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  • Difficulties facing this sector in 2017

    Feb 24th, 2017

    To achieve the exports target of $ 3 billion in 2017, this sector must overcome difficulties such as lack of raw materials production, the risk from import contracts and pressure barrier from the export market.

    Lack of material things

    As expected of the Vietnam Cashew Association (Vinacas), the country will export 360 thousand tons of cashew nuts in 2017, with a turnover of $ 3 billion.Recently however, VINACAS said crude stockpiles in the country to early 1/2017 relatively low, while the crop forecast this year to late. Notably, harvest conditions in Binh Phuoc will offer at the end of February (Lunar) in 2017, but output is difficult to assess by weather factors, especially weather phenomenon characterized ENSO this year.

    To face difficulties producing the material shortage, VINACAS said that businesses will have to balance and import more raw materials for production until the beginning of the 2017.According to statistics from the General Administration of Customs, the accumulated from January to mid-February, of which Vietnam's exports to nearly 22 thousand tons, equivalent to 198 million dollars. However, Vietnam spent 172 million US dollars to import nearly 68 thousand tons of material things. Accordingly, the amount it imported more than 3 times the amount it exports.Earlier in 2016, Vietnam has imported a greatest thing ever, with more than 1 million tons, up 14% over the previous year and more than 3 times the amount it exports.

    Risks when entering it

    Department of Agro-forestry, aquaculture and salt production (CBNL & TS) quoted VINACAS said, the import of large quantities of crude has entail potential risks for businesses in the international payment problems.Specifically, many importers have signed with Vietnam, but not to perform the contract or delivery delays. Whereby local firms are forced to cancel the contract due to export cashew no raw materials for processing, affecting the reputation of the business.VINACAS said that this situation may continue in the future of domestic raw materials is insufficient to meet the needs of production.

    Competition in the export market

    According to statistics from the General Department of Customs, Vietnam cashew nuts were exported to 27 major markets in January this year. In particular, the United States, the Netherlands and China is third largest individual importer of Vietnam, accounting for over 60% of total exports.

    VINACAS forecast that demand for Vietnam in the major markets will continue to rise, but in each market with different difficulty levels.In particular, recently, a member enterprises VINACAS said supermarkets in the US will simultaneously increase prices from this month's articles. Price increases that could affect the purchasing power of domestic consumers.Besides, the Chinese market is likely to tighten the quota sale and purchase now pressed the payment through banks to control domestic taxes in the near future. This means cashew exports quota will increase with product quality requirements higher and higher.

    Meanwhile, a number of African countries are encouraging the production and processing of locally instead of exporting crude today. VINACAS said that if Africa is open production and market development, the ability of Chinese traders to penetrate this sector is huge, leading to the risk of losing export market share of Vietnam's conditions.

    Source: VietnamBiz / PL.XH