Vietnam already the largest cashew nut exporter in the world, seminar hears, and the future remains bright overall.
The Vietnam Cashew Association (Vinacas) has said that cashew nut exports are expected to grow significantly in the years to come, especially to the US.
Vietnam has been the world’s largest cashew nut exporter for many years, with revenue reaching $2.5 billion last year.
According to Vinacas, demand, both abroad and locally, has increased strongly this year and cashew processors and exporters have worked to increase supply.
The US, China, and the Netherlands are the three largest cashew nut markets. This year the US surpassed China to become the largest buyer of Vietnamese cashew nuts, topping $1 billion in the first five months, Mr. Nguyen Duc Thanh, Chairman of Vinacas, told a seminar in Ho Chi Minh City on June 23.
Mr. Dang Hoang Giang, Deputy Chairman and General Secretary of Vinacas, said that Vietnam accounted for more than 50 per cent of the cashew nuts reaching the US and exported over 28,500 tonnes worth more than $220 million in the first four months of the year, an increase of 8.8 per cent in volume and 18.6 per cent in value year-on-year. Exports to TPP member countries now account for more than 50 per cent of the total, he added.
To further promote exports to the US Vinacas will send a business delegation at the end of the month to the World Nut and Dried Fruit Congress in San Diego.
Thanks to lower tariffs under the TPP Vietnamese firms will be able to increase their exports to member countries.
The industry needs to focus and improve quality and output of raw cashew nuts, however, as it still imports a large quantity from other countries, Mr. Giang said.
Mr. Vu Thai Son, General Director of the Long Son Joint Stock Company, said an increase in cashew nut output in Vietnam and Cambodia along with improvements in processing machinery and workplace skills would enable the industry to blossom in the next two to three years.
The fierce competition may results in falling profit margins, however.
Mr. Son and many others agreed that the greatest challenge for the industry is its dependence on raw cashew nut imports. According to Vinacas, Vietnam also ranks first in imports, which stand at 500,000 - 700,000 tonnes annually, mostly from Africa.
With the price of raw cashew nuts rising sharply since last year, many sellers in Africa have reneged on their contracts, demanding prices increase by $100-150 per tonne, or have delivered poor quality cashew nuts, causing difficulties for Vietnamese businesses, who in turn are competing with each other and offering higher and higher prices.
Delegates at the seminar suggested businesses report African defaulters to the association and boycott them.
Vietnamese businesses should cooperate to avoid any problems with imports, they added.