchange earnings and the stability of the Shilling in recent months

Foreign exchange earnings from agribusiness have registered substantial growth during the first two quarters of 2015, thanks to the increase in export price and of selected agricultural products. The increased flow of export earnings of agricultural produce is good news to the stability of the Shilling, which experienced a sharp devaluation against the US dollars up to end June, but started appreciating afterwards.

The Bank of Tanzania Monthly Economic Review for July (https://www.bot-tz.org/Publications/MonthlyEconomicReviews/MER%20JULY%202015.pdf) shows that the improvement in export earnings were on account of increases in export value of coffee, cashews and tobacco. The value of cashew nut exports increased significantly because of the rise in export volumes and raw cashew prices.

The launch of the Tanzania Agriculture Development Bank at the beginning of August and the forthcoming start-up of the Commodity Exchange operations should contribute to further boost productivity and export earnings in agriculture.

Sources: http://www.freshplaza.com/article/144698/Tanzania-Rise-in-agricultural-exports,

https://www.bot-tz.org/Publications/MonthlyEconomicReviews/MER%20JULY%202015.pdf, http://allafrica.com/stories/201508210675.html

Start of the 2015 harvesting season. Foreseen decrease of raw cashew output and rise in exports

Cashew harvesting started at the end of September. The season is marked by concerns about crop output following poor rains in major growing areas, caused by El Niño weather conditions. Most local stakeholders estimate that cashew crop may not exceed 120,000 tons this year, which is 38% less than the previous season. Although cashew germination and flowering were very good, the soil moisture stress results in shedding of flowers that could not bear fruits.

The drop in production should be driving demand. Rongead reported cashew quotations at 1,600 to 1,700 US$/ton CFR Asia by end-September for Kernel Outturn Ratios of 54-56 lbs. /bag 80 kg.

From January to September this year, Tanzania exported 178,500 tons of raw cashew nuts valued at 225.2 million US$. According to Tanzania Cashew Nut Board, this is a part of the 195,000 ton collected by farmers through the warehouse receipt system.

Exports increased by 93% in value and nearly 45% in volumes compared to the same period of 2014, while unit export prices rose by 33%, averaging 1,430 US$/ton in September.

Tanzanian cashew exports January to September 2014 and 2015

August 15 Sept. 15 % change

Year ending September % change

2014 2015

Value, million US$ n.d n.d n.d 132.2 255.2 93.1

Volume, 1000 tons n.d n.d n.d 123.3 178.5 44.8

Unit price, US$/ton 1,156.3 1,108.9 - 4.1 1,072.1 1,430.2 33.4

Source: Bank of Tanzania, Monthly Economic Review October 2015

Sources: http://allafrica.com/stories/201502240074.html, https://www.bot-tz.org/Publications/MonthlyEconomicReviews/MER%20OCTOBER%202015.pdf

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Cashew Fund to set up three cashew processing plants

The government has reaffirmed its commitment to end exporting raw cashews after signing the agreement with the Cashew Nut Industry Development Trust Fund to set up three cashew processing factories. The Fund has allocated 2 billion US$ for the construction of each factory in the first phase of the project. The factories will be located in Mangamba area in Mtwara, Tunduru in Ruvuma and Mkuranga in Coast region. Each plant factory will have an installed capacity of 10,000 tons of raw cashews per year.

The Fund is also envisaging building two cashew godowns in cashew growing areas. Construction activities will start in November this year.

Sources: http://www.freshplaza.com/article/139460/Three-new-cashew-processing-plants-for-Tanzania, https://www.delmas.com/static/communication/Attachments/Com-Watch%20-%20Issue%2053%20-%20October%202015.pdf

Tanzanian cashew sector – one of the most regulated in the world

According to a policy brief by Agricultural Non-State Actors Forum (formed in 2006 by members of from the private and civil society organizations working in the agricultural sector), the cashew sector is one of the most regulated in the world, having also the highest export taxation levied on raw cashews: 10% of the FOB value, or 160 US$/ton - whichever is higher. The brief states that this is symptomatic of the deep rooted structural and regulatory issues in the cashew sector.

Source: http://allafrica.com/stories/201511051636.html

2.1.2. Kenya

Harvesting cashew nuts has not yet begun in September. Flowering and some fructification was in progress, but only a few trees bear fruits. Harvesting should start in November and intensify in December.

Lower output expected because of El Niño

El Niño phenomenon has completely changed the local climate this year: regular, heavy rains continue to fall in this period which is normally the dry season (July to October). These rains are expected to significantly reduce yields of cashew trees, the production, and to lower the quality of nuts.

Moreover, many young trees are dying but replanting dynamics seems to be very limited, with the exception of Kilify County where plantings are supported by the Ministry of Agriculture. However, because of the unfavourable climatic conditions this year, cashew farm-gate prices should exceed 50 Kenyan Shillings/kg - a level much higher than in the past. This may motivate more farmers to boost cashew plantation.

Faced with the likely shortages of domestically produced cashews, many Kenyans processors consider purchasing additional cashew supplies from Tanzania; however, high prices currently prevailing may not make their task easy.

For information, FAO estimated the average annual cashew area harvested in Kenya between 2007 and 2013 at 31,106 ha. The sharp increase in yields, which more than doubled over the 7 years period 2007 to 2013 (from 405 kg/ha to 967.7 kg/ha), determined the doubling of cashew output from 13,520 tons in 2007, to 30,000 tons in 2013.

Year Area harvested, ha Yield, kg/ha Production, tons

2013 31,000 967.7 30,000

2012 30,805 942.3 29,026

2011 30,455 687.1 20,927

2010 29,837 588.8 17,568

2009 30,297 583.7 17,683

2008 32,000 531.3 17,000

2007 33,347 405.4 13,520

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Sources: http://nkalo.com/blog/anacarde, http://www.factfish.com/statistic-country/kenya/cashew%20nuts%2C%20production%20quantity

Kilifi government demands the revival of the dormant Kenya Cashew Nuts Ltd company

The county Government of Kilifi is set to revive the defunct Kilifi District Cooperative Union, which led to the collapse of Kilifi Cashew Nuts Company.

The new Kilifi District Cooperative Union will be re-branded as Kilifi County Cooperative Union. On June 25th, the Kilifi government urged the State to buy and revive the dormant cashew processing factory auctioned in the 1990s, following a national government order for a compulsory acquisition.

The NGO Self Help Africa has already started the organisation of cashew production by providing early maturing seedlings to farmers and the pruning of old orchards.

Sources: http://allafrica.com/stories/201507031709.html, https://citizentv.co.ke/news/kilifi-county-to-revive-cashew-nut-industry-92840

2.1.3. Mozambique

El Niño is causing an unusually long rainy season which delays the start of cashew harvesting. By end September the majority of cashew trees were in bloom. The harvesting and marketing campaigns should start during the second half of November.

Mozambique plans to raise raw cashews production and processing

Cashew nuts and fruits are the basis of livelihood and income generation of some 1.4 million households across Mozambique. About 57% of cashew nuts are produced in the northern region, 24% in the central region and 19% in the south.

peaking to reporters during a conference on cashew organized by the African Cashew Alliance, the INCAJU Director stated that 80,000 tons of cashews have been officially marketed in the 2014/15 campaign, in addition to the non-quantified quantities sold, processed and consumed in the informal sector. Raw cashew production is targeted at about 100,000 tons for the current 2015/2016 season, exceeding by 25% the output of the previous campaign. To achieve the target, INCAJU would spray more than 4 million cashew trees and distribute over 3.3 million seedlings across the country.

The country is operating 20 processing plants, most of them located in the northern provinces of Nampula and Cabo Delgado, and employing around 11,000 workers. About 25,000 tonnes of raw cashews were processed in 2014 – which is less than a third of the domestic output, despite having currently an installed capacity of 45,000 tons. Cashew processors target transforming 41,500 tons of raw nuts by the end of this year, a 66% increase compared to the last year.

Sources:

http://www.clubofmozambique.com/solutions1/sectionnews.php?secao=business&id=2147489739&tipo=one http://www.clubofmozambique.com/solutions1/sectionnews.php?secao=business&id=2147491840&tipo=one

https://www.agra-net.com/agra/foodnews/dfn/nuts/cashews/expansion-of-mozambican-cashew-production-496618.htm

http://spicemarketnews.com/2015/11/mozambique-firm-eyes-41000-tons-processed-cashew-output

Expansion of cashew orchards in Manica Province

The country’s western Manica district holds 1.5 million productive cashew trees. This season, investments in the expansion of orchards comprised planting of other 200,000 seedlings.

