Despite recording double-digit export growth in the first half of 2024, the cashew industry is facing price fluctuations and raw material supply.

Cashew exports grew in double digits

The Import-Export Department (Ministry of Industry and Trade) cited statistics from the General Department of Customs as saying that it is estimated that in June 2024, Vietnam's cashew exports will reach 65 thousand tons; worth 388 million USD, down 4.0% in volume, but up 4.8% in value compared to May 2024, up 8.4% in volume and up 13% in value compared to the same period last year. In the first 6 months of 2024, Vietnam exported cashew nuts reaching 350 thousand tons, worth 1.92 billion USD, up 25% in volume and 17.4% in value compared to the same period last year.

The source of raw materials for processing up to 90% depends on countries supplying raw cashew nuts from Africa and Cambodia.

In June 2024, Vietnam's average cashew export price is estimated to reach 5,973 USD/ton, up 9.2% compared to May 2024 and up 4.2% compared to June 2023. However, cumulatively in the first 6 months of 2024, Vietnam's average cashew export price is estimated to only reach 5,496 USD/ton, down 6.1% over the same period last year.

Type structure in the first 5 months of 2024, Vietnam mainly exports 3 types of cashew nuts W320, W204, W180; with a proportion accounting for 68.85% of total turnover and recording high growth compared to the same period in 2023.

Specifically, in the first 5 months of 2024, W320 cashew exports reached 105.5 thousand tons, worth 610.76 million USD; increased 14.9% in volume and 7.3% in value compared to the same period last year. Vietnam's main export markets for W320 cashew nuts include: United States, Netherlands, China, Türkiye, Germany, UAE, UK...W320 cashew nut exports to the above markets all recorded positive growth.

In the first 5 months of 2024, Vietnam exported W240 cashew nuts reaching 46.89 thousand tons, worth 294.54 million USD, an increase of 44.1% in volume and an increase of 34.7% in value compared to the same period last year. . Vietnam's main export markets for W240 cashew nuts include: United States, China, Iraq, Turkey, Saudi Arabia, Mexico, Netherlands...

Although exports recorded double-digit growth in the first half of 2024, Vietnam's cashew industry is facing fluctuations in raw material prices. The Vietnam Cashew Association (Vinacas) said that recently; Vinacas received feedback from businesses about not receiving enough raw materials from partners in West African countries due to the sharp increase in raw cashew prices.

The reason is that cashew output in West Africa decreased and some countries such as Ivory Coast applied a policy of temporarily suspending the export of raw cashew nuts to support domestic cashew factories.

According to cashew industry businesses, although they signed a contract to buy raw cashews in the first quarter of 2024, however, in the past 2 months; Vietnam's cashew processing and export enterprises only received 1/3 of the contracted orders, but they were low quality cashew nuts that did not meet the signed quality standards. Not only that, the delivery price increased by nearly 40% compared to the previously signed contract.

Concerned about export orders at the end of the year

Although Vietnam is one of the world's leading countries in processing and exporting cashews, capable of processing 3.5 - 4 million tons of raw cashews annually, domestic supply is increasingly decreasing. Up to now, only about 10% of the demand for processed raw materials is met domestically, the rest must be imported, especially West African countries account for a large proportion, about 70 - 75% (equivalent to about 2.3 million tons/year).

Fluctuations in cashew prices and output will greatly impact the production, processing and export activities of Vietnamese enterprises in the third and fourth quarters of 2024. At the same time, it also makes it impossible for Vietnamese businesses to sign export contracts with purchasing units in the third and fourth quarters because the specific raw material prices and output of imported raw cashew nuts have not been determined.

Not only that, businesses have to face higher input material costs and at the same time have to ensure that selling prices remain competitive in the international market. This poses a big challenge for cashew export businesses, especially small and medium-sized enterprises with limited competitiveness.

Mr. Bach Khanh Nhut, Vice Chairman of Vietnam Cashew Association - said that fluctuations in raw cashew material prices have caused a change in the market demand structure. Accordingly, with higher prices, consumers may switch to using alternative cashew nuts or reduce consumption. This can reduce sales and affect the profits of cashew export businesses.

On the other hand, if cashew prices continue to increase sharply, businesses need to find ways to increase production productivity or find sources of raw cashew nuts from different sources to meet consumption demand. In addition, increasing the price of raw cashew nuts may also cause unfair competition problems. Businesses that export cashew nuts may face unfair competition from domestic producers or from other countries.

Faced with the above situation, Vinacas has written a petition to the Government and relevant ministries to remove difficulties for the cashew industry, including influencing African countries to lift the ban on raw cashew exports. To the Ministry of Agriculture and Rural Development, Vinacas proposed paying attention to developing cashew raw material areas and developing high-quality, high-yield cashew varieties. This will help cashew processors reduce their dependence on imported sources.

Source: Cong Thuong Newspaper