Cashew market steadies as weak demand meets tightening West African supply

The cashew market is currently balanced on a tightrope: raw nut prices have softened at some origins, but deteriorating quality, higher processing costs and tight kernel availability are keeping kernel prices steady to firm. Across the chain, participants report a divided picture. Raw cashew nut (RCN) trading in Vietnam remains active at slightly lower dollar levels, yet poor West African quality and lower outturns limit the flow of exportable kernels. Demand from the US and Europe is muted, while Asian and domestic buying helps to absorb some supply. Freight costs and geopolitical risks are adding a premium to landed prices, but so far this has translated into stability rather than a sharp rally.

Prices & Spreads

RCN prices into Vietnam have eased modestly but remain differentiated by origin and quality. Recent trades include Côte d’Ivoire 46/200 at about USD 1,440/t, Ghana 45/175 at USD 1,415/t and Benin 44/190 at USD 1,385/t, while higher-count lots such as Senegal 50/220 are around USD 1,590/t CAD. Second-crop deals from Senegal and Gambia are reported near USD 1,660/t CAD, reflecting both lower arrivals and quality risk.

Kernel FOB values are steady to firm across major grades. Indicative levels in USD/lb are: W180 around 4.20–4.60, W210 at 3.90–4.10, W240 at 3.35–3.55 and W320 at 3.05–3.25, with WS at 2.60–2.75, LP at 1.95–2.20 and SP at 1.40–1.60. Converting these benchmarks into representative wholesale-equivalent prices in Europe (approx. 1 USD = 0.92 EUR, including freight/handling), current working ranges are:

Platform indications in early June broadly align with this firm tone: conventional W320 kernels from India and Vietnam are offered around 6.80–6.90 EUR/kg FOB, while EU warehouse offers for WW320 in the Netherlands sit near 4.80 EUR/kg FCA, reflecting older stocks and local logistics structures. Organic differentials remain notable, with organic W320 from India near 8.50 EUR/kg FOB and organic WW320 in the EU around 5.90 EUR/kg FCA.

Supply & Demand Balance

West African supply is the main stress point. Arrivals in Senegal and Gambia are estimated about 30% below last year, roughly 75,000 t and 15,000 t respectively, with high moisture levels. This is lifting local RCN prices and discouraging aggressive kernel offers. Côte d’Ivoire’s campaign is winding down, but unsold, lower-quality stocks are accumulating as buyers grow more selective.

Nigeria’s market is underpinned by firm export interest and active aggregation, though quality varies widely by region, adding grading costs and rejection risk. Benin’s season is slowing, with trade shifting toward residual stocks and a strong focus on export standards. In India, kernel demand is quiet and importers show limited appetite for new positions, but they are still willing to pay resilient prices for high-outturn RCN from Senegal, Gambia and Guinea-Bissau at about USD 1,600–1,670/t for 52+ lb lots.

On the demand side, US and European kernel buying is clearly price-sensitive and subdued, in line with recent reports of softer snack nut demand and consumer downtrading. At the same time, Asian markets and some Middle Eastern buyers are providing a floor, preventing a sharp correction even as importers in mature markets continue to buy hand-to-mouth rather than build strategic stocks.

Fundamentals & External Drivers

Quality deterioration in West Africa is a central fundamental driver. Elevated moisture and uneven nut development are reducing outturns and pushing up processing costs, which in turn limits the supply of premium kernels. This quality squeeze explains why kernel prices remain firm even though RCN prices have eased slightly at some origins.

Freight is adding a non-trivial premium. Sea freight currently contributes roughly 0.02–0.03 USD/lb (about 0.04–0.06 EUR/kg) to kernel costs, and recent escalation in Middle East tensions has pushed container rates sharply higher on Asia–Europe and transpacific routes, with spot quotes up 25–50% month-on-month in early June. These increases validate market reports of around 20% higher freight to Europe and extend transit times from Vietnam by 10–25 days, tightening nearby availability.

Weather across the West African cashew belt is mixed. Seasonal rains are intensifying across Nigeria and surrounding countries, improving general crop conditions but also raising short-term risks of post-harvest quality losses where nuts are still being dried and stored. At the macro level, a strengthening El Niño is associated with elevated odds of extreme weather and rainfall anomalies, adding uncertainty to upcoming Southern Hemisphere crops. Regulatory risk is another watch point: ongoing US Section 301 investigations involving Vietnam, Nigeria and Cambodia could in theory lead to additional import duties, but cashew kernels may be exempted as a product not readily substitutable in the US market.

Market Sentiment & Risk Factors

Overall sentiment is cautiously constructive. Industry voices highlight a complex 2026 environment with currency volatility, quality problems and logistics disruptions weighing on trade, but they also emphasise the strong long-term fundamentals of cashews in health- and plant-based-diet trends. In the short run, weak kernel demand from the US and Europe is capping any strong upside, while supply-side and freight risks are acting as a floor under prices.

Key risks skew to the upside: any further deterioration in West African quality, logistical bottlenecks in Vietnam, or escalation in Middle East-related freight disruptions could quickly tighten nearby kernel availability and trigger price spikes, especially in large whole grades such as W240 and W320. Conversely, a negative demand shock in key importing regions or a rapid normalisation of freight markets would pose downside risks, but these appear less immediate.

Short-Term Outlook & Trading Recommendations

In the near term, the most likely scenario is a stable to slightly firmer market. Hand-to-mouth purchasing strategies by importers, combined with constrained availability of high-quality kernels, support a sideways bias in W320 and W240, with a modest upward tilt if freight or quality issues intensify. Fragmented quality in West Africa and the slow clearance of Ivorian stocks will keep processors cautious about forward offers.

• Importers (US/EU): Maintain staggered, short-cycle cover rather than large forward positions, but consider modest additional hedging on premium grades (W240, W320) for Q3–Q4 where logistics lead times from Vietnam are lengthening and freight remains volatile.
• Processors in Asia: Stay selective on RCN origin and quality, even at slightly lower prices; prioritise lots with proven outturns to protect kernel yield. Avoid overcommitting on low-priced but risky West African stocks.
• Retailers/Brand owners: Use current relative stability to secure promotional volumes, but build in flexibility on grade mix (e.g. shifting some demand from W240 toward W320 or WS/LWP) to manage potential supply tightness.

3-Day Regional Price Indication (Directional, in EUR)

• India (New Delhi, FOB/FCA): W320 conventional around 6.80–6.90 EUR/kg; tone stable to slightly firm as RCN quality concerns limit kernel discounts.
• Vietnam (Hanoi, FOB): WW320 near 6.80–6.85 EUR/kg; sideways bias, but tighter nearby shipment slots due to 10–25 day transit delays and higher freight.
• EU (Netherlands, FCA warehouse): WW320 around 4.80–4.90 EUR/kg and LWP about 3.35–3.40 EUR/kg; market stable, with potential mild firming if replacement costs rise further.