- The sharp rise in prices has created uncertainty among buyers and processors
- Many buyers are now hesitant to commit to purchases
- This scenario may result in lower demand for cashew kernels
The African Cashew Alliance (ACA) has warned that recent volatility in the global cashew market could lead to lower demand and production targets for local producers, including in Ghana.
The sharp rise in prices during the first quarter of the year, followed by a subsequent decline, has created uncertainty among buyers and processors.
Many buyers are now hesitant to commit to purchases, anticipating further price drops.
This scenario may result in lower demand for cashew kernels in the second half of the year.
In Ghana, the 2024 crop season has been affected by lower production estimates, averaging 25-30 percent lower than last year due to adverse weather conditions.
While some minor volumes may continue to flow, the main crops have already ended. Prices at the farm gate for well-dried and bagged RCN have been reported at GH¢12/kg, but trade has been thin.
The ACA noted that crop estimation in Ghana is currently challenging due to the continued flow of volumes from landlocked countries and Côte d’Ivoire.
Analysts believe that the cashew prices were unsustainably low after Vietnamese processors dropped prices to 14-year lows in mid-2023.
The subsequent rise in prices was driven by rumors of crop problems and the reality of a lower crop in Vietnam, West Africa, and possibly India.
While prices rose during March and April in a healthy manner, the situation changed with the spread of rumors about a crop failure in West Africa.
These rumors, coupled with the suspension of exports by Ivorian authorities, created a short-lived speculative bubble.
