Opinion

Vietnam Cashew Exports Increasing in Volume at Low Prices

Raw Cashew Nut
Cashew Nut Kernel
Vietnam
Published Sep 30, 2021
Vietnam’s cashew export volume increased, but the export value gains haven’t met the target. Vietnam exported 273K metric tons of processed cashew in the first semester of 2021, corresponding to a 21.8% increase from last year. However, during this same period, exports were worth USD 1.647B, corresponding to a 10.8% decrease in the export price from the previous year. This has become a problem for the Cashew industry in Vietnam, as raw cashew imports are still increasing, resulting in a trade deficit for the country.

Vietnam had a share of 66.6% in the global cashew kernel exports during 2020, which had a value of USD 2.84 billion. According to data from the Vietnam Cashew Association, Vietnam’s export target for 2021 stood at USD 3.6 billion, an increase of 12.9% from 2020. However, the first-semester exports numbers show that Vietnam hasn’t been able to increase its value on processed cashew products. Furthermore, its increase in production for raw cashew has stayed steady while imports have skyrocketed, reaching record-high numbers.

Decrease in Cashew Productivity is Driving Accelerated Increase in Imports

In 2020, Vietnam’s cashew production totaled 339,800 tons for a yearly increase of 53,500 tons, with average productivity of 1,123 kilograms per hectare. The total cashew planting area in 2020 is estimated at 302,500 hectares and has had an increase of 5,300 hectares from the previous crop year. Thus, the cashew harvest in the 2020/21 crop year was a decent year in volume. However, prices for procuring fresh cashew have been on a decreasing trend for a year now, reflecting a decrease in the crop’s productivity. Today, fresh raw cashew prices in the Vietnamese wholesale markets range from USD 1,050 to 1,114 per ton.

As the processing capacity of Vietnam exceeds the raw cashew crop, Vietnam imports the fruit primarily from Ivory Coast (35.6%), Cambodia (19.5%), Ghana (14%), and Nigeria (10%). In the first six months of the year, Vietnam’s imports of raw cashews reached a record high semester with 1.7 M tons exported with a value of USD 2.6 billion, an increase of 168% and 227.3% respectively. The fact that Vietnam is the largest importer of raw cashews and the largest exporter of cashew kernels, has made the industry sensitive to import prices from its suppliers.


Source: Tridge

Cambodia was the largest supplier of raw cashews to Vietnam in this first semester, accounting for 1M tons (59.2%) with a value of USD 1.698 billion. Vietnam has exponentially increased its imports from Cambodia in what goes for 2021 to satisfy its processing demand at a price similar to their own domestic one. However, the average price of Cambodian imported cashew has gone from USD 1,200 to USD 1,675 per ton due to the increasing demand for cashew products globally.

Increasing Volume and Markets While Demand is Booming and Prices are Low

The cashew industry is experiencing an increasing consumption of cashew nuts worldwide, and the export of cashew kernels has significantly increased. Vietnam has increased its exports of processed nuts in recent years and possesses 66.6% of the global export market. For the first six months of 2021, Vietnam has increased its exported volume to 21.8% from the previous year and is forecasted to surpass by at least 20% the 464,000 tons exported in 2020. However, the export price of the processed cashew has decreased considerably this year, not allowing the value to grow.

Export prices are expected to increase for the second half of the year, and exporters hope to compensate for the low value in the first half. In the meantime, with a lower price, they have penetrated markets and increased their volume in their traditional markets. For the first six months of the year, the US (26.8%), China (17.7%), and the EU (20.5%) continued to be the top three markets for Vietnamese cashew kernels, all exhibiting solid growth. Vietnamese exports have also grown considerably in other markets like Russia, where it has increased 72% in volume and 29.2% in value compared to the same period in 2020.

Focus on Increasing their Value Chain

While exports of processed cashew keep raw cashew from its main suppliers keep ascending, Vietnam will continue to have a cashew deficit. The Vietnam Cashew Association forecast shows that raw cashew imports will reach nearly 2M tons in 2021 to satisfy the processing demand. Therefore, the Vietnamese industry would need to focus on increasing the value chain of its cashew industry by using more modern processing technologies. The average export price of Vietnamese processed cashew is around USD 10 per kg, while the average export price of other supplier countries is USD 20 per kg. This means that by upgrading the quality of the process and finished products, the export value would be able to increase.

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