Source: https://www.agra-net.com/agra/foodnews/dfn/nuts/cashews/expansion-of-mozambican-cashew-production-496618.htm

New cashew processing plant in Napula province

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The cattle ranching company Beira Boi Limitada diversified in cashew cultivation about three years ago, when it set up an initial plantation of 30 hectares. The area planted has been further expanded to 120 hectares growing 18,000 cashew trees. The cashew trees planted are already bearing fruit. The final goal of the company is to operate a plantation of 500 hectares, which could supply raw cashews to a processing plant to be eventually installed in Nhamatanda district of Sofala province in 2017.

The feasibility studies for the setup of the new processing plant are in an advanced phase; the plant should produce cashew kernels and cashew shell oil. The project counts on financing from the central government and cooperation partners.

Sources: http://www.macauhub.com.mo/en/2015/08/24/mozambican-factory-to-extract-cashew-shell-oil/, http://www.macauhub.com.mo/en/2015/08/25/mozambican-company-plans-to-build-cashew-processing-unit/, farmlandgrab.org, https://www.agra-net.com/agra/foodnews/dfn/nuts/cashews/mozambique-falling-short-on-cashew-processing-capacity-492502.htm

The new Chokwe Agro-Industrial Complex is facing financial problems

The Chokwe Agro-Industrial Complex setup in Chokwe town for processing grains, vegetables and cashews produced in the Limpopo Valley was inaugurated by mid-April this year.

The complex was built with a loan of 60 million US$ extended by Exim Bank of China to government's Institute for the Management of State Holdings (70% of shares). Other stakeholders are the public irrigation company Hidraulica do Chokwe (20%) and the private Limpopo Valley Agricultural company (10%). It can process annually 60,000 tons of rice; 27,000 tons of maize; 1,200 tons of tomatoes and 450 tons of raw cashews. In addition, it has an installed storage capacity of 30,000 tons of produce, being thus capable of mitigating the problem of post-harvest losses.

At the beginning of August, the Complex was still battling with lack of funds to maintain its operations. Supposed to buy grains from producers with payments be made within fifteen days after delivery, the Complex could only purchase small quantities due to lack of funds, being thus forced to operate well below capacity.

The government is fully aware of the financial problems faced by the Complex and states that everything is being made to solve them.

Sources: http://allafrica.com/stories/201504150041.html, https://asokoinsight.com/news/chokwe-agro-industrial-complex-struggling-with-financial-problems-mozambique/, http://www.clubofmozambique.com/solutions1/sectionnews.php?secao=business&id=2147488329&tipo=one

Mozambique and Guinea-Bissau envisage cooperating

Mozambique and Guinea-Bissau plan to cooperate in the cashew sector. The Mozambican daily newspaper Notícias reported that Guinea Bissau is seeking information about Mozambique’s experience in cashew production and mechanised processing and that representatives of the two countries have initiated contacts in this respect.

Source: http://www.macauhub.com.mo/en/2015/09/24/mozambique-and-guinea-bissau-want-to-cooperate-in-the-cashew-sector/

The 9th International Cashew Conference: 14 to 24 September 2015, Maputo

The Ninth International Cashew Conference with the theme "Creating sustainable patterns of production and competitiveness of cashews" was also held in Maputo from 14 to 24 September 2015. The Conference organised under the auspices of the African Cashew Alliance in partnership with the Institute for the Promotion of Cashews (INCAJU) and the Cashew Industries Association (AICAJU) constituted a major world platform to exchange information and create interactions between the cashew industry stakeholders worldwide.

The 9th annual African Cashew Alliance World Cashew Festival & Expo was also organised in the frame of the event (19 to 21 September), under the theme "For value addition to cashews and the creation of business opportunities." The African Cashew Alliance World Cashew Festivals & Expos are the largest

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events devoted to the African cashew industry, allowing the meeting of all stakeholders within the value chain including international buyers, processors, traders, and producers.

Presentations and discussions during the plenary sessions brought to the forefront some of the most pressing issues encountered within the industry and on the African continent including access to finance, raw material procurement and pricing, the development of a competitive processing industry, and policy advocacy to boost sustainable cashew marketing. Business-to business meetings were organised in order to establish connections and partnerships between participants. During the last day, field visits were organized in a processing plant of cashew and the Cashew Research Center in Nampula.

Source: http://allafrica.com/stories/201510010118.html, http://www.africancashewalliance.com/sites/default/files/aca_2015_program_en.pdf

2.1.4. Brazil

Areas harvested, yields, outputs and producer prices

Brazilian cashew output increased by 156% over the 2012 to 2015 period, although the areas harvested decreased steadily by 20%. The main reason was the spectacular increase in average yields which trebled during the period, as a combined result of the increase in producer prices, the improved organisation of the sector and investments made in cashew plantation management and productivity.

Source: ITC based on CONAB data

In its latest Systematic Survey of Agricultural Production of October 2015, the Brazilian Institute of Geography and Statistics (IBGE) estimated the raw cashew harvested areas, average yields and production in 2014/15 and 2015/16 seasons. Despite the decrease in the surfaces harvested in 2015/16 (6% less than the previous season) season, the raw cashew output is expected to rise by nearly 81% following the increase in yield by 91%.

Raw cashew 2014/15 2015/16 % change 2015/2014

Harvested area, ha 627.137 589.930 -5,9

Average yield, kg/ha 172 330 + 91.9

Production, tons 107.868 194.677 + 80.5

Source:

Instituto Brasileiro de Geografia e Estatística – IBGE, Systematic Survey of Agricultural Production, October 2015 http://www.sidra.ibge.gov.br/bda/prevsaf/default.asp?t=1&z=t&o=26&u1=1&u2=1&u3=1&u4=1

2012 2013 2014 2015

Area harvested, ha 750,970 689,760 627,137 589,930

Production, tons 76,054 106,398 107,868 194,677

Yield, kg/ha 101 154 172 330

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Brazil: Cashew areas harvested, productions and average yields, 2012 to 2015

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N.B. Production is calculated (harvested area multiplied with yield)

IBGE undertakes monthly estimations of cashew performances; the estimations above are going to be finalised only in January 2016, after the end of the harvesting season.

The following graph illustrates the evolution of the average and minimum producer prices, as well as and of the real export price of W1 320 cashew grade FOB Fortaleza in Real/kg equivalent between 13 January 2013 and 15 September 2015. The sharp increase of all these prices with the exception of the minimum fixed cashew farm prices since end-December 2014 is evident.

Minimum fixed farm price Average farm price Effective export price FOB Fortaleza Producer price W1 320 equivalent FOB Fortaleza

Source: CONAB

The average monthly prices received by producers between 13 January and 15 September 2015 exceeded the fixed minimum price levels during the same period last year by 24.8% in Ceará, 29.4% in Piaui and 80.1% in Rio Grande do Norte.

State

Producer price, Real/kg Export FOB Fortaleza,

US$/lb.

Variation %

Jan-Sep 2015/

Jan-Sep 2014

Monthly average

Jan 13 - Sep 15, 2014

Monthly average

Jan 13 - Sep 15, 2014

Min.

Céara 2,06 2,57 1,70 3,54 24,8

Piaui 1,77 2,29 1,70 - 29,4

Rio Grande do Norte 1,91 3,44 1,70 - 80,1

Source: CONAB “Conjuntura Mensil Castanha de caju período 1-31 September 2015”

Cashew processors are racing to replenish their cashew stocks before a likely new firming of prices.

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Exports

Exports of cashew kernels between 13 January and 15 September 2015 totalled 8,670 tons, 24% lower than during the same period last year (12,119 tons). The major reason is the sustained increase in the dollar rate against the Brazilian real, which pushed up the export prices of cashew kernel in Real, and decreased considerably the price-competitiveness of Brazilian exporters.

2.2. Northern hemisphere

2.2.1. Plantation work and crop developments

The third quarter of the year is the cashew offseason period in the Northern hemisphere.

West Africa

July, August and September are cashew off-season months in West Africa. Almost no trade is recorded; the remaining raw cashew stocks are scarce and their quality is often very poor.

West African farmers are dealing mainly with the up-keeping of plantations (setting fire belts, cleaning, pruning, etc.).

By end-September cashew trees are in various stages of flowering, depending on local climatic conditions. Sowings may start in November and the future harvesting by February 2016.

Yield improvement programs undertaken over the past 5 years in most cashew producing countries started showing results; increases in yield-related outputs should become evident in the coming 5 years.

