Resolve shortcomings for sustainable cashew export

Fierce competition

In 2023, Vietnam's cashew kernel exports set a new record when reaching a volume of 645,316 tons, surpassing the 2021 record of 609,260 tons. However, faced with this record number, Mr. Vu Thai Son, Chairman of Binh Phuoc Cashew Association, Chairman of the Board of Directors and General Director of Long Son Joint Stock Company, said that in 2023, cashew businesses "break even and win". . This shows the severity of the cashew industry with many potential risks and dangers.

In 2023, Vietnam's cashew export price will continue to decrease compared to 2022. The too large supply of cashew kernels from processing factories leads to competition for customers by lowering selling prices. W320 cashew kernels (common type) decreased sharply, to only USD 2.3 /Lb (0.45kg) compared to the previous 2.6 - 2.7 USD/Lb, but still difficult to sell; Raw cashew prices decreased more slowly and remained at a high level (USD 1,100 /ton - USD 1,200 /ton).

Speaking at the 13th Vietnam International Cashew Conference that recently took place in Quang Binh, Mr. Pham Van Cong, Chairman of the Vietnam Cashew Association (VINACAS), said that the "hot" growth of the Vietnamese cashew processing industry The South has led to a situation of buying raw cashews and competing to sell cashew kernels, since then, the price of cashew kernels has dropped sharply. The price of raw cashew nuts is always very high at the beginning of the season. By the end of the season, it has decreased, but the quality has also gone down and is still not balanced with the selling price of cashew kernels, causing many processors to lose money.

Currently, the "hot" growth in area and output of raw cashew nuts in some African countries and Cambodia still shows no signs of stopping while the processing industry in these countries is still modest. Some countries have large output but are applying deep protection policies to raw cashews such as: regulating minimum selling prices, regulations on collecting export taxes and many types of fees... leading to high raw cashew prices. Roasters and supermarket businesses face competition from other types of nuts and reduced consumption, so they cannot increase selling prices.

According to Mr. Pham Van Cong, if this situation continues, a series of Vietnamese and world processors will go bankrupt. With a market share of nearly 80% of the world's cashew kernel exports and consuming nearly 65% of the world's raw cashew output; The collapse of Vietnam's cashew processing industry will lead to unpredictable consequences for the world cashew industry; Not only is the supply of cashew nuts reduced and disrupted, but it is also a big risk for countries that grow and export raw cashew nuts due to a sharp decline in import demand from Vietnam.

Even raw cashew producing countries have soon identified this risk. Mr. Adama Coulibaly, General Director of the Ivory Coast Cotton and Cashew Council, pointed out the paradox of the world cashew supply chain when the price of cashew kernels has continuously decreased since 2018, causing the price of raw cashew nuts to decrease, while the price of cashew kernels has decreased. Retail sales to consumers remain at a high level. “If this situation continues, it will cause many processors to close, and raw cashew producers will also abandon cashew trees. Therefore, it is necessary to soon have a common voice for the global cashew industry" - Mr. Adama Coulibaly said.

Mr. Vu Thai Son also pointed out two weaknesses of Vietnam's cashew industry today: dependence on imported raw materials and competition within the industry.

Share benefits for sustainable development

Mr. Pham Van Cong assessed that participating in 16 FTAs and continuing to negotiate 3 FTAs is a huge advantage for Vietnam's deeply processed cashew products entering markets. Besides, there are advantages in mechanization, automation, innovation in technology and processing equipment of the cashew industry. Most of the machinery for cashew processing is manufactured by Vietnamese enterprises, which is the leading country in importing raw cashews, pre-processing and exporting cashew kernels in the world.

In the process of international economic integration, Vietnamese cashew enterprises are very flexible and adapt quickly when meeting the increasingly strict standards of the import market. Many factories are certified with BRC Food standards (Global standards for food safety), SMETA (Social responsibility standards), HACCP (Standards for hazard analysis and food safety control points)... Another advantage is that although the local raw material area produces only about 350,000 tons of raw cashew nuts per year, the processed cashew nuts are highly appreciated by customers in importing countries for their quality and taste.

To be able to resolve the shortcomings and take advantage of the advantages, Mr. Pham Van Cong recommends that Vietnamese cashew businesses need to change their way of thinking, carefully research the market and their conditions and potentials to have an appropriate production and business strategy. Currently, raw cashew nuts are very abundant; businesses should not compete to buy at the beginning of the season for reserve while there is no contract to sell cashew kernels.
Mr. Vu Thai Son also said that cashew processing enterprises need to boldly cut capacity to reduce the demand for raw cashews, thereby bringing the price of raw cashews down to a more reasonable level. This will also help reduce the financial pressure of businesses, helping businesses not have to massively sell cashew kernels like in the past. From there, it contributes to increasing the price of cashew kernels again.

In addition to the efforts of cashew processing enterprises and the Vietnamese cashew industry, Mr. Pham Van Cong also called for the consensus and joint efforts of businesses and the world's cashew industry to reshape the global cashew supply chain; including the shaping and redistribution of the global cashew value chain. Only proactive association, cooperation, and benefit sharing in the chain can help each other produce and do business effectively and develop sustainably.

Source:Custom News