Tanzania’s Cashew Exports Suffer as Demand From Vietnam Slows Down Temporarily

Disappointing Exports to Vietnam

Virtually all of Tanzania’s cashews are exported to Vietnam and India. Vietnam’s market share in Tanzania’s RCN exports was 58% in 2021 and 78% in 2020 and it is Tanzania’s most important export market by far. Currently, Vietnam has large cashew inventories available, which is leading to reduced demand, and a drop in Tanzania’s exports during their main export season.

From September, when the harvest started in Tanzania, until February, Vietnam imported only 70,158 mt of raw cashew nuts (RCN) from Tanzania. This is much lower than last year when 154,930 mt of RCN were imported from Tanzania over the same period. In fact, in four of the last five years, Vietnam already imported more than 100,000 mt from Tanzania between September and February.

*Tanzania’s RCN exports to Vietnam were only 353 mt in 2018. A government policy to raise domestic prices of cashews resulted in Tanzanian cashew being overpriced in the international market.

Vietnam's Demand Could Bounce Back, but Tanzania’s Export Window is Closing

Vietnam stocked up on cashews throughout 2021 when prices were relatively low. Over the last 12 months, ending February, Vietnam imported 3,078,140 mt of RCN, which is an estimated 693,000 mt of cashew kernels. Vietnam exported only 606,057 mt of cashew kernels over the same period. This demonstrates the extent of Vietnam’s large supply of cashews available.

On the other hand, demand for cashews in the snack market remains strong, and Vietnam’s reduced import demand will only be temporary. Vietnam’s Interest in cashews for future delivery remains strong, but this falls outside of Tanzania’s main export window. A similar situation is playing out in India, where demand is reportedly weak for nearby cashew delivery, but buyers are interested in deliveries later in the year. Tanzania export on average 99% of its RCN to Vietnam and India, and the export window to India is also closing.

Tanzania is the Southern Hemisphere’s largest cashew producer, and the peak export window is from October to February. From March, cashews from the Northern Hemisphere, which supplies 86% of the world’s cashews, come to the market and will reduce the competitiveness of Tanzania’s cashews.

The poor demand in Tanzania’s main export season will be disappointing, especially since the 2021/22 crop is turning out better than initial estimates of 220,000 mt. According to the Bank of Tanzania, 224,893 mt of cashews were delivered by the end of December 2021, which means the crop will most likely be slightly higher than 225,000 mt when all cashew deliveries have been reported and added to the total.