In Benin, most farmers are doing plantation maintenance work.

In Burkina Faso, 60 to 70% of cashew orchards are cleaned. The trees are in early flowering stage; if the favourable weather conditions continue, production should attain normal levels.

In Côte d’Ivoire, plantation up keeping is in full swing. Cashew trees started flowering. If the rains would decrease or stop by then, they should be in full bloom by mid-December. A good cashew output is still expected, taking into account the rainfall pattern recorded in producing areas.

Cashew farmers and traders started registering for the upcoming campaign; the process will continue until late November.

2012 2013 2014Jan-Sept

2014Jan-Sept.

2015

Total 25,334 20,964 17,023 12,119 8,670

USA 12,334 9,278 6,131 4,840 4,009

Netherlands 4,645 3,429 3,112 2,493 1,254

Others 8,356 8,257 7,780 4,786 3,407

0

5,000

10,000

15,000

20,000

25,000

30,000

Brazilian cashew exports, 2012 - 2015, in tons

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According to the Technical Director of the Cotton and Cashew Council, the new high yielding varieties producing up to 1 tons/ha raw cashews developed by the National Centre for Agronomic Research could be used very soon, enabling farmers to move from a traditional to industrial cashew agriculture.

Source: http://www.agenceecofin.com/agriculture/2108-31569-cote-d-ivoire-improved-cashew-nut-varieties-to-boost-yields-in-the-sector

In Gambia, farmers are also preparing the orchards for the coming campaign. Improved planting material is being used on new plantations and farm nurseries, while farmers are trained to apply Good Agricultural Practices. Delayed rains and harsh weather in the Western and Upper Regions may affect negatively cashew yields and quality.

In Guinea-Bissau, cashew sector needs to be re-structured, as cashew cultivation is destroying forests and leading the country into a situation of cash-crop monoculture. According to the declaration of a forestry engineer who led the sector, the problem is not the cashew cultivation in itself, but the fact that the crop is not cultivated on plantations; there are no cashew orchards, but mostly cashew woods. This explains the very low productivity, averaging 500 kg of nuts per hectare, compared to three to four times higher yields attained in Nigeria or Vietnam.

Source: http://www.macauhub.com.mo/en/2015/11/09/cashew-plantations-in-guinea-bissau-need-to-be-re-organised/

In Nigeria, farmers are setting fire belts. Some cashew trees are at early flowering stages.

In Senegal, cashew farmers are likewise cleaning the plantations and pruning, while the trees are blooming. Planted areas may be increased and sown with improved seedlings; sowing is planned to start in the second half of November.

India

Indian cashew output in 2014/15 fell despite increase in plantation area, and cashew exports declined by 15% compared to the previous season. Experts blame unseasonal rains during fruit setting period for the lower production, which remains well below the demand of the sector.

According to the “Third Advance Estimate of Area and Production of Horticulture Crops 2014/15 - All India” released in September by the Ministry of Agriculture & Farmers Welfare, the total raw cashew production in 2014/15 season decreased by 1.5% compared with 2013/14, although the area harvested increased by 1.8%, mainly because of unfavourable weather conditions.

Indian cashew crop: Area (1’000 ha) and production (1’000 tons)

Source: http://www.agricoop.nic.in/imagedefault/msp_lat.pdf

2.3. Processing and sector developments

West Africa

The season is marked by the negative effect of very high raw cashew prices on processing. In need of higher investments to cover the increased costs of their raw material needs, processors have to cope with the reduced access to very costly bank financing. Competing Vietnamese and Indian processors have easier access to bank credits at lower interest rates in local currencies.

In addition, the processors are disadvantaged by the lack of parity persisting this season between the prices of raw cashews and cashew kernels, which make them reluctant to enter the market. According to a

Cashew plantation crop

2012/13 2013/14 2014/15 % 2014/15 versus

2013/14

Area Prod. Area Prod. Area Prod. Area Prod.

992 753 1011 753 1029 742 1.8 ( - 1.5)

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business advisor of ACA, the current West African cashew processing costs excluding finance average 375 US$/ton in Tanzania, US$400 per ton in Mozambique, US$410 per ton in Nigeria and US$440 per ton in Ghana, compared with 200 US$/ton in Vietnam and 350 US$/ton in India (source: http://www.scribd.com/doc/283781347/Volume-16-Issue-39#scribd).

Almost all processing plants which were able to source raw cashews at affordable prices have already done it and processed the nuts; many of them idled their operations afterwards, being since July/August out of inventories.

Many new processing facilities are being implemented in the West African region; if next season the raw cashew prices are more affordable for processors, the sub-regional kernel outputs could start growing again.

In Benin, few local traders and processors are still purchasing the last Nigerian raw cashew stocks, despite their mediocre quality.

Cashew sector stakeholders are in the process of elaborating a national development strategy which envisages, among others, the setting of cashew procurement networks for local processors and their provision with raw cashews at acceptable prices.

The cashew kernel output of the country is expected to increase in 2016, if the new processing units planned will become operational.

In Burkina Faso, only two processing units out of the 12 existent were partly operational until September.

In Côte d’Ivoire no trading activities are reported; the start of the next marketing season is foreseen by February 2016.

The increase of minimum guaranteed wages will affect the profitability of cashew processing in Côte d’Ivoire

The minimum guaranteed wages (SMIG) of Ivorian private sector workers will soon be upgraded between 5 % and 15% depending on sector, as a result of successful sectorial negotiations between employers and labour unions. A revaluation of the guaranteed minimum agricultural wages (SMAG) by 25% was also recommended and submitted to the Minister for Labour and Social Affairs by mid-September.

Wages have already been raised effectively in several sectors including agriculture in the third quarter of 2015. These increases will directly affect the profitability of labour-intensive cashew processing.

Sources: http://www.koffi.net/koffi/actualite/288478-Salaires-Categoriels-LAccord-sur-la-revalorisation-des-salaires-du-secteur-prive-remis-a-lEtat-ivoirien.htm

http://news.abidjan.net/h/563832.html

http://iciabidjan.com/les-salaires-des-travailleurs-du-secteur-prive-bientot-revalorises-patronat-ivoirien

New processing units and Vietnamese equipment for the setup of Yamoussoukro cashew processing plant

Two new processing plants are planned to be built in Karabiri and Séguélon, according to the communication of the UTEXI-COTIVO Chief Executive Officer made to Agence Ivoirienne de Presse. The two plants with an annual capacity of 5,000 tons/year will create 1,000 jobs in the Ivorian northwest region. Viet Mold Machine Co. Ltd. is negotiating the installation of equipment for the new plant.

Source:

http://www.agenceecofin.com/noix-de-cajou/2810-33461-deux-unites-de-transformation-d-anacarde-seront-implantees-dans-le-nord-ouest-ivoirien

http://vinacas.blogspot.ch/2015_10_01_archive.html

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http://www.agenceecofin.com/noix-de-cajou/0810-32973-viet-mold-machine-installera-une-unite-de-transformation-d-anacarde-a-yamoussoukro

Ivoirian cashew sector organisation

Cashew sector stakeholders are discussing the elaboration of a Roadmap for the implementation of representative, consensual and credible regional Cashew Inter professional Organizations

Source:

http://www.intracen.org/uploadedFiles/intracenorg/Blogs/Cashew_Nuts_-_Main/Gambia%20bulletin%2016%20of%2017%20September%202015.pdf

In Ghana, the Ministry of Food and Agriculture is in the process of establishing an advocacy document on strategies for improving cashew sector performance.

The erratic power supply which has burdened operations of most processing companies should be soon improved, with the expected provision of expanded power supplies announced for November 12th.

In Guinea Bissau, the bumper cashew crop and the exports of 170,000 tons of raw cashews during the short marketing campaign this year (April to September) sustained the economy during the month-long political crisis in August 2015.

The value of cashew exports represents generally 80% of the national export earnings.

The increase in domestic cashew processing may become a reality with the setup of more processing units. An Energy and Industry Ministry source said that more than 40 cashew nut processing units are currently registered in Guinea Bissau, of which only 18 are technically capable of operating.

In order to protect the domestic processing, cashew exporters must by law guarantee that 30% of the product has been previously processed in the country. They must make a cash deposit in the State Treasury amounting to 30% of the amount of cashews to be exported, the sum being returned when the processing unit confirms that the cashews were actually processed.

