Hundreds of Thousands of Tons of Cashews from Africa Flood Vietnam, Making the Country a Global Export Giant

Vietnam has solidified its position as one of the world’s leading agricultural exporters, with key products such as rice, coffee, rubber, pepper, and cassava. Among these, cashews have been a standout, with Vietnam maintaining its status as the world’s largest exporter of cashew kernels for 16 consecutive years, accounting for nearly 80% of global production. However, behind these impressive figures lie significant challenges related to raw material supply and heavy reliance on imports.

The State of Cashew Imports in Vietnam

According to the Food and Agriculture Organization of the United Nations, Vietnam produced approximately 2.66 million tons of cashews in 2018, a 23% increase from 2017. This solidified Vietnam’s position as the world’s leading cashew producer and exporter, surpassing India, the second-largest producer, which yielded 790,000 tons. Despite its strong processing and export capabilities, Vietnam remains heavily dependent on imported raw cashews.

In 2023, Vietnamese cashew processing plants had to import over 3 million tons of raw cashews from various countries, with about 2.2 million tons coming from Africa, particularly West Africa. Notably, domestic production could only meet about 10% of the industry’s raw material needs, forcing Vietnam to spend over $2 billion on raw cashew imports from international markets.

According to data from the General Department of Vietnam Customs, in July 2024, Vietnam imported 291,413 tons of cashews, valued at over $346 million, marking a 1.9% increase in volume and a 7% increase in value compared to the previous month. Cumulatively, in the first seven months of the year, Vietnam imported over 1.7 million tons of cashews, worth more than $2.1 billion, reflecting a 2.5% increase in volume and a 0.6% rise in value compared to the same period last year.

Challenges Stemming from Import Dependency

The reliance on imported raw materials poses significant challenges for Vietnam’s cashew industry. The price of raw cashews has surged due to a sharp decline in supply, as the domestic cultivation area continues to shrink. Many farmers have shifted to other crops, such as durian, which offer higher returns. This shift has increased production costs and reduced Vietnamese cashews’ competitiveness in the global market.

One of Vietnam’s largest suppliers of raw cashews in the first seven months of 2024 was Cambodia, providing over 786,000 tons worth approximately $1.01 billion, representing a 34% increase in volume and a 26% increase in value compared to the same period last year. Notably, the import price from Cambodia decreased by 6% to $1,287 per ton. However, supplies from African countries such as Côte d’Ivoire and Ghana have declined in both volume and value, as these nations focus on developing their domestic processing industries and reducing raw cashew exports.

Opportunities and Solutions for Vietnam’s Cashew Industry

Despite the challenges, Vietnam’s cashew industry still holds significant growth potential. In 2023, the country earned over $3.6 billion from exporting 644,135 tons of cashew kernels, a 24% increase in volume and an 18.1% rise in value compared to the previous year. Vietnam’s goal for 2024 is to achieve a record export value of $3.8 billion, an increase of about $200 million from 2023.

The Ministry of Industry and Trade believes that Vietnam’s cashew exports in 2024 can still grow. However, to achieve this goal, the industry must address raw material supply challenges, production costs, and the shift towards green production. Businesses in the sector need to closely monitor market trends, invest in technology, and enhance product quality to maintain export momentum.

Vietnam faces both significant opportunities and challenges in maintaining its position as the world’s leading cashew exporter. To achieve sustainable growth, the cashew industry must develop a long-term strategy that reduces dependence on imports and increases the added value of its products. The key to continued success lies in technological innovation, product diversification, and stronger collaboration among stakeholders within the supply chain, ensuring that Vietnam’s cashew industry remains a global powerhouse in the years to come.

Source: BizLive

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