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  • It is about increasing the price shock?

    Nov 2nd, 2016

    Be prepared for a big shock in this sector.Industry data showed that demand has grown 53% since 2010, faster than any other grain. Now, the most severe droughts in the past century has led Vietnam, the largest exporter of the world that, faced with low yields.

    Low rainfall in the Mekong Delta and other regions across the country have reduced production of many agricultural products of Vietnam's main exports such as rice, black pepper, coffee and seafood. Cashew production in crop harvest this year fell 11%, pushing the domestic purchase prices rose 1/3, the highest level ever."No year like this year," said Nguyen Duc Thanh, Chairman of the Vietnam Cashew Association, told Bloomberg. He added that prices may still be high until harvest early next year.

    Cashews have passed walnut and pistachio (pistachio - pistachios) in recent years to rank second in the group after almond tree nuts (tree nuts), according to data from the County Council and the left dry tree international (INC). We market tree nuts valued at $ 30 billion alone is 5.2 billion nuts.According to the data collected, the global cashew consumption in 2014 reached a record 716 682 tons, up sharply from 469 241 tons in 2010, the INC said. Demand for grains rallied globally sparked exports surged 70% over the past decade, up to 503 713 tons. The US accounted for a quarter of the import market. India accounts for a third of global consumption, and is the second largest exporter in the world.

    Cashew trade usually planted in areas with high rainfall and warm climate such as South Vietnam. However, unusually dry spell during the last year have caused damage in the agricultural sector, affecting economic growth target this year by the Government.In Binh Phuoc province, the province accounted for more than half of the harvest that Vietnam, Mr. Hoang Thuy Duong (45) said he only harvested 8 tons of things this year, lower than the average of 11 tons. Drought "has made it stunted trees, causing reduced ability buds flowering, fruit set," said Ocean - farmers planted more than 20 years 4 hectares thing - said. Domestic price of crude rose to 52,000 VND per kg, a record high, up from 38,000 contracts earlier this year, according to data from the Association Article (Vinacas).

    Exposing cashews

    However, Vietnam's cashew industry is not completely dependent on local production. Approximately 2/3 of the sector input source is coming from elsewhere. West Africa accounts for about 46% world production of crude in 2015, and much of it grown here are processed in India, Vietnam and Brazil.

    The labor-intensive processing. Each area harvested cashew nut shell is softened by steam then be peeled off by hand. The seeds are dried, peeled and are classified according to size and quality. Workers often have to apply oil on hand to avoid exposure to toxins in the left thing, inherent toxicity equivalent of ivy leaves.

    Therefore, even if the decline in domestic production, export turnover of Vietnam that could still rise sharply, partly due to lower production in the Ivory Coast is growing. Vietnam may import about 800,000 tons of crude unshelled this year, double the output in the country, according to Mr. Thanh. Vietnam accounts for 15% of global output of 58% market share and exports in 2014.

    Exports increase

    Vietnam Cashew Association estimates exports this year will reach 300,000 tons of grain processing, up from 286,000 tons last year, of which exports to the US accounted for 34%. In the first 10 months, cashews contributed 2.33 billion USD in export turnover of Vietnam, both the export volume and value increased, according to the General Statistics Office. The value of exports this year could reach a record $ 2.7 billion, surpassing last year's record level of $ 2.4 billion.

    While output from Africa can compensate for a revenue loss of crops Vietnam, the increased demand is still affecting the market processing. The price of exports rose 22% to $ 7,809 a ton in August, Mr Thanh said, according to the Ministry of Industry of Vietnam. The price per ton of exported under FOB HCMC reached $ 9,000 on April 30/10.

    "We expect global demand growth in a number of years, in contrast to the supply is said to be stable or may be lower than last year," Amit Khirbat, Senior Vice President at Olam International , a trading company that Vietnam, said. "The high prices this year could affect the overall demand in the coming year."

    An Phong

    Source: Vinanet / Nhipcaudautu / Bloomberg