In the last 6-7 weeks, cashew nut prices have gone up by more than $1 / lb! This is unprecedented in such a short period of time.

The IVC RCN suspension has been lifted and products can be shipped as long as exporters comply with government directives to sell some of their stocks to local processors. There is still resistance and confusion among exporters regarding price/payment terms and quality, and therefore RCN production has not yet increased. It is easy to blame the across-the-board increase in nut prices on Cote d 'Ivoire's suspension of RCN exports, and it is also easy to believe that once the suspension is lifted, all cheap RCN contracts will be shipped, enabling Vietnamese factories to fulfill their cheap nut contracts even if it is a few months late. But this is arguably difficult to achieve, and the reason for the suspension is that crop production and quality have indeed declined in Cote d 'Ivoire and neighboring countries, so there is a need to help local factories with procurement. As of a week ago, there were about 165,000 tonnes of cargo in registered warehouses across Cote d 'Ivoire, of which 30,000 tonnes (which could rise to 60,000 tonnes) had to be shipped to local processors, leaving 10,000-13,000 tonnes for export to Vietnam and India. In addition, there may be another 100,000 tonnes in farm warehouses (this figure is yet to be confirmed), and quality expectations are low, which is why factories prefer to buy from registered warehouses. Lifting the ban will provide further clarity on crop yields, but with RCN prices already above $1,600 / mt, it will also be clear to Vietnamese factories that their cheap ($1,000-1,050 / mt) contracts will not be shipped and will be resold at current market levels, with a knock-on effect that will lead to further human defaults.

If we look at the export figures for May, Vietnam's monthly exports hit a record high of more than 80,000 tonnes, breaking the previous month's record of 72,000 tonnes. Two consecutive months of record numbers, combined with year-to-date (through the end of May) exports of 300,000 tonnes, mean that Vietnam has already completed half of the 2023 full-year record (600,000 tonnes) in five months, which is helping to make up for the impact of transport delays. However, if we look more closely at the numbers, we see that Europe and North America are about a month ahead of 2023, while for the Asian market, it takes nearly a month longer to receive goods. These goods are stopped early, they are necessary for production, and the market does not build up much of the buffer stock required. In contrast, China's exports so far this year have increased from more than 17,000 tons in 2023 to more than 50,000 tons in 2024! Chinese traders took advantage of the market rally to make full inventory preparations for the Mid-Autumn Festival in July and August.


RCN imports in May were only 284,000 tonnes, significantly less than the approximately 350,000 tonnes they processed to achieve export volumes. Vietnam usually builds up RCN reserves between May and August so they can continue processing from September to December when the West African season ends and RCN imports slow down. In May, they were already running down their small reserve stocks, and even assuming future exports normalize to about 60,000 tons per month, there doesn't seem to be enough water shipments to meet kernel demand, let alone build up reserves.


The shipment in the next three months (August-October delivery date) will be very difficult. It is expected that the shipment of ships and containers will be problematic, and the factory will be delayed while waiting for the arrival of RCN, and the quality will be reduced. Shipments from September to December remain a mystery.