| The market is awaiting the final decision of the Trump administration on the import duties into the US. That decision will be leading the market on the short to medium term. CNBC and Reuters are reporting that a deal has been struck at 20% for products directly from Vietnam while shipments from third countries through Vietnam will face a levy of 40%. This might have a significant impact on shipments to US as import duties will be 10% higher than where they are today. Who will pay for those extra costs is the big question mark. Most probably it will be shared between packers and importers in a certain way as a total increase of 20% in a couple of months will not be shown on the shelf all at once. Due to the higher prices demand might be hit and Vietnamese packers to lower their prices to keep the interest. Before this news came out, prices of RCN were coming down a bit already as Vietnamese packers were not showing heavy interest for RCN while US kernel demand is down. We will have interesting weeks ahead of us as we don’t know yet what the import duties will be for the African cashew processing countries. Will they have an advantage over Vietnam? Usually prices for African product are slightly higher than Vietnam but will this ‘gap’ be closed with the difference in duties? Our recommendation remains to follow this market closely and take hand to mouth cover for the time being until all information is known/available. |
