Vietnam Cashew Exports in H1 2024: Impressive Growth, Reaffirming Leading Position

Vietnam Cashew Exports in H1 2024: Impressive Growth, Reaffirming Leading Position

The first half of 2024 has painted a bright picture for Vietnam’s cashew industry with export turnover reaching USD 1.95 billion, up 18.7% compared to the same period in 2023. This is a well-deserved result of the cashew industry’s efforts in improving product quality, diversifying export markets, and adapting to fluctuations in the international market.

Highlights of the cashew export picture:

• Strong growth: Cashew exports surged by 32.4% to reach 216,000 tons, reflecting strong international demand for Vietnamese cashew products.
• Market expansion: Cashew exports increased in most major markets such as the US (16%), China (39%), and the Netherlands (7%).
• Stable prices: Although the average export price decreased by 7.9% compared to the same period in 2023, prices remained high, ensuring profits for farmers.

The success of Vietnam’s cashew industry in the first half of 2024 is attributed to:

• Efforts of the cashew industry: Businesses have focused on improving product quality, diversifying products, and promoting trade promotion activities.
• Government support policies: The government has issued many policies to support the development of the cashew industry such as supporting the re-planting of cashew trees, applying science and technology to production and processing, etc.
• Increasing consumer demand: The global demand for cashews is increasing, especially in markets such as the US, China, and Europe.

With this growth momentum, Vietnam’s cashew export turnover in the whole year of 2024 is expected to reach USD 4 billion, a record high.

Challenges Facing Vietnam’s Cashew Industry and Solutions for Sustainable Growth

Despite its remarkable achievements, Vietnam’s cashew industry still faces several challenges that hinder its further development and global dominance. Addressing these challenges effectively is crucial for the industry to maintain its growth momentum and solidify its position as a leading cashew producer and exporter.

1. Fluctuating Raw Material Prices:

The cashew industry is highly susceptible to fluctuations in raw cashew nut prices, which can significantly impact the profitability of businesses. These price variations stem from factors such as supply and demand dynamics, weather conditions, and global economic trends.

Solution:

• Diversify Cashew Supply Sources: Vietnam should expand its procurement network to include cashew-producing regions beyond Africa to reduce reliance on a single source and mitigate the impact of price volatility.
• Invest in Contract Farming: Encourage contract farming arrangements between cashew processors and farmers to stabilize raw cashew nut prices and ensure a consistent supply of quality raw materials.
• Develop Price Risk Management Strategies: Implement financial hedging tools and insurance mechanisms to protect businesses from the adverse effects of raw cashew nut price fluctuations.

2. Trade Barriers and Market Access Challenges:

Several export markets impose various trade barriers, such as tariffs, quotas, and stringent sanitary and phytosanitary (SPS) measures, which hinder Vietnam’s cashew exports. These barriers increase production costs, limit market access, and make it challenging for Vietnamese cashew products to compete in international markets.

Solution:

• Strengthen Trade Negotiations: Actively engage in bilateral and multilateral trade negotiations to reduce or eliminate trade barriers and secure favorable market access for Vietnamese cashew products.
• Enhance Compliance with SPS Standards: Invest in upgrading phytosanitary infrastructure and enhancing compliance with international SPS standards to ensure the quality and safety of Vietnamese cashew products.
• Promote Brand Awareness and Market Diversification: Expand marketing efforts to raise brand awareness of Vietnamese cashews in new and emerging markets, reducing reliance on traditional markets.

3. Intensifying Competition from Other Cashew Producers:

Vietnam faces stiff competition from other major cashew-producing countries, such as India, Brazil, and Mozambique, which are also expanding their production and export capacities. This competition puts pressure on Vietnamese cashew businesses to maintain their cost competitiveness and product differentiation.

Solution:

• Focus on Value-Added Products: Shift the focus from exporting raw cashews to producing value-added cashew products, such as roasted, salted, flavored, and ready-to-eat cashews, to command higher margins and differentiate from competitors.
• Invest in Research and Development: Continuously invest in research and development to enhance product quality, develop innovative cashew-based products, and optimize production processes to gain a competitive edge.
• Strengthen Industry Associations and Collaboration: Foster stronger collaboration among cashew businesses and industry associations to share knowledge, promote collective marketing, and advocate for the industry’s interests.

By addressing these challenges proactively and implementing the proposed solutions, Vietnam’s cashew industry can navigate the competitive global landscape, maintain its position as a leading cashew producer and exporter, and achieve sustainable growth in the years to come. Embracing innovation, diversifying markets, and strengthening collaboration will be key to the industry’s continued success.

Contact Information:

HCM office Address: 191/6B Le Van Viet Street, Tang Nhon Phu A Ward, Thu Duc City, Ho Chi Minh City, Viet Nam

Factory Address: Nguyen Thai Hoc Street, Phuoc Tan Hamlet, Binh Tan Commune, Phu Rieng District, Binh Phuoc Province, Vietnam

Email: sales@cptcorp.vn

Website: cptcorp.vn