In India, forward price of W320 is still on increase. September first week contracts of premium W320 is possible around 8400+CST or 8300+VAT/11.340 kilo/Goa-Mangalore.
Festive demand may continue for next two months.
Global prices may also remain firm for next 2-3 months even if the Rio Olympics concludes in few days.
After the New-Year, cashew market usually enters the slack period. Indian GST rate will influence the market sentiments during this year’s slack period.
Current tax rate in South India is only 5.5% VAT with in state or 2% CST (Central Sales Tax) on interstate sales. GST (Goods and Service Tax) may come in to effect from April 1, 2017 but the Indian cashew industry thinks that the tax rate will be around 18%.
18% – 5.5% = 12.5%. This will be the difference which traders and consumers have to bear in future. If a trader from Bangalore purchases a kilo cashew kernel with in the state in December and sells it in April 2017, this much extra burden will fall on him!
So when the Diwali sale ends, the impact of GST rate will direct the future course of the Indian raw cashew as well as cashew kernel market. And the usual slack period may continue in the Q1 of the new fiscal year as one of the worst ever slack period.