Cashew is one of the largest import items in the first ten months of this year, but in the near future, Vietnam may lose a large supply.
Cashew is still high import value
Despite falling compared to 2017, cashew nut is still one of the four items with the largest import value. According to the General Department of Customs, in the first ten months of this year, Vietnam's cashew nut import was 1.06 million tonnes in volume and over $ 2.1 billion in value. Compared with 2017, the import of this item decreased by 10.4% in volume and 8.9% in value.
Vietnam is in danger of losing one of its major supplies of cashew kernels, Tanzania, as the Tanzanian government recently announced it would buy all of its cashew nuts from its 2018 crop.
Tanzania is the second largest market for Vietnam after Ivory Coast in the first nine months of this year. Vietnam cashew industry faces the risk of supply shortage - Photo 1.
Top ten biggest cashew producers in Vietnam in the first nine months of 2018. Source: AgroMonitor.
Tanzania's president, John Magufuli, has asked for a 94 percent increase in cashew nuts to protect farmers. With this move, Magufuli decided to buy about 220,000 tonnes of cashew nuts from farmers after private companies refused to buy at such high prices. Tanzanians will consume the cashew nuts they produce if they can not sell, the head of the country said. Traders argue that this could lead to a global supply shortage. Vietnam and India may be the first to suffer. Tanzania plans to buy all 2018 farmers, raising fears of shortages in the near future.
Meanwhile, Ian Dyas at CG Hacking Co. is concerned that Tanzania will not have sufficient logistics capacity to hold all 2018 cashew nuts (harvested from August to December). However, according to Deputy Secretary of Agriculture Tanzania Innocent Bashungwa, the government is capable of stockpiling and preserving all of the existing cashew nuts as well as the number of seeds in the population.
"Cashew nuts are a valuable agricultural commodity. Therefore, we have to make sure we are well stocked before selling to the market. The army will be mobilized during the process of purchasing, transporting and storing the cashew nuts in safe storage, "Bashungwa said.
The International Commission for Dried Fruit and Fruits says Tanzania exports 75% of its annual cashew production. According to official figures, the country's exports of cashew nuts doubled to $ 540 million in 2017, from $ 270 million last year.
Lack of supply, prices will increase sharply
This move raised concerns that the world market will be shortage of cashew in the coming time. If it can not reach buyers in Vietnam, there will definitely be a shortage of cashew nuts, said Sushant Gupta, director of ReloBridge Commodity Trading Company.
According to Dyas, prices of cashew nuts in two major cashew processing and exporting countries, India and Vietnam, will be pushed up by the new Tanzanian policy. It is said that no country harvested cashew nuts at the same time with this country so the risk of supply shortage is greater.
"In the short term, the price of cashew nuts will certainly increase, especially in India," Dyas saidAt present, the price of cashew kernel in the world market has dropped to $ 7,500 USD per ton, from $ 9,500 earlier this year.
In the domestic market, dry price was stable last month, with prices in Binh Phuoc at VND40,000 / kg, VND46,000 / kg in Dong Nai. Cashew price in Binh Phuoc stable, with the human W240 at 295,000 VND / kg; The human W320 at 285,000 VND / kg.
However, the price of dried in Binh Phuoc decreased
in the past 10 months, with the reduction of about 6000 to 10.000 VND / kg.The Ministry of Agriculture and Rural Development
recently forecast that cashew prices in the fourth quarter may increase as demand
usually rises at the end of the year.