Poor-quality raw material imports hamper cashew processing sector

Poor-quality raw cashew nut imports have been posing a threat to the quality and brand of final products and the domestic processing sector at large.
poor quality raw material imports hamper cashew processing sector

Cambodia was the largest source of raw cashew nuts for Vietnam in the first quarter of 2019, holding a proportion of 33.2 per cent in value, up 9.9 per cent on year.

Vietnam Economic Times cited statistics from the Ministry of Agriculture and Rural Development (MARD) as showing that Vietnam imported 224,000 tons of raw cashew nuts worth a total of US$389 million during the year’s first quarter, edging by 6.2 per cent in volume annually but falling by 19.5 per cent in value.

Cambodia was the largest source of raw cashew nuts in the reviewed period, holding a proportion of 33.2 per cent in value, up 9.9 per cent on year. The ASEAN member country was followed by Ivory Coast with the export value of US$47 million, representing a 1.64-fold rise per annum, and Indonesia with the export turnover of US$24.2 million, a 1.8-fold hike on year.

Vietnam is forecast to import 1 million tons of raw cashew nuts during 2019, according to the MARD’s Agro Processing and Market Development Authority (AGROTRADE).

The import of raw cashew nuts has soared in recent years whilst the trend remains on the rise. This surge was largely caused by a lack of domestic cashew output as local farmers are not keen on planting the trees due to a pragmatic plunge in cashew prices and profits as well.

The domestic prices of raw cashew nuts in the first quarter of this year halved on average compared to last year’s corresponding period. Fresh cashew nuts were reportedly sold on the spot at the prices of between VND28,500 (US$1.22) and 30,000 (US$1.29) per kg, and at VND30,000 to 32,000 (US$1.37) at processing facilities, much lower than the levels of VND40,000 (US$1.72) to 42,000 (US$1.80) per kg seen in 2018.

According to the AGROTRADE, raw cashew prices are set to fall over the course of the coming months. This can be attributed to the stock clearance of exporter Tanzania while other producers such as Ivory Coast, Nigeria, Benin, Mozambique, and Ghana are undergoing their harvest period.

The world prices of cashew nuts are predicted to bounce back in the second quarter of the year if the demand in China and other importers increases. According to the International Nut and Dried Fruit Council, the global cashew output is expected to touch 4 million tons in 2019, up by 300,000 to 400,000 tons against the previous year.

The majority of raw cashew nuts shipped to Vietnam were small-sized and poor-quality products, at cheap prices. Many had been harvested during previous crops, hence hampering the quality of processed cashew nuts.

Since the beginning of the year, local plant quarantine units have requested on-site testing and inspections of raw cashew batches imported from Africa, rather than testing them at processing facilities.

Hoang Trung, head of the MARD’s Plant Protection Department (PPD), said that since 2013 many batches of raw cashew nuts purchased from Africa have been found with Trogoderma SP worms which are subject to plant quarantine in Vietnam.

In April, Pham Van Cong, Chairman of the Vietnam Cashew Association (VINACAS), sent the PPD a document stating the opinion of VINACAS members that the changes in quarantine regulations have forced importers to pay additional costs for delivery and storage at ports. Moreover, importers have assigned staff to supervise the batches delivered to ports, thus increasing costs and reducing their overall competitiveness.

VINACAS asserted that raw cashews imported from Africa were newly harvested in the first quarter of 2019 or from the late-2018 crop.

The changes to quarantine regulations have caused damage to local importers and processors amid a number of difficulties facing the domestic cashew processing sector, VINACAS claimed, calling for the compliance with quarantine regulations as previously applied.

Source: VOV

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