After many years of being passive in the price of imported raw materials and the price of cashew kernels for export, Vietnam’s cashew industry is trying to change the situation by adjusting import, production, and export plans.
The position of the cashew industry was one of the hot topics at the conference summarizing the activities of the cashew industry in 2022.
Accordingly, despite holding the world's No. 1 position in terms of raw cashew imports, production, and export of cashew kernels, Vietnam cannot take the initiative in terms of imported raw cashew prices and export kernel prices. This has led to unreasonable prices of the world cashew market.
Specifically, in 2022, all traditional export markets of the cashew industry declined in both quantity and price. Notably, the price of raw cashew nuts remained at a high level, while cashew kernels dropped sharply.
Besides, focusing only on a few traditional markets puts Vietnamese cashew businesses in a passive position and pressured by traders, intermediaries, and brokers. Most of the exported cashew products are still in the form of preliminary processing or have been processed, peeled, dried, vacuum sealed, and packed in raw form.
Furthermore, the number of enterprises that meet the strict requirements of quality standards of the import market is still limited. Only a few units have high-standard processing facilities such as BRC, SMECTA, and HACCP.
Trying to change the situation
Analyzing the global cashew market situation, Nguyen Minh Hoa, Vice President and Head of Policy Department of VINACAS, said that thanks to the increase in cashew acreage in countries in recent years, the supply of raw cashew nuts was abundant. The way of speculating on raw cashews like in previous years is no longer suitable. Meanwhile, African countries’ production capacity is insignificant, so the output for raw cashew is still mainly dependent on Vietnam and Vietnam also holds most of the world’s cashew kernel supply. The adjustment of the plan to import raw materials, production, and export will help Vietnamese cashew businesses change their position in the market.
Specifically, as long as Vietnam temporarily stops buying, the supply and demand in the raw cashew market will immediately be affected, pulling the price down. Similarly, Vietnam can reduce the supply to stimulate the price of cashew kernels.
Sharing this view, many large cashew enterprises have plans to turn the situation around. Ta Quang Huyen, General Director of Hoang Son 1 Company, said that Vietnam owned the world’s leading cashew processing technology.
This is the strength of fast production ability and large capacity. He thought that it was necessary not to maintain inventory anymore. When a contract is signed, they can buy raw cashews for production, instead of holding a bunch of cashew nuts and worrying about it when interest rates are rising.
Similarly, at Hanfimex Company, Phung Van Sam said that after the Lunar New Year, the cashew kernel market has not shown any signs of improvement, so the company would wait for new orders to buy raw materials and produce. Currently, Hanfimex only focuses on participating in the Gulfood Dubai International Food and Beverage Fair - the largest fair in the food industry in the Middle East region at the end of February to meet and retain the company's traditional customers.
Simultaneously, they want to grasp the situation of supply and demand as well as the requirements of the market to adjust their production and business plan. Besides, the company is trying to improve the quality and strengthen the deep-processed products, which is also the solution to bring higher production and business efficiency, and expand opportunities to penetrate new markets.
On the side of associations, to support the sustainable development of the cashew industry, Bach Khanh Nhut, Standing Vice Chairman cum Head of VINACAS Inspection Committee, requested the Ministry of Agriculture and Rural Development continuously support research and development of specialized technical standards and regulations for cashew nuts and by-products of cashew trees.
Along with that, the SPS Vietnam Office needs to coordinate with relevant agencies and associations to support cashew businesses in implementing new regulations on food safety control in foreign markets, especially China, the EU, and the US.
Read more: Agricultural Products Industry Report