Sources:

http://www.commodafrica.com/22-09-2015-recolte-exceptionnelle-de-noix-de-cajou-en-2015-en-guinee-bissau

http://af.reuters.com/article/guineaBissauNews/idAFL5N11L31920150915 , http://www.macauhub.com.mo/en/2015/09/01/guinea-bissau-gov%E2%80%99t-aiming-to-enhance-value-of-cashew-nuts

In Nigeria, raw cashew prices remained stable, sustained by the availability of about 500 tons stocked in Lagos, Kogi and Enugu state warehouses and purchases of Benin buyers (mainly White grades) and domestic small-scale processors (good KORs).

Cashew selected as priority strategic export product

Cashew is of particular importance to the Nigerian economy: it is the third largest agricultural foreign exchange earner, with about US$110 million acquired in 2013 – representing about 10% of the total agricultural exports.

Nigeria processes about 50,000 tons/year of raw cashews, exporting kernels to Singapore, India, Vietnam, UAE and Hong Kong. As stated in UNCTAD “Trade Development Report 2015” (http://unctad.org/en/PublicationsLibrary/tdr2015_en.pdf, July 2015), the Nigerian cashew sector has not suffered from unfavourable government policies; currently no taxes are charged on exports; on the contrary, exporters benefit of incentives.

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In contrast with other African cashew producing countries, Nigeria with its 170 million people offers cashew processors ready, large domestic market. Consumption of cashew nuts and flavoured and branded mixed nuts sold in supermarkets is growing steadily, being popular with the middle and high income population, while unbranded cheap cashews are sold at the traffic hold-ups and local stores.

The Nigerian Federal Government has already started implementing the five-year “Nigeria Industrial Revolution Plan” launched during the administration of former President Goodluck Jonathan. The plan has identified 13 strategic products that can partly replace crude oil exports, becoming important foreign exchange earners. One of these strategic export products is cashew.

Speaking in Lagos on September 17, at the 6th National conference of the academy for entrepreneurial studies with the subject “Diversification: Roadmap to Nigeria’s Economic Recovery”, the Nigerian Vice President reiterated the need for the country to diversify its economy. In its turn, the Nigerian President disclosed on October 5th that the 2016 national budget being prepared by his administration would include new policies and measures to encourage the rapid diversification of the economy away from its current over-dependence on the oil and gas sector.

Furthermore, the economic diversification policy adopted by the Nigerian Federal Government entails enabling environment for Micro, Small and Medium Scale Entrepreneurs to provide value-added services in agro-commodities for both domestic use and export. Given its geographical spread and high potential for export, cashew is one of the five priority agro-based commodities targeted by the government.

According to the declaration of the Executive Director/CEO of the Nigerian Export Promotion Council at the Nigeria – Vietnam Buyers – Sellers Meet of 1-3 February 2015 in Dubai, the Agency is partnering the USAID and the Nigeria Expanded Trade & Transport (USAID NEXTT) to fully maximize the potential of the crop along its entire value chain and to address issues related to standards and quality (for information, the Nigerian Export Promotion Council is a member of ACA’s Advisory Board since March this year).

Sources:

http://www.nac.org.ng/NIRP.pdf

http://sundiatapost.com/2015/08/06/nepc-identifies-13-national-strategic-export-products-to-replace-oil

http://www.televisionafrica.com/2015/09/nigerias-economy-need-to-be-diversified-vice-president-osinbajo

http://www.premiumtimesng.com/news/top-news/191064-well-use-2016-budget-to-diversify-nigerian-economy-buhari.html

http://www.nepc.gov.ng/upload/NEPC%20brochure%20cashew%20buyer%20%20and%20seller.pdf

Nigerian cashew processors operating below installed capacities in the third quarter of 2015

The current Nigerian raw cashew production was estimated at 144,000 tons.

Raw cashews traded this season between 170,000 and 200,000 Naira/ton; at these levels of price, processing costs averaged 520 US$/ton. For comparison, processing costs in Mozambique, India and Vietnam average 268 US$/ton (52,528 Naira/ton), 254 US$/ton (49,784 Naira/ton) and 217 US$/ton (42,532 Naira/ton) respectively, taking into account the governmental subsidies of 126 US$/ton and 83 US$/ton (16,268 Naira/ton) respectively in Mozambique and India.

With operations becoming unprofitable and without governmental support, Nigerian processors idled 70% of their capacities and requested a financial incentive of 260 US$/ton (50,960 Naira/ton) to strengthen the sub-sector. According to a statement of the Secretary of the National Cashew Association, only seven processing plants remained operational by August/September, namely Olam, Foodpro, Esteema Diamond, Abod success, KD Foods, ACET Nigeria and Valency (all members of the National Cashew Association, which had privately invested 12 billion Naira into cashew processing in Kwara, Kaduna, Ogun and Lagos).

Source: http://www.ngrguardiannews.com/2015/09/nigerian-cashew-processors-operating-below-installed-capacity

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In Senegal, the processing sector has regained some momentum following the installation of a new processing plant with a capacity of 4,000 tons in Sokone. Other units located in Ziguinchor and Sédhiou regions are in operation, despite the high price of raw cashews still available.

Regulatory framework for the cashew industry: Warehousing Receipt Systems to facilitate access to finance and Commodity Exchanges

Beyond high levels of informality, one of the critical barriers to increased access to finance in most developing countries is the inability of banks to secure reliable collateral for lending in the agro sector. Agricultural financing revolves mainly around charges or pledges over post-harvest production.

Under a Warehouse Receipt System, a warehouse receipt is issued to a named depositor - who may be a farmer, farmer group, processor or trader, as evidence that he/she has deposited a specified commodity, of stated quantity and quality, at a specified location. The holder of the receipt may pledge it to a lender - with the stored commodity being the collateral for a loan, or transfer it to a buyer (by way of a sale). The warehouse operator or collateral manager, who has custody of the stocks, guarantees delivery against the receipt, and should be able to make good any value lost through theft, fire or other catastrophes. The key players in the Warehouse Receipt System are the depositors, the warehouse operator or collateral manager, and lenders.

The Warehouse Receipt Systems contribute to creating a framework for moveable collateral on stocks owned by farmers, traders and processors, but held in licensed warehouses. They help establish the requisite financial infrastructure needed to fuel the operation of commodity exchanges; facilitate the access to agricultural credit and professionalize agricultural storage, which are critical to reduce post-harvest losses; improve the stability of market prices; ensure food security; and encourage formalization of businesses in the agribusiness sector

Several projects aiming at installing Warehouse Receipt Systems in several African countries are in different stages of implementation, with a pilot on the cashew sector.

Cote d’Ivoire

The World-Bank co-financed Warehouse Receipt System program was launched in 2013. Cashew sector stakeholders have drafted a Warehouse Receipt System Bill which has been submitted to the Government, and are assessing now the national warehousing capacity. The cashew value chain has been chosen as a pilot for the implementation of the System.

The World Bank program document of 8 September 2015 related to a proposed development policy credit in the amount of 89.5 million Euro (100 million US$ equivalent) proposes a third and final operation in a programmatic series of three Poverty Reduction Support Credits designed to assist the Government of Côte d’Ivoire during the 2012-2015 period. The proposed Third Poverty Reduction Support Credit would be a single-tranche disbursement in the amount of Euro 89.5 million (US$100 million equivalent) provided as an International Development Association (IDA) credit.

The document states the measures adopted by the Ivorian government to promote cashew processing related to the Warehouse Receipt System. They include: (i) the draft law on the Warehousing Receipt System, and (ii) the establishment of a separate window dedicated to cashews as part of the national fund named “Fond de Restructuration et de Mise a Niveau des Entreprises Industrielles”.

These measures are expected to result in:

an increase in the farm-gate price as a percentage of the CIF export price from 50% in 2012 to over 60% in 2016;

the increase in the number of restructured cashew and cotton cooperatives formally established in accordance with OHADA (Organisation for the Harmonization of Business Law in Africa) standards from 0 in 2012 to at least 20 by 2016;

the increase in the domestic raw cashew processing rate from 5% in 2012 to 8% in 2016; and

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the increase in the number women’s cooperatives benefiting from technical assistance on cashew processing from 0 in 2012 to 10 by 2016.

Kenya

A Warehouse Receipt System has been endorsed by Cabinet and sent before Parliament for deliberation. Five banks participate in the pilot phase of the project by lending US$4 million against receipts.

Ghana

Ghana’s Warehouse Receipt legislation was put into place in 2012. The first grain warehouse receipts for Ghanaian grain farmers and traders issued in 2013 served to ease the process of receiving a loan, storing crops and increasing revenue from sales. The Ghana Grains Council has developed its own set of rules and regulations to control the functioning of the system and the proper conduct of members using receipts.

