Vietnam, the world’s largest exporter of cashew nuts, was witnessing a boom in cashew exports and was anticipating an increase in the volume of exports over the next decade. According to Vietnam’s Ministry of Industry and Trade, cashew exports are forecast to grow by 4.6% per year between 2022 and 2027, keeping in mind the worldwide trend of vegan and plant-based diets favouring alternative protein sources. The country already accounts for more than half of the world’s processed cashew raw materials. In 2021, Vietnam exported 579,773 million mt of cashew, worth about USD 3.64 billion in revenue. The volume recorded a YoY increase of 12.6%, whereas the revenue from cashew exports recorded a YoY increase of 13.3%. Of the total cashew exports, 176,363 mt were shipped to the United States; 85,162 mt were exported to China; 68,903 mt were shipped to the Netherlands; and about 21,200 mt were exported to Germany.
The year 2021 turned out to be a glorious year for cashew nut exports, but this year seems to be a difficult year. In the first seven months of 2022, Vietnam’s cashew exports reached only 294,000 mt, a YoY decline of 10.5% in volume. According to the trade ministry’s import-export department, even the revenue earned from exports declined by 12.1%, despite higher prices in the global market. Given the slow start to the year, the association has also lowered the sector’s 2022 export target from USD 3.8 billion to USD 3.2 billion. Exports to the United States, Vietnam's largest cashew nut market, totaled 88,254 mt in volume and USD 510.53 in value, representing a YoY decrease of 12.8% and 11%, respectively. Cashew exports to countries in the European region reached 62,258 mt and USD 356.2 million, which is a YoY decline of 12.4% in volume and 10.7% in revenue. The average export price in the US was around USD 5,784.8 per ton, up by 2.2%, while for the European market it stood at USD 5,732.9 per ton, up 1.9% over the last year.
Vietnam's Cashew Exports, January to July (2021 and 2022)
Source: Ministry of Industry and Trade, Vietnam.
Despite higher prices, it is anticipated that cashew exports will continue to struggle in the coming months as inflation pressure prompts consumers in importing countries to tighten spending. The Vietnam Cashew Association has projected that cashew exports will continue to drop in the following months, even until the end of the year 2022. The war between Russia and Ukraine pushed up fuel prices and inflation. The dollar was strengthening and the domestic currencies of the importing countries depreciated, especially in the European Union. High inflationary pressure has resulted in tight spending and cashew nuts' not being an essential food, which has had a synergistic and direct impact on cashew kernel consumption. With the given issues, the outlook for the upcoming year remains weak and there is little to no hope for exports to pick up any pace in the months ahead unless the inflationary pressures get controlled.