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  • VN cashew industry, no 1 in world, still relies on imported raw materials

    Jul 13th, 2016

    In 2015, Vietnam exported 328,819 tons of cashew nuts with export turnover of $2.4 billion. In the first four months of 2016, according to the General Department of Customs (GDC), Vietnam exported 90,600 tones, worth $688 million.  With high export volume and revenue, Vietnam is the biggest cashew nut exporter in the world, providing 50 percent of the global market.

    The participants at a recent workshop on new opportunities of the cashew industry in heard that there are about 1,000 cashew nut processing workshops with capacity of 1.2 million tons, which make up 40 percent of the world’s total capacity, and 371 export companies. The heavy reliance on import materials remains a problem for Vietnam’s cashew industry, though it remains the top cashew exporter in the world.  However, only 1/3 of the total materials needed for processing can be found from domestic sources, while the other 2/3 are imports, mostly from Africa and Cambodia, especially the Ivory Coast.

    In the first four months of 2016, Vietnam had to import 207,000 tons of raw products, an increase of 5 percent over the same period of last year, with import turnover of $323 million, an increase of 22 percent. Nguyen Duc Thanh, chair of Vinacas (the Vietnam Cashew Association), said that Vietnam’s cashew industry has big export turnover, but it is not strong because of disunity.  Being a giant, Vietnamese enterprises cannot hold the upper hand when negotiating with partners about prices, including material suppliers. Vu Thai Son from Long Son JSC which exports $180 million worth of products every year, also said that Vietnam is the Number 1 in three criteria – export, import and production. However, the lack of cooperation puts Vietnam at a disadvantage in the world market. Son believes that Vietnam’s cashew industry would still maintain its advantages for two or three more years with materials from domestic sources and Cambodia.

    However, he warned that Vietnam may meet difficulties from 2020. According to Son, if foreign companies also invest in processing technologies, they would have large cashew exports, or Vietnam would seriously lack materials to process. Son also pointed out that the current management policies create problemsvfor the production and export of cashew nuts. The import materials are listed by customs agencies as products owing tax for 275 days. Only when enterprises prove that they import the materials to make products for export will they will be exempted from tax. Thanh from Vinacas said some cashew companies in Long An province have joined forces to negotiate with partners to buy 100,000 tons of materials a year.