2024 Cashew Crop Report: Impact on Prices

31 May 2024 Cashew Crop Report: Impact on Prices

Overview of the 2024 Cashew Crop

The 2024 cashew crop has been notably influenced by a combination of favourable and adverse factors, leading to a mixed outcome in terms of yield and quality across major producing regions. This year’s crop performance is crucial in understanding the dynamics of the global cashew market and its subsequent impact on prices.

Regional Production Analysis

1. West Africa:
   • Ivory Coast: As the largest cashew producer in the world, Ivory Coast experienced a relatively stable harvest this year. Favourable weather conditions and effective pest management resulted in a slight increase in yield compared to 2023. However, logistical challenges, including transportation strikes and port congestion, have posed significant hurdles in getting the nuts to international markets on time.
   • Nigeria: Nigeria saw a substantial decline in production due to erratic weather patterns and delayed rainfall. Lower yields and poorer nut quality have reduced the country’s export volumes, contributing to a tighter global supply.
2. India:
   • India, a major producer and consumer of cashews, had a mixed season. Some regions faced drought conditions severely impacting yield, while others benefited from timely monsoons. The overall production in India saw a slight decline, exacerbated by labour shortages and rising input costs.
3. Vietnam:
   • Vietnam, a key player in cashew processing and export, experienced a modest increase in raw cashew nut (RCN) imports to supplement its crop, which saw marginal growth. Despite this, the country’s processing industry faced challenges due to increased labour costs and energy prices, impacting the final product’s cost.
4. Brazil:
   • Brazil’s cashew sector suffered from prolonged droughts, significantly affecting both yield and quality. As a result, Brazil’s export potential has been constrained, further tightening global supply chains.

Global Market Impact

The combination of varied regional performances has led to an overall constrained supply in the global market. The steady demand for cashews, driven by health trends and rising consumption in both traditional markets (such as India and the United States) and emerging markets (like China), continues to exert upward pressure on prices.

1. Supply-Demand Imbalance:
   • With significant production declines in key regions such as Nigeria and Brazil, and logistical issues in West Africa, the global cashew supply is tight. Meanwhile, demand remains robust, leading to a classic supply-demand imbalance that drives prices up.
2. Processing Costs:
   • Increased labour and energy costs in major processing hubs, particularly Vietnam and India, have contributed to higher production costs. These increased costs are passed down the supply chain, adding to the overall price consumers pay.
3. Currency Fluctuations:
   • Fluctuations in currency values, especially in emerging markets, have also played a role. A weaker local currency can make exports more competitive, but it can also increase the cost of imported inputs, influencing overall production costs and prices.

Price Trends and Consumer Impact

As a result of these factors, the global cashew market has seen a noticeable increase in prices throughout 2024. Wholesale prices for raw cashew nuts and processed cashew kernels have risen by approximately 10-15% compared to the previous year.

Consumer Prices:

• Retail prices for cashews in major markets have followed this upward trend, with consumers in Europe, North America, and Asia experiencing higher prices on supermarket shelves. This increase could lead to a shift in consumer behaviour, potentially reducing demand elasticity as cashews become more of a premium product.

Future Outlook:

• Looking ahead, the market’s focus will be on the next planting season and any technological or logistical improvements that can mitigate current challenges. Investments in better irrigation systems, pest control, and supply chain efficiencies will be critical in stabilizing future prices.

Conclusion

The 2024 cashew crop has underscored the vulnerability of agricultural commodities to climatic and logistical challenges. With production disparities across key regions and sustained demand, prices have inevitably risen. As the global market adjusts, both producers and consumers will need to navigate this new landscape, balancing production costs and retail prices in a way that ensures the sustainability of the cashew industry.