The Bank of Ghana has participated in the implementation of the Warehouse Receipt System which should also establish the adequate financial infrastructure needed to fuel the operation of the Commodity Exchange. On June 25, 2015, the Cabinet approved a Consolidated Securities Industry Bill to provide a legal framework allowing the Securities and Exchange Commission to regulate commodity exchanges and Warehouse Receipt Systems in Ghana, among others.

Ghana Commodity Exchange, which is yet in a design stage, is expected to be fully operational by the first half of 2016, and start with spot trading in agricultural commodities including maize, soybeans, paddy rice, palm oil, and ground nuts. Cashew trading will be introduced as the exchange develops.

Tanzania

The Warehouse Receipts System in the procurement of cashew nuts in Tanzania was introduced in 2005, following failure of liberalized Agricultural Markets in the cashews business.

The Warehouse Receipt Act no 10 passed on 6 June 2005 provided for the establishment of a regulatory framework for Warehouse Receipts and for licensing procedures of warehouses (http://www.wrs.go.tz/downloads/resources/Warehouse%20Receipt%20Act%20No%2010-2005.pdf). The Act has been amended several times, the latest issued on 5 January 2015 (http://www.wrs.go.tz/downloads/news/WRS%20Bill.pdf).

Currently the basic structures of the Warehouse Receipts System are in place. These include the Warehouse Receipt Legislation with its Regulations, the Regulatory Board, farmers and financial organizations, local governments, local and international markets and the chain of warehouses in rural and urban areas. The system is operating with both commercial banks and Savings and Credit Cooperative Societies (SACCOS). It is governed by the Tanzania Warehouse Licensing Board (http://www.wrs.go.tz/) and regulated through the Warehouse Receipts Act No. 10 of 2005 and the Warehouse Regulations of 2006.

More than 60 warehouses with a combined capacity of 267,000 tonnes, owned by private and/ or cooperatives are currently licensed by the Tanzania Warehouse Licensing Board. At present, only 8 commodities can be traded under the System: cashews, coffee, cotton, rice, maize, sesame, sunflower and pigeon pea.

A study published by the end of 2013 found out that the majority of key cashew stakeholders was satisfied with the system, given the better prices fetched for the crop, the stabilisation of the market, the safe and easy way granted to carry out business transactions, and the assurance of paying back the loans, among others. The study also identified various challenges experienced by cashew sector stakeholders, including the lack of transparency on the auction price and of comprehensive quality control, loss of weight, high interest rate charged, multi-levies imposed on the crop, and political interference.

By end July 2015, the Tanzanian Capital Markets and Securities Authority have announced in a press conference that it foresees the establishment of the first Tanzania Mercantile Exchange. The Bill on the law to establish the Exchange was tabled in the last parliamentary meeting of July 30

th, waiting only the

President’s approval. The Tanzania Mercantile Exchange is expecting to start trading in cashew nuts,

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coffee, sesames and probably maize (which are now traded under the Warehouse Receipt System) by the end of this year, as regulations and dealers will be in place by end-September.

Sources:

http://www.intracen.org/What-are-warehouse-receipt-systems/, http://www.ghanabusinessnews.com/2015/10/29/cashew-industry-needs-increased-production-and-certification-agric-ministry/, http://www.ruralfinanceandinvestment.org/sites/default/files/WRS_SSA_MFW4A_FINALE.pdf, http://www.ghanabusinessnews.com/2015/07/09/bank-of-ghana-works-on-warehouse-receipt-system/, https://www.african-markets.com/en/stock-markets/gse/ghana-commodity-exchange-takes-off-in-june-2016, http://www.africanbusinesscentral.com/2015/06/28/ghana-commodity-exchange-gcx-to-be-fully-operational-by-june-2016/, http://www.viasat1.com.gh/news/business/article.php?postId=2505, http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/09/10/090224b0830cb59b/1_0/Rendered/INDEX/Cote0d0Ivoire00dit00PRSC0300Project.txt

India

India is the first producer and consumer and the second largest exporter of cashew kernels

According to a statement made on 27 September by a top official of the Cashew Export Promotion Council of India, the country overtook USA as far as the domestic cashew consumption is concerned. Indian consumption recorded a compounded annual growth rate of 8.6% over the past decade.

Cashews are consumed mostly in the Northern part of India; cities like Delhi, Mumbai, Jaipur and Lucknow are major consuming centres. The growth of consumption was made possible by the steady increase of the national Gross Domestic Product, despite the rise in cashew kernel prices. Ten years back cashew kernels were priced between 400 and 500 Rupees/kg, and now they cost about 800 Rupees/kg.

The Cashew Export Promotion Council of India estimates the current raw cashew supplies at 17,000,000 tons/year, half of which are produced domestically and the other half imported. Cashew kernel production averages 375,000 tons/year (conversion rate 22%), of which 125,000 tons are exported and 250,000 tons are consumed locally.

Discrepancies appear, however, between figures: the International Nut and Dried Fruit Council estimated the US consumption of cashew kernels in 2013 at 130,477 tons, and the Indian on at 50,000 tons.

Sources: http://economictimes.indiatimes.com/articleshow/49124945.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, https://www.nutfruit.org/wp-continguts/uploads/2015/11/global-statistical-review-2014-2015_101779.pdf).

Indian processing sector remains heavily dependent on raw cashew imports

The Cashew Export Promotion Council of India stressed that there is no alternative to importing raw cashews in order to keep the domestic processing industry self-sufficient and to meet the growing domestic and global demand of cashew kernels. In order to maintain exports of kernels averaging 375,000 tons/year between 2012/13 and 2014/15 seasons, India would have to import about 950,000 tons/year of raw cashews in addition to the average 750,000 tons/year supplied domestically.

The impact of the very high raw cashew prices and cost of imports into India is reflected by the following comparison between the costs of raw cashew imports, cashew kernel exports and the resulting FOREX deficit during 1 April 2014 to 31 March 2015 (2014/15 season) and the April to November 2015 period. The figures explain why Indian processors and exporters, which have suffered also a slash in export incentive from 5% to 2%, focused on the domestic market during the period, and the exports of kernels dropped by 15 per cent during the period 1 April - 1 November 2015. Noteworthy, while Indian kernels was traded at 3.35-3.65 US$/lb. in the international market, domestic users and retailers were paying it US$3.45 per lb., rendering local sales more profitable than exports.

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Million US$

1 April 2014 to 31 March 2015 1 April 2015 to 1 November 2015

Raw cashew imports 1,031 942

Cashew kernel exports 853 325

FOREX earning deficit 178 617

The steep increase in imported raw nut prices neutralised the gain from the depreciation of the rupee against the dollar.

The festival season in India, which falls between October and November, is expected to lead to a further surge in cashew demand and consumption. The global cashew market is also expected to see more positive changes in the fourth quarter, according to analysts.

Source: http://www.thehindubusinessline.com/economy/agri-business/domestic-raw-cashew-output-dips-on-unseasonal-rains/article7730972.ece, http://agricoop.nic.in/, http://www.mydigitalfc.com/commodities/cashew-output-falls-despite-increase-plantation-area-081

Indian Government takes the first step for a National Agriculture Market online

Currently, the Agriculture Produce Market Committee Acts in different Indian States permit the first sale of crops only in regulated physical market yards named mandis. The market yards regulated by Agriculture Produce Market Committees limit the scope of trading in agricultural commodities at the first point of sale (i.e. when farmers offer produce right after the harvest) in the local mandi, typically at sub district or district levels. This means that farmers can only sell only to buyers/traders or commission agents licensed to operate in the area under a particular Act. In most cases, multiple licences are required to trade in different mandis within the same state.

On July 1st, the Federal government approved setting up a National Agriculture Market online, based on a proposal cleared by the Cabinet Committee on Economic Affairs. This will be an online electronic platform (portal) allowing farmers to sell their produce to buyers in any part of the country, following the example of the common e-platform already set up in Karnataka. The State government of Karnataka has established Rashtriya e Market Services Private Limited, a joint venture company with the Government and the NCDEX Spot Exchange Limited having equal shareholding, to offer an automated auction platform for connecting all the mandis in the State. Already, 55 of the 155 main market yards have been integrated into a single licensing system through this platform.

The Indian National Agriculture Market - online platform, which is seeking to integrate 585 wholesale markets across the country, is not a parallel marketing structure, but a virtual market with the old physical markets at the back end. The system seeks to leverage the physical infrastructure of mandis through the online trading portal, enabling buyers situated even outside the State to participate in trading at the local level. While buyers can log into the platform from homes or offices anywhere in India, the transactions will be recorded as conducted through the mandi where the seller would normally bring his produce, and the Agriculture Produce Market Committee concerned will, therefore, continue to earn the mandi fee on the transaction even if it does not happen in that particular market yard.

