Cashew Market: East African Weather Turns Supportive as Kernel Prices Edge Up
Favourable July weather in Tanzania and Mozambique boosts 2026–27 cashew crop prospects while kernel prices in India, Vietnam and EU show a mild upward trend.
Prices
Kernel prices, converted from recent offers into approximate EUR/kg, show a gently firmer trend across key origins. In late July, conventional W320 kernels from India were offered around EUR 6.50–6.60/kg FOB, with organic lots near EUR 8.00/kg. Vietnam’s WW320 hovered just below India at roughly EUR 6.30–6.40/kg FOB, while EU-distributed WW320 ex Netherlands traded around EUR 4.60–4.70/kg FCA, reflecting freight, handling and mixed grade availability.
Over July, most grades registered incremental gains of about EUR 0.05–0.10/kg, indicating a firm but not overheated market. Premium whole grades (W240, W320) continue to command a clear premium to pieces (LWP, SWP), and organic lines retain a significant price uplift, especially for EU-based stock.
Supply & Demand
Weather is currently the key supportive factor on the supply side. In southern Tanzania’s main cashew belt (Mtwara, Lindi, Ruvuma-Tunduru), July rainfall stayed below 15 mm and close to zero in many areas. Sunshine exceeded eight hours per day, humidity was low and winds remained generally calm, with daytime temperatures of 24–28°C and cool mornings at 14–18°C. This combination is highly favourable for flowering, pollination and initial nut set, while also suppressing fungal spores and lowering the need for sulphur dusting and fungicide sprays.
In Mozambique’s Nampula, Cabo Delgado and Zambézia provinces, July brought similarly supportive winter conditions with minimal rain, warm days and cooler nights. The cool, dry pattern helped break vegetative dormancy and encouraged uniform flower-panicle formation, improving the outlook for nut formation, kernel size and outturn if conditions persist. However, the crop remains at an early stage: final yields will depend on the rest of the flowering, fruit-setting and nut-development phases through to the October–November harvest window.
On the demand side, international interest in kernels for snack and confectionery use remains steady, particularly in Europe and Asia, where cashews are embedded in premium nut mixes and bakery applications. While high food inflation in some consumer markets could cap aggressive price gains, prevailing price levels and modestly firmer offers suggest that buyers are still willing to pay for quality, especially for standard W320 and larger whole grades.
Weather Outlook for Key Origins
Short-term forecasts for southern Tanzania and northern Mozambique into early August point to the continuation of predominantly dry, seasonally cool conditions. This should extend the positive window for flowering and early nut development, provided extreme heat spikes or unseasonal rainfall do not emerge. Any shift to wetter, more humid weather later in the flowering cycle would increase disease risk and could raise input costs for growers.
Given the current stage of the crop, market participants should monitor updates on August and September weather closely. If the present benign pattern holds, East Africa could contribute a larger and better-quality off-season crop into global supply during late 2026, potentially easing pressure on kernel prices in early 2027.
Fundamentals & Market Drivers
- East African crop potential improving: Tanzania and Mozambique together represent a growing share of Southern Hemisphere cashew supply. The favourable July pattern lowers near-term production risk for the 2026–27 crop and hints at upside potential for yields and kernel recovery rates.
- Quality and outturn prospects: Dry, sunny conditions with no extreme heat should translate into better nut fill and kernel size distribution if maintained, improving processor margins and enhancing supply of premium grades.
- Steady global demand: Structural demand growth for tree nuts in health-oriented and convenience snacks underpins baseline consumption, even as some price-sensitive buyers may trade down from premium to more affordable grades or blends.
- Mildly firmer price structure: The small but broad-based uptick in kernel prices across India, Vietnam and EU warehouses in July suggests a market that is balanced to slightly tight in the near term, with limited pressure from new-crop arrivals until East Africa’s harvest later in the year.
Forecast & Trading Outlook
With the East African crop still several months from harvest and current weather strongly supportive, downside price risk for cashew kernels appears limited in the short run. At the same time, the absence of major weather shocks or demand surges argues against a sharp rally, pointing instead to a gradually firm to sideways price path into early Q4 2026.
- Buyers (roasters, packers): Consider covering a higher share of Q4 2026 needs on current dips, especially for W320 and W240, while retaining some flexibility for opportunistic buying if East African crop prospects continue to improve.
- Origin sellers (India, Vietnam, East Africa): Maintain price discipline on prime grades given supportive fundamentals, but be prepared for more competitive pricing on broken and pieces grades if demand for value segments softens.
- Speculative participants: Bias modestly long in kernels on any short-term weakness, with clear exit levels in case of a negative weather surprise or abrupt demand slowdown.
3-Day Price Direction (EUR-based)
- India (FOB kernels): Stable to slightly firmer in EUR as offers remain supported by steady export demand.
- Vietnam (FOB kernels): Mostly steady, with a mild upward bias for standard grades if buyers advance Q4 coverage.
- EU (FCA Netherlands): Sideways to slightly firmer, reflecting limited nearby availability of preferred whole grades and ongoing restocking demand.