Cashew industry lowers export targets due to difficulties

VCN - Cashew nut exports since the beginning of the year have faced many difficulties, leading to a decrease in export turnover. Commenting that the situation in the second half of the year will not improve, the cashew industry has proposed to lower the export target for the whole year to US$3.2 billion instead of US$3.8 billion as originally set.
Proposing the establishment of bonded warehouse for cashew products in Binh Phuoc Proposing the establishment of bonded warehouse for cashew products in Binh Phuoc
Establish bonded warehouse for cashew nuts in Binh Phuoc suggested Establish bonded warehouse for cashew nuts in Binh Phuoc suggested
Cashew industry faces huge challenges Cashew industry faces huge challenges
Cashew industry lowers export targets due to difficulties
Processing and exporting cashews continue to face many difficulties in the second half of 2022. Photo: Internet

Exports decrease in both volume and value

According to data from the General Department of Customs, in the first five months of 2022, cashew nut exports reached 202,900 tons, worth US$1.21 billion, down 5.7% in volume and 5% in value over the same period in 2021.

In May 2022, the average export price of Vietnam's cashew nuts reached US$6,105/ton, up 2.4% compared to April 2022, but down 0.6% compared to May 2021. Generally in the first five months of 2022, the average export price of Vietnam's cashew nuts reached US$5,992/ton, a slight increase of 0.8% over the same period in 2021.

Mr. Ta Quang Huyen, Director of Hoang Son 1 Joint Stock Company, said that in the first half of this year, purchasing power was slower than in previous years. The reason is that in 2021, many customers in major markets have increased their reserve purchases due to concerns about the Covid-19 pandemic, which will lead to inventories extending into this year. In addition, consumers are forced to tighten spending on secondary products in the context of high inflation, which has also led to a decline in cashew nut consumption.

Mr. Huyen said that in the processing stage, enterprises are facing many problems with the high price of raw cashew nuts compared to the previous year. In addition, the cost of gasoline and transportation is increasing while the price of cashew kernels for export does not increase, which makes businesses face difficulties. In the cashew processing capital of Binh Phuoc, many small processing factories had to suspend production to cut losses. Meanwhile, large factories also reduced their capacity and process in moderation.

Looking at the overall "picture" of the cashew industry in the first half of this year, Mr. Tran Van Hiep, Vice Chairman of the Vietnam Cashew Association (Vinacas), said the developments in the world situation such as the Russia-Ukraine conflict and global inflation have a great influence on Vietnam's cashew exports. In 2021, Russia ranked 11th out of 104 export markets of Vietnam's cashew kernels with an export value of nearly US$62 million. Since the Russia-Ukraine conflict, Russia was excluded from the international payment system (SWIFT), so the export of cashew nuts to Russia faced difficulties in payment.

Besides, the issue of inflation in the US and EU caused people to tighten their expenses, Mr. Tran Van Hiep also mentioned the angle in another major market of Vietnam's cashew nuts, it is China, which still maintains the "Zero-Covid" policy. This makes the export of cashew kernels as well as other agricultural products continue to be at a disadvantage.

Lower export target

In 2022, according to the plan set out by the Ministry of Agriculture and Rural Development for the cashew industry, the export target is US$3.8 billion, an increase of US$200 million, compared to 2021. However, in the current difficult context, Vinacas has just proposed to adjust down the export value for the whole year to US$3.2 billion, down US$400 million, compared to 2021.

In the future, in order to ensure that it meets the standards of the export market, Vinacas asks the relevant authorities to update and guide the implementation of new regulations on food safety control in foreign markets; especially the Chinese, EU, and US markets.

“From the point of view of the consumption market, cashew businesses want the Ministry of Industry and Trade to support cashew businesses to participate in domestic and foreign trade promotion programs; strengthen information about markets, customers, consumption trends, commercial risks as well as effective ways to respond," said Mr. Pham Van Cong, Chairman of Vinacas.

With the Ministry of Agriculture and Rural Development, Vinacas proposed to continue to support research and development of specialized technical standards and regulations for cashew nuts and by-products of cashew trees to have a basis for quality assessment; it is necessary to evaluate and plan for the long-term stability of cashew growing areas. In the difficult situation to increase the cashew area in the country, it is necessary to have a solution to cooperate in exploiting and developing cashew material areas in Cambodia and Southern Laos to ensure the supply of raw materials for processing and export.

Emphasizing the information connection between stages in the value chain of the cashew industry, Mr. Vu Thai Son, Chairman of Binh Phuoc Cashew Association, said that the cashew industry has made a great contribution to the economic growth of Binh Phuoc when accounting for a third of the total annual export turnover. Binh Phuoc aims to increase the proportion of processing facilities with modern technology by 2030; deep processing of cashew kernels reaches about a third of the output; total export turnover reached an average of US$1 billion /year.

“In order to increase export turnover, both cashew growers and businesses need to continue to change and promote the link between producers and farmers and consumption channels. The Binh Phuoc Cashew Association is building data and forecasting for the cashew market to provide to cashew growers and businesses,” Mr. Son said.

By Thanh Nguyen/Bui Diep

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