Decree 15 and the Challenges Facing Vietnam’s Cashew Industry

Vietnam’s cashew industry is currently dealing with significant challenges, especially due to the strict regulations in Decree 15/2018/ND-CP. This legal document outlines stringent conditions for importing and consuming cashew materials from countries that haven’t been approved for import into Vietnam. The Vietnam Cashew Association (VINACAS) recently held a seminar in Binh Duong on October 28, titled “Identifying Difficulties and Seeking Solutions for Trade Facilitation in the Cashew Industry,” aimed at finding solutions to these issues.

Decree 15 and Its Double-Edged Pressure on Cashew Enterprises

Decree 15 stipulates that imported cashew materials from countries not on the approved list are only for export use, creating significant hurdles for companies that rely heavily on raw materials from Africa, which provides 70% of Vietnam’s imported cashews. This limitation makes it difficult for businesses to adapt when the market fluctuates. With declining export prices, many companies face potential bankruptcy due to excess stock and restrictions on domestic sales.

Mr. Ta Quang Huyen, Chairman and CEO of Hoang Son I Company, mentioned that smaller companies lack buyers when global prices drop, forcing them to stockpile products. As banks tighten lending, these businesses struggle to maintain operations.

Recommendations from Cashew Companies

To address these challenges, businesses are urging authorities to adjust certain regulations, allowing more autonomy in declaring and paying taxes when selling products domestically. They also seek permission to transfer raw materials to larger local companies during volatile market periods to mitigate financial risks.

Legal Perspective and Solutions

Lawyer Le Trong Them highlighted the need for firms to fully understand legal requirements to operate independently and reduce risk. He proposed adding African nations to the list of countries permitted to export cashew materials to Vietnam. This would allow companies more flexibility in adjusting import purposes to meet rising domestic demand.

“The inclusion of African countries on this list will enable Vietnamese businesses to convert imports for domestic use, vital for the growth of Vietnam’s cashew industry,” he noted.

Efforts by the Vietnam Cashew Association

Mr. Bach Khanh Nhu, Executive Vice Chairman of VINACAS, emphasized that the cashew industry has faced numerous challenges over the past six years due to both market changes and Decree 15. He stated that the association would continue to advocate for regulatory adjustments to support the industry’s sustainable growth and global competitiveness.

Vietnam’s cashew industry, with its competitiveness and vast potential, faces limitations imposed by Decree 15. With appropriate regulatory changes, businesses can thrive, expanding both domestic and international markets. These adjustments would alleviate pressures, promote sustainable growth, and help the cashew industry meet demand at home and abroad.

Contact Information:

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