According to Mr. Bach Khanh Nhut - Vice President of the Vietnam Cashew Association (Vinacas), although for many years Vietnam has been leading the global cashew supply chain and value chain, the position of Vietnam is being seriously shaken due to the permission to import cashew kernels into Vietnam without applying together measures to protect the domestic cashew processing industry. 
Also read: Vietnam remains the world’s largest producer and exporter of cashew nuts in 2020 » Breaking News, Latest World News Updates - VietReader Viet Nam

Currently, Africa's cashew-growing countries are concentrating on developing their cashew processing industries while steadily decreasing raw cashew exports. Therefore, they offer many preferential and supportive policies to attract investment in cashew processing factories. At the same time, with the export of raw cashew nuts, they strictly regulate and monitor the minimum export price and impose high export taxes. But with export kernels, they are tax-free. Meanwhile, both raw and kernel cashews imported into Vietnam for processing and export are exempt from tax. 

According to Vinacas, such policies of the two countries lead to inequality in trade, creating favorable conditions for cashew nuts from Africa to be imported into Vietnam, bringing significant risks to the entire cashew industry in Vietnam. Currently, Vietnam only performs 1 to 3 last stages (about 20% of the whole processing line if counting from raw cashews), even only packing into new packaging, so the added value is not significant. 

Vinacas analyzed that, if this business method is to develop, large processing enterprises in Vietnam will also change direction to survive. Since then, production has to be narrowed down in the direction of focusing on the last few stages, eliminating the cost of most of the invested modern lines (each modern factory usually has to invest from 100 to 500 billion VND). Many workers and workers will lose their jobs. 

In contrast, existing companies in Africa through Vietnam that can sell goods and have high profits will continue to invest. Other companies also invest in new factories. The cashew processing industry of these countries will thrive from the permissiveness of the Vietnamese market and the unfair competition between processing enterprises in Africa and Vietnam. 

From there, these factories will gradually block the source of raw cashew nuts from Vietnamese factories to meet the needs of local processing, causing small and medium-sized factories in Vietnam to go bankrupt. Next, they rise to master technology and equipment, improve quality, and gradually occupy the world cashew kernel market. 

Cashew kernels imported into Vietnam and then exported will compete directly with domestic raw cashew nuts because the processing and import costs are not high, so it is easy to adjust the selling price. This will put the domestic raw cashew price under great downward pressure. 

Processing factories are increasingly under pressure to switch to using imported cashew kernels instead of processing from raw cashews due to lower processing and management costs because they only have to do about 20% of the work compared to processing from raw. Time to complete products to deliver to customers faster. Less material stock, shorter so use less capital, faster turnaround. 

Therefore, Vietnamese raw cashew nuts will be increasingly difficult to consume. On the other hand, Vietnam's processing factories gradually reduce production, leading to a narrowing of raw material areas, affecting hundreds of thousands of cashew farmers. 

Read more: Difficulty of cashew industry in Vietnam » Breaking News, Latest World News Updates - VietReader Viet Nam 

Facing these difficulties, Vinacas urgently requests ministries, branches, and the Government to early negotiate and sign bilateral agreements with each country on import and export tax exemption for each other's goods; including that your country is exempt from tax on raw cashews exported to Vietnam. 

“If the partner disagrees, the Ministries, Sectors, and Government are requested to consider and apply the principle: No import tax exemption for cashew kernels imported into Vietnam; Imposing an export tax of 25% on shelled cashew nuts according to the Preferential Import Tariff under Decree 57/2020/ND-CP dated 10/07/2020; Apply the minimum import price for cashew kernels imported into Vietnam”, Vinacas suggested. 

A Vietnamese enterprise almost lost five export containers of cashew nuts 

According to Vinacas, in August 2022, a Vietnamese company exported five containers of cashew nuts to Algeria through intermediaries located in South Africa. The South African intermediary company only deposits 10% of the value of the goods and pays the rest when the goods arrive at the port. 

However, when the goods arrived at the port of Mostaganem, the customer company Eurl ATS Food (Algeria) could not go through the customs clearance procedures because they were included in the list of commercial fraud by the Algerian Ministry of Trade in June 2022. 

After that, Vietnamese enterprises and shipping lines did procedures to change consignees at the request of intermediaries in South Africa, but Algerian customs did not accept them. 
According to the port of Mostaganem customs, the company Eurl ATS Food lost its legal capacity to carry out procedures such as import, exchange for replacement goods, or re-export of goods. The goods have been at the port for more than five months, according to Algerian customs regulations, they are entitled to auction this number of containers.

Before the above incident, Vinacas asked the Vietnam Trade Office in Algeria to contact Algerian customs to cancel the auction for public funds. As a result, Vietnamese businesses are completing procedures to return goods to Vietnam.

Also read: 
- VN cashew processors face difficulties with raw material imports (vietnamnet.vn)
- Cashew industry faces huge challenges | Business | Vietnam+ (VietnamPlus)