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  • Vietnam cashew industry: Time for a new strategy

    Jul 19th, 2015

    Spurred by the recent detection of salmonella by the US FDA (Food and Drug Administration) in routine sampling of cashews, Nguyen Duc Thanh said it is imperative for the industry to take a remedial and fresh approach to the problem. The President of the Vietnam Cashew Association (Vinacas) also unveiled the FDA issued a food poisoning bulletin and ordered a recall of 14,000 pounds of Vietnamese LP Cashews due to the discovery of Salmonella. In addition the FDA is undertaking a thorough investigation to ferret out the specific details surrounding the matter.

    Salmonella can lead to a variety of gastric upsets and be particularly devastating (even deadly) to the very young, elderly and those with compromised immune systems. Salmonella cannot be seen or detected by sight or smell. The packer was Hong Duc Company Limited located at 40/8 Chua Hoi Khanh St., Phu Cuong Ward, Thu Dau Mot Township, Binh Duong. The company has ceased distribution of the product as the FDA investigation continues. No illnesses have been reported to date. The cashews in question were distributed by The Hemisphere Group of New York to direct customers in the states of Michigan, Massachusetts and New York in the US plus the municipalities of Quebec and Scarborough in Canada. All direct customers have been instructed to notify their accounts and return the cashews to The Hemisphere Group for a full refund, which in turn will presumably be passes on to Hong Duc Company Limited.

    Concerns about food safety and hygiene In addition, Thanh revealed in the six months leading up to July of 2015, Vietnamese exporters shipped 150,000 tons of cashews generating US$1.1 billion of revenue to overseas markets. For calendar year 2014, the total revenue for cashew and related by product exports had been forecast at US$2.5 billion but all that could be jeopardized by the legitimate concerns of foreign consumers over food safety and hygiene. Losses will continue to mount until the nation puts strong measures in place to ensure food safety, said Thanh. We could see total potential economic losses of a billion US dollars, in just the cashew industry alone until that occurs. The discovery of salmonella is just the latest scare to batter the Vietnam agricultural and aquatic industries. Sickness caused by contaminated fish and seafood have eroded public confidence in Vietnam’s food safety and renewed calls for change by both the Vietnam government and the FDA.

    "These events are causing steep declines in consumer confidence both domestically and abroad in the overall safety of foodstuffs and the government’s ability to protect the public," said Thanh. "It is clear that we cannot rely on the government alone to prevent food borne illness outbreaks," said Thanh. "Food processors must implement preventative systems to stop outbreaks before they occur, and we need to hold them accountable when they fail." Another limitation for Vietnamese companies in the cashew industry is that they lower prices to compete against other companies and to compensate, in turn then lower the quality of their products. In other words, open markets are new to the majority of Vietnamese and they have not mastered the techniques of managing business yet— and don’t really have a solid grasp of fundamentally sound business practices. “In Brazil and India, businesses keep both their prices and quality of products high,” Thanh said.

    Thanh added that these practices ensure not only food safety and hygiene, but maintain the individual company’s image as well as serve to elevate Brazil and India’s prestige in the global marketplace. To add insult to injury, today an excessive number of domestic businesses are getting into the cashew export business resulting in competition that is becoming overly cutthroat and unhealthy. In 2014, there were roughly 345 companies in the industry and 73% of them had sales of less than US$5 million per year, Thanh said adding that this resulted in poor and uneven quality, causing unnecessary losses for the entire industry.

    “This has created an untenable situation for the cashew industry in long-term,” Thanh stressed. Last year, out of 265 companies, 119 (or 49%) of them were ranked substandard in class C. The authorities penalized businesses in class C (for failure to meet the minimum standards of food safety hygiene) in order to maintain fairness in production.  The nation simply lacks too many of the critical components that contribute to the safe, quality-oriented food manufacturing and processing environments that exist in Western economies. Vietnam is further challenged by weak government capacity at the local levels. Despite these challenges, if the cashew industry is to expand and maintain sustainable international trade then it’s high time for a new strategy and progressive safety regimes to be put in place for the cashew industry, Thanh concluded.