The creation of the National Agriculture Market online should facilitate the emergence of a common national market for agricultural commodities, avoiding the current highly fragmented and costly agricultural transactions which prevent economies of scale and the smooth and continuous movement of agricultural goods across district and State borders.

The Small Farmers’ Agribusiness Consortium has been designated the lead agency for developing the e-platform. The Consortium has earmarked a total budget of 94 million US$ for the creation of the portal, of which 40 million to be spent in 2015/16; 32 million in 2016/17 and 22 million in 2017/18. The online platform is likely to take off in February 2016, with the initial integration of around 200 mandis in the states of Karnataka, Gujarat, Telangana and Maharashtra.

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Sources: http://indianexpress.com/article/india/india-others/agriculture-reform-government-takes-first-step-for-a-national-farm-market, http://sfacindia.com/PDFs/NATIONAL-AGRICULTURE-MARKET03-07-2015.pdf

Research and Development Centre for Technology Upgrading of Cashew Processing Equipment inaugurated

The Research and Development Centre for Technology Upgrading of Cashew Processing Equipment established in the Department of Mechanical Engineering of Shri Madhwa Vadiraja Institute of Technology and Management at Bantakal/Udupi was inaugurated on 31 August 2015. The facilities are provided by Karntataka Council for Technological Upgrading, the government of Karnataka and the Shri Madhwa Vadiraja Institute of Technology and Management.

Sources: http://www.thehindu.com/news/national/karnataka/rd-centre-for-cashew-processing-to-come-up-at-bantakal/article7589488.ece, http://sode-edu.in/rd-centre-for-cashew-processing-equipment-inaugurated/

Foretell Business Solutions Private Limited - India's information, research & advisory Group on commodities including cashews

The Group (http://www.fbspl.com/) provides information and data services, as well as trade and procurement advisory and specific consulting on commodities including cashews. The group’s websites include:

commodity market intelligence http://www.commodityindia.com

cashew market intelligence http://www.cashewinfo.com/

Foretell Business Solutions also organises key cashew-related events in collaboration with global and national cashew sector sponsors. Such events include:

The 9th Annual Conference on Cashew held on 21-24, September 2015 in Maputo, Mozambique organised in partnership with the African Cashew Alliance, the national governmental body overseeing cashew-related policies in Mozambique (INCAJU) and the Mozambican cashew processing association (AICAJU). In addition to technical sessions, the event covered Business-to Business meetings, a World Cashew Expo, a World Cashew Forum and field trips;

The 2nd edition of World Cashew Convention, scheduled on 18-20 February 2016 at Al Bustan, Rotana, Dubai, including technical sessions, a World Cashew Expo and a Buyers-Sellers meet on 20 February

Cashew-related documents published by the Group comprise:

"Cashew Handbook 2011 - Global Perspective", providing information on the current cashew industry status across the value chain (Contents at http://www.commodityindia.com/publication/Content_Handbook2011.pdf, full text )

Cashew Handbook 2014 (full COPY at http://www.cashewinfo.com/cashewhandbook2014.pdf

Special issues of Cashew week related to important cashew events which can be downloaded:

ACA Conference Special Issue 2012 http://www.cashewinfo.com/ACA_Cashew_week.pdf

Cashew Week Special Issue – International Conference on Cashew, Goa

http://www.cashewinfo.com/Goa_Cashew_2012_100_dpi.pdf

ACA Conference Special Issue 2013 http://www.cashewinfo.com/ACA_Cashew_week13.pdf

Cashew Week Special Issue – Gulfood 2014 http://www.cashewinfo.com/Gulfood_2014.pdf

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Cashew Week Special – Vietnam Golden Cashew Rendezvous 2014 http://www.cashewinfo.com/CashewWeekSpecial2014.pdf

Cashew Week Special Issue Circulated at SIAL PARIS & SIETTA 2014 http://www.cashewinfo.com/Circulated_at_SIAL_PARIS.pdf

Special Issue for World Cashew Convention & Gulfood 2015 http://www.cashewinfo.com/Mar_Cashew_WCC_2015_ebook.pdf

Diamond Jubilee and Kaju India Conclave 2015 organised by Cashew Export Promotion Council of India

Cashew Export Promotion Council of India celebrated in Kochi its 50 years Diamond Jubilee from 29th September to 1st October 2015 and organised on the occasion the Kaju India Conclave 2015. The Conclave comprised technical sessions focusing on the latest developments in cashew processing technology and the ways to enhance the future prospects of the international cashew market, B2B meetings between potential business partners and a Cashew Exhibition.

Source: http://www.thehindu.com/news/national/kerala/technical-sessions-of-cashew-conclave-

begin/article7709709.ece

“KISAN - Crop Insurance using Space Technology and Geo Informatics” pilot project launched

The Minister of State for Agriculture and Farmers’ Welfare launched on October 5th the KISAN - Crop Insurance using Space Technology and Geo Informatics pilot program of the Department of Agriculture,

Cooperation & Farmers’ Welfare.

The programme envisages the use of high-resolution remote sensing data — both from satellite and drone-based imaging, sophisticated modelling activities and other geospatial technologies for improvement in yield estimation and better planning of Crop Cutting Experiments needed for crop insurance programmes. The final aim of the project is to provide accurate assessments of crop damage allowing speeding up payment of crop insurance claims to farmers. Block-level yield estimations and the development of a new index-based insurance approach using remote sensing data are also planned under the program.

The pilot phase of the program covers the rice and cotton fields during the on-going Kharif season in Haryana, Karnataka, Maharastra and Madhya Pradesh States. It should be further carried out into the 2015/16 Rabi season in eight districts of the same states to assess the yields of rice, wheat and sorghum.

The government also launched an Android-based application for collection of data on hailstorms with assistance from Indian Space Research Organisation, in order to assess large-scale damages to standing crops. Currently, there is no comprehensive approach to collect data on their occurrences. The application will collect data in real time, along with photographs and geographical coordinates. This will help surveying crop loss quickly and more objectively. The data collected could then be uploaded on a server of the Indian Space Research Organisation.

Source: http://www.tribuneindia.com/news/nation/centre-unveils-kisan-project-hailstorm-app-for-crop-damage/141901.html

Vietnam

Vietnamese cashew industry facing difficulties

According to the Chairman of the Vietnam Cashew Association, cashew industry is facing many challenges.

The most critical drawback of the sector is its heavy dependence on imported raw cashews. While Vietnamese cashew kernel exports keep increasing steadily, cashew cultivated area and production decrease. In 2007, area under cashew trees was 302,800 ha; in 2014, only about 294,000 ha were cultivated with cashews. In addition, the average productivity dropped from 410 kg/ha in 2007, to 380 kg/ha

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in 2014. As a result, Vietnam is now the second largest raw cashew importer, with imported volumes nearly equal to India and ten times higher than Brazil.

Food safety is another hot issue: many containers of cashew kernels are being returned because they are contaminated with Salmonella or E. coli bacteria. Currently, the US Food and Drug Administration is checking food safety at cashew processing plants. In 2014, out of 265 facilities inspected in Vietnam 119 did not meet the food safety standards.

The difference in quality between cashew kernel batches produced in a same plant is another problem, caused by the fact that raw cashew inputs have different origins and quality. The raw cashews produced domestically are at times mixed with raw cashews of lower quality imported mainly from Africa.

The large number of Vietnamese cashew kernel exporters (345 companies in 2014, of which 73% with a turnover below 5 million US$/year) creating an unfair competition climate which affects negatively the processing sub sector is yet another issue of concern. These exporters compete with each other by lowering their own prices, in contrast with export practices of Brazilian and Indian exporters.

Source: http://www.saigon-gpdaily.com.vn/Business/Economy/2015/7/114394/

For the tenth consecutive year, Viet Nam ranks first in cashew kernel exports

Last year, Vietnam earned 2 billion US$ from exporting 300,000 tons of cashew kernels and 200,000 US$ from cashew by products.

Exports during the first 9 months of 2015 are valued at US$ 1.78 billion a year-on-year growth of nearly 21%. Unlike almost all other agricultural products, exports of cashew kernels followed a rising trend thanks to profitable export prices and higher demand. The three largest importers of Vietnamese kernels are U.S.A (36% in value), Netherlands (13%) and China (12%).

