The cashew business establishes two new export records

Vietnam's cashew business experienced several obstacles in 2021 as a result of the Covid-19 outbreak and high shipping costs.

Mr. Pham Van Cong, chairman of the Vietnam Cashew Association, stated that as a result of the global spread of the Covid-19 pandemic over the last two years, VINCAS and cashew businesses have been unable to organize promotional activities, conduct market research, and scale up markets, particularly for deep-processed products. As a result, cashew production and export operations were contingent on the availability of markets and consumers.

Due to a lack of ships and containers, as well as high sea freight charges when importing goods from Vietnam, European and American importers have shifted their focus to cashew kernels imports from African cashew processing plants, particularly for shipments requiring immediate delivery, due to lower prices, shorter transport distances, and a lower risk of delay or slow delivery.

Although the volume of cashew imports from Africa is less than that from Vietnam, it remains an issue because the former's cashew processing facilities would seize more possibilities to expand exports to the country's two largest cashew markets.

On the other hand, rising shipping costs have prompted attention among importers, who must balance freight costs and frequently seek price squeezing.

In this environment, despite the challenging developments of the 4th Covid-19 wave, cashew nut processing and exporting firms continue to make efforts to sustain production and supply.

Additionally, new generation FTAs assist Vietnam's cashew business in growing exports to vital and future markets such as the EU, Russia, Canada, the United Kingdom, and Japan... Notably, the Vietnamese cashew sector continues to expand exports to the US market, the country's largest and most important export market.

According to the General Department of Customs, Vietnam exported 50.7 thousand tons of cashews in November, valued at USD 329.86 million. Cashew nut exports were around 531.5 thousand tons, valued at USD 3.34 billion, up 14.4 percent in volume and 14.7 percent year on year in the first 11 months of 2021.

The cashew business continued to export over 24 thousand tons of cashew nuts worth USD 150 million in the first half of December. Between January and mid-December, cashew exports totaled 555 thousand tons, valued at nearly USD 3.5 billion.

According to the aforementioned export figures, the cashew sector will set a new record for cashew exports in 2021. Previously, the biggest volume of cashew exports was 515 thousand tons in 2020. Not only that, cashew nut exports have topped 30,000 tons in 11 months, exceeding the 525,000-ton target set by the Ministry of Agriculture and Rural Development for the cashew business in 2021.

According to the Agency of Foreign Trade (Ministry of Industry and Trade), based on the achievements obtained in the first 11 months of 2021, cashew nut exports are expected to exceed the USD 3.6 billion target established for this year.

The evaluation is entirely justified since cashew nut exports had surpassed USD 3.5 billion by mid-December. In the first half of December, cashew nut exports generated USD 150 million; in the second half of the month, the cashew industry can achieve an export value of more than USD 100 million or higher, bringing the total value of cashew nut exports to USD 3.6 billion, surpassing the USD 3,514 billion achieved in 2017.

Along with rising global demand, the cashew sector has benefited from a small rebound in the average export price of cashew nuts from mid-2021 until the present (compared to 2020). According to the General Department of Customs, the average export price of Vietnamese cashew nuts was USD 6,505/ton in November 2021, a 1.6 percent intramonthly reduction but a 6.0 percent increase over October 2021. Vietnam's average export price of cashew nuts was USD 6,288/ton in the first 11 months of 2021, up 0.2 percent from the same period in 2020.

Maintain the stability of the material area

It can be concluded that cashew exports will expand significantly in value and volume in 2021, assisting Vietnam in maintaining its position as the world's number one cashew exporter since 2006.  On the other hand, raw cashew imports surged abnormally in volume and value in 2021. It demonstrates that, while domestic production of raw cashew nuts currently accounts for approximately one-fifth of the cashew industry's processing capacity, maintaining and stabilizing domestic cashew production is critical for the cashew industry's ability to partially control the source of high-quality raw materials.

Mr. Tran Van Hiep, deputy chairman and head of VINACAS's Trade Promotion Department, stated that due to limited land resources and the cashew plant having to compete harshly with other major export crops such as coffee, rubber, pepper, and fruit trees, the cashew industry in Vietnam's strategy is to maintain the existing area while increasing yield and quality of cashew nuts through technological advancements.

The cashew industry, with the backing of the government and MARD, is continually studying to enhance farming methods, choose suitable types for production, satisfy processing and export requirements, and adequately restore and replant ancient cashew lands. The tight collaboration between processors and farmers to develop local raw material regions to assure quality is particularly noteworthy.

Additionally, the cashew business is moving toward organic cultivation and excellent production methods, including post-harvest loss reduction initiatives in raw cashew production...

Additionally, the cashew business has strengthened collaboration with Cambodian partners to grow the cashew sector in Cambodia, to produce 1 million tons of raw cashew nuts in the shortest possible timeframe as specified by the Cambodian government.

In terms of processing, the cashew sector will focus on deepening processing and diversifying export goods, as well as increasing the local market in Vietnam, which has a population of 100 million. This is an extremely lucrative market, capable of supporting the consumption of 100% of cashews produced locally.

According to the Agency of Foreign Trade (MoIT), Vietnam's cashew export structure fluctuated in 2021. Apart from the primary kinds W320 and W240, the Vietnamese cashew industry promotes the export of high-quality cashews such as W180.

The cashew nut W180 saw the fastest increase in the first ten months of 2021, increasing 43.4 percent in volume and 56 percent in value over the same period in 2020, reaching around 15 thousand tons, valued at nearly USD127 million.

China is the primary export market for W180 cashew nuts, with 7.74 thousand tons worth USD 61.21 million, up 33.7 percent in volume and 53.2 percent in value over the same period in 2020; Israel is the second largest market, with 1.61 thousand tons worth USD 15.3 million, up 65.5 percent in volume and 59.3 percent in value over the same period in 2020.

In the first ten months of 2021, the average export price of W180 cashews reached USD 8,515/ton, an increase of 8.8% year on year. Which resulted in the average export price of W180 cashews reaching a record high in several destinations, including Canada USD 13,666/ton; Spain USD 11,463/ton; Hong Kong USD 11,264/ton; and Greece reached USD 10,814/ton.

Translated by Linh Linh