Understanding Cashew Industry in Vietnam

Published 2021년 6월 1일

Cashew nuts are either traded as raw (in-shelled) or cashew kernels (shelled) worldwide; Vietnam dominates the global trade on both products. Vietnam is the largest importer of raw cashews and the largest exporter of cashew kernels, sourcing the raw cashew from African countries, processes it locally, and exports it worldwide. The most popular destinations for processed cashews from Vietnam are the U.S, Netherlands, Germany, U.K, and Canada.

Vietnam is the largest producer and exporter of processed cashew nuts globally, with more than a 52% share in global production. Cashew nuts are an essential income source for thousands of farmers in Vietnam who are the fundamental pillar of the industry as cashew production is a labor-intensive manual process. Vietnam also produces raw cashews over 300,000 ha of land in the southern provinces of Binh Phuoc, Ba Ria Vung Tau, and Dong Nai; Phu Yen and Binh Dinh provinces in the central region Central Highlands province of Dak Lak with estimated average productivity of 1,000 kg/ha.

Vietnam's raw cashew imports to meet local processing capacities

Vietnam is the largest importer of in-shell raw cashew nuts globally, with more than 50% share in the global value of raw cashew imports. As the processing capacity of Vietnam exceeds the raw cashew crop, Vietnam imports the fruit primarily from African countries. Last year, Vietnam imported shelled cashews worth USD 197 million, primarily from Ivory Coast, Cambodia, Ghana, Tanzania, and Nigeria.

The raw cashew nut market in Vietnam is quite competitive. Ivory Coast has been the dominant exporter since 2016. However, Nigeria's exports jumped with a total growth of 89.7% in 2019 and. The country also started importing raw cashews from Mozambique as the export volumes surged by over 9500% during 2020. Vietnam imported 1.19 million tons of raw cashew in the first four months of 2021, a sharp increase of 300% compared to the same period in 2020. The amount of raw cashew imports in the first four months of this year is almost equal to the total imports. As per the Vietnam Cashew Association forecasts, raw cashew imports will reach nearly 2 million tons in 2021.

Source: Tridge.

Where do Vietnam’s processed cashew nuts go?

Vietnam had a share of 61.6% in the global cashew kernel exports during 2020, which had a worth of 1.99 billion. The country mainly exports cashews to developed countries like the U.S, Netherlands, Germany, U.K, and Canada. The U.S. was the largest importer of Cashew kernel from Vietnam, with a share of 49.2% of the total exports from Vietnam. In 2020, lockdowns and severe outbreaks of COVID-19 in the U.S and EU led to an increase in the need for essential food reserves, and the demand for luxury snacking items like cashew nuts fell.

During the first four months of 2021, Vietnam’s cashew nut exports reached 152,000 tons, worth USD894 million, up by 8.6% in volume compared to the same period last year. The US, China, and the EU continued to be the top three markets for Vietnamese cashew, accounting for 26.8%, 17.7%, and 20.5% of the total export value of the cashew nuts during this period.

Source: Tridge.

The Vietnamese processed cashew market is projected to record a CAGR of 4.8% between 2020 and 2025. The rapidly expanding cashew processing factories in Vietnam are promoting more raw cashew imports. There are about 500 cashew processing factories in Vietnam that can process more than 4 million tons. The large-scale production facilities and plentiful labor give it a competitive edge over other cashew-processing countries. The country invests heavily in mechanizing the entire cashew processing to save on work and bring consistency and cost competitiveness. The country has enormous market potential and can expand its processed cashew export destinations in the coming months.