    Source: Spurred by the recent detection of salmonella by the US FDA (Food and Drug Administration) in routine sampling of cashews, Nguyen Duc Thanh said it is imperative for the industry to take a remedial and fresh approach to the problem. The President of the Vietnam Cashew Association (Vinacas) also unveiled the FDA issued a food poisoning bulletin and ordered a recall of 14,000 pounds of Vietnamese LP Cashews due to the discovery of Salmonella. In addition the FDA is undertaking a thorough investigation to ferret out the specific details surrounding the matter. Salmonella can lead to a variety of gastric upsets and be particularly devastating (even deadly) to the very young, elderly and those with compromised immune systems. Salmonella cannot be seen or detected by sight or smell.

    The packer was Hong Duc Company Limited located at 40/8 Chua Hoi Khanh St., Phu Cuong Ward, Thu Dau Mot Township, Binh Duong. The company has ceased distribution of the product as the FDA investigation continues. No illnesses have been reported to date. The cashews in question were distributed by The Hemisphere Group of New York to direct customers in the states of Michigan, Massachusetts and New York in the US plus the municipalities of Quebec and Scarborough in Canada. All direct customers have been instructed to notify their accounts and return the cashews to The Hemisphere Group for a full refund, which in turn will presumably be passes on to Hong Duc Company Limited.

    Concerns about food safety and hygiene

    In addition, Thanh revealed in the six months leading up to July of 2015, Vietnamese exporters shipped 150,000 tons of cashews generating US$1.1 billion of revenue to overseas markets. For calendar year 2014, the total revenue for cashew and related by product exports had been forecast at US$2.5 billion but all that could be jeopardized by the legitimate concerns of foreign consumers over food safety and hygiene. Losses will continue to mount until the nation puts strong measures in place to ensure food safety, said Thanh. We could see total potential economic losses of a billion US dollars, in just the cashew industry alone until that occurs.

    The discovery of salmonella is just the latest scare to batter the Vietnam agricultural and aquatic industries. Sickness caused by contaminated fish and seafood have eroded public confidence in Vietnam’s food safety and renewed calls for change by both the Vietnam government and the FDA. "These events are causing steep declines in consumer confidence both domestically and abroad in the overall safety of foodstuffs and the government’s ability to protect the public," said Thanh. "It is clear that we cannot rely on the government alone to prevent food borne illness outbreaks," said Thanh. "Food processors must implement preventative systems to stop outbreaks before they occur, and we need to hold them accountable when they fail."

    Another limitation for Vietnamese companies in the cashew industry is that they lower prices to compete against other companies and to compensate, in turn then lower the quality of their products. In other words, open markets are new to the majority of Vietnamese and they have not mastered the techniques of managing business yet— and don’t really have a solid grasp of fundamentally sound business practices. “In Brazil and India, businesses keep both their prices and quality of products high,” Thanh said. Thanh added that these practices ensure not only food safety and hygiene, but maintain the individual company’s image as well as serve to elevate Brazil and India’s prestige in the global marketplace. To add insult to injury, today an excessive number of domestic businesses are getting into the cashew export business resulting in competition that is becoming overly cutthroat and unhealthy.

    In 2014, there were roughly 345 companies in the industry and 73% of them had sales of less than US$5 million per year, Thanh said adding that this resulted in poor and uneven quality, causing unnecessary losses for the entire industry.  “This has created an untenable situation for the cashew industry in long-term,” Thanh stressed. Last year, out of 265 companies, 119 (or 49%) of them were ranked substandard in class C. The authorities penalized businesses in class C (for failure to meet the minimum standards of food safety hygiene) in order to maintain fairness in production. The nation simply lacks too many of the critical components that contribute to the safe, quality-oriented food manufacturing and processing environments that exist in Western economies. Vietnam is further challenged by weak government capacity at the local levels. Despite these challenges, if the cashew industry is to expand and maintain sustainable international trade then it’s high time for a new strategy and progressive safety regimes to be put in place for the cashew industry, Thanh concluded.


    Source: www.english.vietnamnet.vn