Cashew Industry for stable solutions for raw material

Vietnam cashew industry is faced with great difficulties in shortage of raw materials.

The shortage of raw material - the weakness of cashew industry

According to the Vietnam Cashew Association (VINACAS)’s report, by the end of November 2017, the amount of Vietnam’s cashew exports in 2017 reached nearly 333,000 tons, increasing 2.89% over the same period of 2016, valued at more than 3.31 billion USD, up 26.2% over the same period in 2016. Along with the traditional export markets are the US and China, in 2017, cashew exports increased in proportion to EU countries posted growth of 9% in volume and 34% in value. The above results helped Vietnam’s cashew industry to achieve 12 consecutive years of maintaining the No. 1 position in exporting cashew nuts in the world, with cashew nut production accounting for over 50% of global value and trade total.

However, Nguyen Duc Thanh, Chairman of VINACAS said, despite the Vietnam cashew industry developing strongly and continuously leading world exports in the recent years, it is still faced with the problem that it is difficult to depend on raw materials imported from African countries because the domestic production only meets about 20-35% of enterprises’ processing needs. Specifically, in the past 11 months, Vietnamese enterprises have imported over 1.2 million tons of raw cashew, valued at over $ 2.4 billion, up 23% and 55% respectively in volume and value over the same period last year. According to Mr Thanh, when importing raw cashew nuts from Cambodia, businesses are facing a lot of risks due to the difficulty in controlling the quality of inputs, because many of the imported goods fail to meet the quality requirements. Taking long time delivery, risk in payment ...

In particular, in recent years the raw cashew nut supply had not increased causing difficulties for cashew processing enterprises in Vietnam. VINACAS's report also shows that while Vietnam's cashew nut export price increased only 22% on average, the price of raw cashew nut imports increased by almost 24%.

Developing raw material areas in Cambodia

While the expansion of cashew area in Vietnam has met difficulties due to the lack of land and competition with many other crops, the VINACAS leader said that Cambodia is one of the countries that have good quality of raw cashew due to the advantages in climate conditions and good breeding stock so cashew crop yield in Cambodia is quite high. In particular, the Ministry of Agriculture, Forestry and Fisheries of Cambodia is very interested in developing cashew farming to improve farmer’s lives. Recently, VINACAS surveyed working with the Ministry of Agriculture, Forestry and Fisheries Cambodia, and some Cambodian companies proposed to cooperate and plant 500,000 hectares of cashew in Cambodia to produce raw materials estimated at 1 million tons for the future. VINACAS and other cashew processing enterprises in Vietnam will commit to purchasing all the raw materials that Cambodia produces.

Hean Vannhorn, the country's chief of agriculture, the Cambodian Ministry of Agriculture, Forestry and Fisheries, said more than 100,000 hectares of rice are now being harvested. Land for expansion of cashew production in Cambodia is still very large. However, the cooperation between the two sides to win as well as to attract the participation of farmers, Oknha Leng Rithy, representative of the Cambodian business community expressed their desire to be assisted by VINACAS in selecting breed, supporting cultivation techniques, to ensure productivity and quality, as well as profit for farmers when participating.

Last weekend, to realize this plan, the working study and support group for development of Vietnam - Cambodia of VINACAS was launched. At the same time, VINACAS donated 1.5 billion VND to support the development of 1 million cashew trees in Cambodia in the period from 2018-2022.

It is known that from 2014 onwards, Cambodian raw cashew exports to Vietnam only accounted for 30%, but in the last two years this number has risen over 90%. In 2016, Cambodia produced over 104,000 tonnes of cashew nuts, of which the cashew processing business of Vietnam has purchased 100,000 tons. Cambodia is the fifth largest supplier for raw cashew in Viet Nam.

According to Mr Dang Hoang Giang, vice president of VINACAS, he estimated that with the production of 1 million tons of raw material, Cambodia will be the world's largest producer of raw cashew nuts. Due to the Cambodia’s Commitment and the geographical advantage, Vietnam cashew industry hope to solve the problem of today’s raw material shortage.