Cashew export revenues are expected to exceed US$ 2.2 billion by the end of this year according to Vietnamese Ministry of Industry and Trade, taking into account the coming period of Asian festivals, Christmas and New Year festivities.

Sources: http://news.chinhphu.vn/Home/Vietnamese-cashew-nuts-account-for-a-half-of-global-export-value/201510/25613.vgp, http://vietnamnews.vn/economy/276950/cashew-exports-to-top-22-billion.html

Raw cashew shortages may decrease export availability of cashew kernels during the last quarter of 2015

The Vietnamese Cashew Association anticipates a drop in cashew kernel exports during the last quarter of 2015 in comparison with the same period last year due to raw cashew shortages. In fact, since September nearly half of the small cashew processing plants in the major cashew producing provinces are out of raw material. Meanwhile, price of raw cashews remains very high; raw nuts imported from Africa were priced around 1,000 US$/ton earlier this year, and traded at 1,300-1,400 US$/ton by end September. In addition, the appreciation of the US dollar against the Vietnamese Dong disadvantages importers.

Source: http://vinacas.blogspot.ch/2015/10/vietnam-cashew-shortage-to-hit-vn.html

Cashew kernel exports increased during the first 9 month of 2015

According to the latest report of the Ministry of Agriculture and Rural Development, Vietnam exported 245,000 tons of cashew kernels during the first three quarters of 2015, valued at 1.78 billion US$, which is an increase of 7.8% in volume and 20.6% in value over the same period in 2014.

Over the first 9 month of 2015, average domestic prices of cashew kernels increased by 5%, from 36,000 dong/kg to 37,500-37,800 dong/kg.

Source: http://bonanza.com.vn/index.php/en/news/89-cashew-export-light-spot-in-grey-picture

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Vietnam joints the rather controversial Trans-Pacific Partnership Agreement

Vietnam joined the Trans-Pacific Partnership Free Trade Agreement the first week of October 2015. The other countries signatory of the agreement are USA, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Mexico, Canada and Japan.

If agricultural export opportunities in the frame of the agreement are not really high for Vietnam, the country expects a reduction of non-tariff barriers to trade, the increase of foreign investments in the country, together with technology and knowhow transfer, technical support in improving quality and safety of Vietnamese export produce and the integration into global value chains.

Sources: http://en.cap.gov.vn/news/tID454_Vietnam-joins-TransPacific-Partnership-TPP-Challenges-and-Opportunities-for-agricultural-production.html, https://ustr.gov/tpp/, https://www.washingtonpost.com/opinions/kill-the-dispute-settlement-language-in-the-trans-pacific-partnership/2015/02/25/ec7705a2-bd1e-11e4-b274-e5209a3bc9a9_story.html, https://www.eff.org/en-gb/issues/tpp, http://en.cap.gov.vn/news/tID454_Vietnam-joins-TransPacific-Partnership-TPP-Challenges-and-Opportunities-for-agricultural-production.html

3. Prices

3.1. Raw cashews

Raw cashew prices reflect the balance between supply and demand, and are usually correlated with kernel prices.

An additional factor influencing raw cashew prices paid by processors is their need to dispose of regular supplies/sufficient inventories of raw material the year round. They may be forced to purchase their raw material at higher prices during the off-season period, i.e. during the period June to September, after the end of the marketing season in West Africa and before the start of crop supplies from the Sothern hemisphere.

Raw cashews harvested in the Southern hemisphere account for less than a fifth of the world output, but the supplies have the advantage of a timely arrival, after the end of harvesting and marketing seasons in West Africa, India and Vietnam. Furthermore, the Southern Hemisphere crop arrival on the market coincides with the highest annual peaks of demand for kernels: the autumn Diwali festival and the wedding season in India (from September through January), the New Year festivals in China (January-February), and the Christmas and New Year festivities in USA, Europe and elsewhere.

Cashew harvesting and marketing cycle is launched in Indonesia, closely followed by Tanzania, Kenya, Brazil and Mozambique. The Indonesian crop averages annually 60,000 to 70,000 tons of raw cashews which reach the market in July/August. Brazilian crop averaging 200,000 to 250,000 tons/year is entirely consumed by domestic processors. Mozambique and Kenya harvest annually 80-100,000 tons/year and 30,000 tons/year respectively; their crop is usually harvested during the last quarter of the year.

Supplies from these origins are by far inferior to the high raw cashew import demand of Vietnam and India. This gives the most important advantage to Tanzania, which harvests on average 160,000 to 170,000 tons/year of generally high quality raw cashews commanding better prices than any other East African origin and markets them usually from August/September onwards. This explains why Tanzania, the largest cashew crop supplier of the sub region, has been a price setter for years.

This is not the case with West African countries; when their cashew marketing seasons start, the market is already well supplied with cashews, in particular in the years when the Indian and Vietnamese crops are abundant. This puts a downward pressure on prices; West African farmers fetch generally lower prices for their raw cashews.

Several factors caused nervousness, a highly speculative market situation and the firmness of raw cashew prices in the Northern hemisphere from the beginning of this season. The supply factors included lower

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raw cashew yields, the relatively lower quality of nuts, and the rumours about a lower than anticipated cashew output in most producing countries. Moreover, the Indian crop was delayed, the Vietnamese crop was lower than expected and delayed, and the subsidy allowed to Indian exporters decreased. In addition, a larger than usual number of speculators was active in West African markets, cashew shipping was often delayed and exporters were repeatedly defaulting contracts that they could not honour at the initially negotiated (lower) prices. The demand factors comprised a slowdown in European kernels demand and delays in imports caused by the depreciation of the Euro against the U$ dollar and by their relatively high prices.

Raw cashew prices continued their upward trend up to mid-September due to the tightness of the market provoked by increased Chinese, US and Indian consumptions and the tight supplies for processing. From mid-July to mid-August they remained in the range of 1150 to 1650 US$/ton, as most processors had adequate inventories and the kernel trade was slowing down. During September they averaged between 1150 and 1770 US$/ton.

Source: OANDA http://www.oanda.com/currency/historical-rates/

The first week of October, the start of the decrease of raw cashew prices CFR Asia was perceivable. They varied in the following range, depending on quality and origin:

Origin

Last week September 2015 First week October 2015

KOR

lb. kernels/bag 80 kg USA$/ton

KOR

lb. kernels/bag 80 kg USA$/ton

Indonesia 52 - 56 1,650 – 1,800

Tanzania 54 - 56 1,650 – 1,800 54 - 56 1,600 - 1,700

Benin 40 - 44 1150 - 1400 40 - 44 1000 - 1400

Côte d’Ivoire 40 - 44 1150 - 1400 40 - 44 1000 - 1400

Ghana 40 - 44 1150 - 1400 40 - 44 1000 - 1400

Guinea Bissau 46 - 48 1500 - 1600 46 - 48 1000 - 1400

Nigeria 40 - 44 1150 - 1400 40 - 44 1000 - 1400

Senegal, Gambia 46 - 48 1500 - 1600 46 - 48 1000 - 1400

Source: Rongead

A broker from Global Trading & Agency B.V. mentioned an increasing number of reports stating that raw cashew supplies were reasonable in September, but a new shortage may occur from December until the

800

1000

1200

1400

1600

1800

2000

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w22

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w26

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w34

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Raw cashew C&F prices delivered to India, US$/ton, April to end September 2015

KOR < 48 KOR > 48

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new crop from Tanzania and West Africa will reach the market. However, many processing plants remained idle, as they could not find the needed quantity and quality of raw cashews at prices reflecting the current kernel market prices.

The stakeholders of the Tanzanian cashew sector have fixed the minimum price for the opening auction that should start at the end of September at 1200 TZN/kg (0.60 US$/kg) for good quality nuts (52-56 lbs. /bag) and 960 TZN/kg (0.48 US$/kg) for nuts of second choice (48-50 lbs. / bag).

Offers from Indonesia and Tanzania by end September were quoted between 1650 and 1800 US$/ton for very good quality raw cashews (KOR 52 to 56 lbs. /bag). It should be noted that at 1800 US$/ton, small and medium packers would not be in a position to sell W 320 kernels below 3.65 - 3.75 US$/lb. in order to break even.

Though these prices are high, buyers are strongly competing for raw cashews from these origins because Indian processors are short of inventories for supplying the domestic demand of kernels, and the Vietnamese processors are short of raw material for supplying kernels to China.

