Cashew exports expected to prosper in the EU and US

Raw cashew supply has declined, oversupply situation has ended in the world market, and the Covid-19 pandemic is still a complicated situation for Vietnamese cashew exports. However, the export of this item is forecast to have certain prosperity in major markets such as the EU and US in the near future.

Due to difficulties, the whole year’s cashew nut export is expected to lower its target from US$4 billion to US$3 billion. Source: Internet.

Export prices fell more than 13%

According to the Department of Agricultural Product Processing and Market Development (Ministry of Agriculture and Rural Development), in the first half of this year, cashew exports reached 223,000 tons and US$1.47 billion, up 14.4% in volume but down 1% in value compared to with the same period in 2019.

In the first five months of the year, the United States, the Netherlands and China remained the three largest import markets of Vietnam’s cashews, accounting for 36.7% and 12.6% of market share respectively and 9.6% of the total export value. The average export price of cashew nuts in the first five months of the year reached US$6,721 / ton, down 13.3% over the same period in 2019.

The Import-Export Department (Ministry of Industry and Trade) has reported that cashew transactions have recently slowed down. Many US and EU importers have proposed to postpone the delivery deadline for WS and LP cashew orders due to large inventories.

Representatives of the Department of Processing and Agricultural Product Market Development stated: In the world, in the first two weeks of June, the market of EU cashew kernel transactions is relatively quiet. Many EU importers said fried roasters are demanding slow delivery because there is plenty of inventory. Meanwhile, the pressure to sell cashew kernels to the market of small and medium factories in Vietnam is relatively high due to the capital turnover for the batch of raw cashew material returning to the port. However, in the US market, the consumption of deep-processed cashew nuts increased sharply on supermarket channels, decreasing in hotel and restaurant channels, but overall still tended to increase slightly.

Vietnam Cashew Association (Vinacas) assessed that the shortage of raw cashew nuts pushed up the price of this commodity while the falling cashew kernel price made the situation of exporting enterprises become more difficult.

“Vietnam mainly imports raw cashew nuts from Africa. Influenced by the Covid-19 pandemic, the importation became more difficult, the volume of goods returned was small. Besides, in the Ivory Coast, the Government has set a minimum export price policy. Even, the government of this country also spends money to buy goods, resulting in a large amount of raw things that cannot be returned to Vietnam,”said Tran HuuHau, Standing Member of Vinacas Information Council.

Will prosper in the EU, US

According to the World Cashew Association, the supply of raw cashew nuts in 2020 is expected to be lower than in 2019 due to ineffective care in Africa. Global raw cashew nut production in 2020 is forecast to decrease by 21,000 tons compared to 2019. The total supply of raw cashew nuts for 2020 including the old stock transferred and the new harvest will decrease by 167,000 tons compared to 2019. The raw cashew surplus has been terminated since the beginning of 2020 when the inventory from 2019 has been used up.

The Department of Processing and Market Development of Agricultural Products forecasts that the export of Vietnam’s cashew nuts to the EU market will tend to increase slightly in the near future. Consumption of cashew processed in the supermarket channel increased, but decreased in the channel of restaurants and hotels.

Importers of cashews from now until the end of 2020 will not sign contracts with large numbers and keep inventories because it is not possible to predict the economic situation under the impact of the Covid-19 pandemic.

In terms of prices, cashew kernel prices are expected to increase slightly, when raw cashew reserves are limited and supply of cashew kernels decreases. Similarly, in the US market, the price of cashew kernel exports is likely to increase slightly.

In addition to the market assessment issues, the Vietnam Cashew Association said that, recently, some cashew kernel buyers said that the quality of cashew nutsis bad, and many seeds also have silk shells, shrunken, melisma. Perhaps due to difficulty in selling low-end goods, some factories have deliberately mixed them into white goods for sale.

Emphasizing that this is a phenomenon that needs to be condemned because it will adversely affect the reputation and the common brand of Vietnam's cashew industry, Pham Van Cong, Chairman of Vinacas said: “Next time, processors, machines should not buy raw cashew nuts for production if they cannot balance cashew kernel prices. Selling cashew kernels to reputable customers; delivery needs to ensure a stable quality to avoid problems in contract performance and contribute to the protection of the Vietnamese cashew brand.”