Cashew sector gets modest profits in global value chain

Chairman of Vietnam Cashew Association (Vinacas) Nguyen Duc Thanh says last year, Vietnam still maintained its market share and gained more than 50% of the global export value with US$5.5 billion to keep its leading position in cashew nut processing and export.

Cashew exports are estimated at 25,000 tons valued at US$256 million in January, up nearly 40% in volume and 56.5% in value against the same period last year.

Mr Thanh attributed the achievement to great efforts of businesses and persified markets, and the consistent government policies to encourage and facilitate the sector’s operation.

Last year, Vietnam shipped cashew products to 92 markets and secured good market shares in the US, Netherlands and China. New high-growth markets among ASEAN countries have been set up, particularly Thailand with a growth of more than 40% and Singapore, over 20%.

The government’s consistent policies have facilitated cashew exports, creating favourable conditions for exporters of processed cashew nuts and importers of raw nuts. As a result, 95% of the processed cashew nuts are exported and only 5-6% are sold in the domestic market.

However, Mr Thanh says, only a small number of Vietnamese businesses are benefited from the global value chain. Cashew growers just enjoy 18% of profits in the value chain while processors and exporters get approximately 10% and the rest go to foreign retailers and supermarkets.

In sum, the total profits that Vietnamese cashew growers, processors and exporters get from the value chain are about 40% although they have poured much investment, sources and capital into the business. Meanwhile the remaining 60% of profits go to foreign processors and supermarket owners.

To improve the situation, Vinacas has launched a program to stimulate domestic consumption while encouraging businesses to process instant products. Over the last two years, a large amount of salty roasted, honey roasted and wasabi cashew nuts have been exported to China. They are also much sought after by Australian and Japanese customers.