Sources: http://samsons.co.in/2015/09/16/cashew-market-report-sep-16-2015/, http://www.globaltrading.nl/, http://www.amberwoodtrading.com, http://www.intracen.org/uploadedFiles/intracenorg/Blogs/Cashew_Nuts_-_Main/Gambia%20bulletin%2016%20of%2017%20September%202015.pdf

3.2. Cashew kernels

After a very steady increase until end-May, prices of W 320 cashew kernels decreased to the end of July and roughly maintained these levels until the beginning of September. Reasonable volumes of kernels were traded during this period. They further decreased slightly until the end of the month.

The differential between the lowest and the highest price on a given day doubled, from 5-10 cents/lb. to 15-20 cents/lb. Forwards were trading at a premium of 5-10 cents/lb. depending on processor and shipment

period.

Source: Rongead

Several brokers gave the following main reasons for this price evolution:

3.30

3.40

3.50

3.60

3.70

3.80

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w16

w18

w20

w22

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w26

w28

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w34

w36

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w40

W 320 cashew kernel prices FOB Asia, US$/lb, April - end September 2015

Min Max

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Lower than expected buying interest despite the fact that cashews remain the most attractively priced tree nuts;

Most European and US buyers seem to be well covered until the end of the year;

Chinese importers disappeared from the market mainly because of the Yuan depreciation against the US dollar;

Depreciation of the Vietnamese dong against the US dollar by about 4-5%;

High interest rates of Vietnamese banks

During September, the average FOB Asia prices of cashew kernels by grade were the followings:

Kernel grade Average, US$/lb.

W 240 3.60 – 3.80

W 320 3.45 – 3.65

W 450 3.40 – 3.55

WS 3.15 – 3.30

LP 2.95 – 3.10

The number of enquiries at these price levels increased but the volumes traded remained small, as most sellers preferred to wait expecting a rise in prices.

The Brazilian National Food Supply Agency CONAB charted the evolution of cashew kernel W 320 prices of Indian and Vietnamese origins between 13 January 2013 and 15 September 2015.

Evolution of cashew kernel W 320 prices FOB, by origin, US$/lb - 13 January 2013 to 15 September 2015.

India Vietnam

Source: Public Ledges, elaboration by Marden Teixeirense of CONAB marden.teixeirense@conab.gov.br

% over period

India 2.8%, Vietnam 7.2%

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During the two and a half years period covered, the prices of Indian kernels increased by 2.8%. The prices of Vietnamese kernels increased twice as fast, by 7.2%. Between January and June 2015 kernel prices of both origins rose steadily, attaining the same level of 3.75 US$/lb. by the end of June. They decreased rapidly afterwards to 3.68 US$/lb. for the Indian origin and 3.72 US$/lb. for the Vietnamese one.

Two opposing tendencies are going to influence the evolution of kernel prices until the end of the year: the reduction of buying interest from major European and Chinese importers because of the slower pace of economic growth at one hand, and the higher demand expected during the year-end period on the other hand (Indian and Chinese festivals and events, and Christmas and New Year festivities).

4. Currency outlook

The appreciation of the US dollar by more than 15% over the second and third quarters of 2015, combined with a few other factors, created a storm for a number of key commodity and financial markets.

The prices of commodities and resources have gone up in countries where the US dollar is adopted as denomination for equity, debt and commodity products, because the dollar got stronger against the local currencies. This was the case for most countries producing, consuming and trading in cashews where the national currencies depreciated versus the US dollar: Indonesia, Tanzania, Kenya, Mozambique, Brazil, India and Vietnam. This is good news in the short term, but higher prices tend to lower the demand. If the trend continues, a crisis could install for cashew producers and traders.

The Chinese and Ghanaian currencies were stable over the period, while Euro and the CFA Franc which is pegged to it, as well as the Nigerian Naira and the Gambian Dalasi appreciated.

The fundamental strength of the US dollar reflects the US economic expansion, although the rise in interest rate expected since 8 years is likely to remain delayed due to concern over the impact on global economy. The shrinking of Federal Reserve balance sheet (4.5 trillion US$), the consistently low oil prices, as well as China and Greek-related issues continue to raise FX market risks that amplify volatility.

The fall of the Chinese Yuan Renminbi by 1.9 per cent against the US dollar on August 11, triggered a dramatic reaction of markets. For much of the past year, the Yuan has held firm against the surging US dollar (a de facto peg of about 6.2 Yuan per US$ since June), while other Asian currencies have fallen by as much as 8 per cent up to July this year. The reform announced on August 11 effectively freed the currency allowing it to trade close to a market-determined rate, with the potential for near-term weakness. Fears of a further devaluation as the new rate came into force led to a two-days slipping of the Yuan against the US$, but the Central Bank prevented further falling by ensuring that state-owned banks sold dollars and bought Yuan to stabilise the currency.

Euro appreciation due to delay in Federal Reserve raising rates despite the loose monetary policy of the European Central Bank reflects the weak Eurozone outlook. The Eurozone faces major challenges: deflation pressures, weak growth prospects and large fiscal deficits and debt stocks. In spite of August deal to prevent Grexit, the uncertainty over the ability of the new Syriza - led Greek government to implement reforms successfully also undermines the Euro stability.

The CFA Franc followed a very similar evolution, being pegged to Euro.

The Brazilian Real is plummeting since the beginning of the year (touching thirteen-year lows against major currency pairs) because of the deepening of Brazilian political crisis and the critical economic recession, the sharp deterioration in the fiscal position of the country and the growing external financing requirements to adjust the current account deficit.

The Indian rupee continues to weaken as the economy struggles to pick up momentum and on expectations that an impending rise in U.S. interest rates will keep the dollar on a steadily strengthening path. Many analysts foresee a dim outlook for the Rupee and the Indian economy on the whole, given the weak industrial activity and the risk of delayed monsoon rains.

The Vietnamese Dong has devaluated by 4.4% since the beginning of the year. The currency has been devalued for the third time this year and its trading band widened, giving it enough room to fluctuate more

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flexibly until the ends of the year and also in early months of 2016. The currency could thus cope with negative impacts from international and domestic markets.

The Kenyan Shilling depreciated and its outlook is at risk due to weak export revenues (expected to fall further as any renewed terrorist attacks undermine tourism), strong import demand (which is rising due to drought), and fiscal deficit financing pressures. In its efforts to counter the weakening currency and to slow down the inflation (6% in September), the Central Bank of Kenya is likely to maintain a tight policy stance and robust liquidity management.

The very slight appreciation of the Ghanaian New Cedi from April to September 2015 was driven by increased sales of US dollars by the Bank of Ghana and the slowdown of government spending. The IMF-advised reforms should help building market confidence, but the high and accelerating inflation (17.4% in September) and the lower than expected cocoa crop 2015/16 are raising concerns. Unless these reforms continue to be successfully implemented, Ghanaian currency outlook will be undermined by sustained strong US$ demand to meet import bills, US$ debt servicing costs, and the large and unsustainable fiscal and current account.

11,500

12,000

12,500

13,000

13,500

14,000

14,500

15,000

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Indonesian Rupiah versus US$ 1 April to 30 September 2015

1,800

1,900

2,000

2,100

2,200

2,300

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Tanzanian Shilling versus US$ 1 April to 30 September 2015

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90

95

100

105

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Kenyan Shilling versus US$ 1 April to 30 September 2015

34,000

36,000

38,000

40,000

42,000

44,000

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Mozambique New Metical versus US$ 1 April to 30 September 2015

3

3.5

4

4.5

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Ghanaian New Cedi versus US$ 1 April to 30 September 2015

62

63

64

65

66

67

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Indian Rupee versus US$ 1 April to 30 September 2015

21,200

21,400

21,600

21,800

22,000

22,200

22,400

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Vietnamese Dong versus US$ 1 April to 30 September 2015

2.9

3.1

3.3

3.5

3.7

3.9

4.1

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Brazil Real versus US$ 1 April to 30 September 2015

CASHEW QUARTERLBULLETIN

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575

580

585

590

595

600

605

610

615

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

CFA Franc versus US$ 1 April to 30 September 2015

195

196

197

198

199

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Nigerian Naira versus US$ 1 April to 30 September 2015

38

39

40

41

42

43

44

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Gambian Dalasi versus US$ 1 April to 30 September 2015

0.86

0.87

0.88

0.89

0.9

0.91

0.92

0.93

0.94

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Euro versus US$ 1 April to 30 September 2015

3

3.5

4

4.5

5

5.5

6

6.5

w14

w16

w18

w20

w22

w24

w26

w28

w30

w32

w34

w36

w38

w40

Yuan Renminbi versus US$ 1 April to 30 September 2015