Sigh of the cashew industry

Keeping the position of ranking No. 1 in many consecutive years, but the profit from cashew processing industry is very small due to the dependence both in input and output of the product. Meanwhile, the domestic production situation is also suffering heavy losses from the adverse weather and the ravages of pests.

Processing of cashew nuts for export at Phuc An Company. Picture: N.Hiền

The poor cashew season

Since the cashew trees have been planted in Binh Phuoc up to now, farmers have never experienced a sad crop like this year. Weather conditions, pests have caused the cashew nut to dramatically reduce not only in productivity but also quality of cashew nuts. Ms Tran Thi Yen, Director of Bu Gia Map Agricultural Cooperative (Bu Gia Map district, Binh Phuoc province) said that in the past average productivity of cashew at orchards in Bu Gia Map was 1.5 - 2 tons per hectare, but this year reduced to only 6 quintals per hectare. As for her family, in 2016, her 5ha of cashew could harvest up to 15 tons, but by 2017 reduced to 8 tons and this year only collected 3 - 4 tons.

The reason for this situation, according to Ms Yen and many other farmers in Bu Gia Map, is due to the unfavorable weather, the rainy season often happens that causes bloom loss. Along with that is the destruction caused by pests, especially mosquitoes and bugs. "In the past, cashew farmers did not have to care much, no fertilizers, no spraying, but the yield was still high.

Recently, although farmers are very active with fertilizer, sprays and pesticides, but no success. Most of the cashew orchards output fell by about one third compared to before, while the cost of investment and care increased significantly" she said. Despite the attention and support from pest and disease prevention from provinces, districts and communes, but the situation for cashew is still serious. In the whole of Bu Gia Map commune, about 80-90% of cashew area is pestilent

According to cashew growers in the Bu Gia Map, the 2017/2018 season is also ending very early compared to previous years. Every year, the season usually lasts until the end of April lunar year, but now through early March lunar year, most of the cashew gardens have been harvested. According to general assessment, the average productivity of Bu Gia Map Agriculture Cooperative in this season can only be about 6 quintals / ha.

Not only decreased in productivity, but also quality of raw cashew is reduced seriously, although the price of fresh cash is quite high, from 38,000-39,000 VND / kg, but cashew growers in Bu Gia Map can only sell for the price of about 28,000-29,000 VND/ kg. Not only in Binh Phuoc, many other localities such as Lam Dong, Binh Thuan ... the situation of crop failure is quite serious. There are some places that have nearly lost their crop areas, such as Tanh Linh, Da Te, Da Huoai, Cat Tien ...

At the beginning of this year, Vietnam Cashew Association (Vinacas) expected domestic cashew production would be better than last year, with production estimated at 400-500 thousand tons. However, after visiting the key areas, Vinacas‘s experts have made a new estimate that the 2017-2018 output of the country can only reach about 300,000 tons.

"Hamburgers"

The information from cashew processing enterprises also showed a poor picture of the cashew industry. Mr Le Nhat Khoa, deputy director of Phuc An Production and Trading Co. Ltd. (Binh Phuoc), said that the Vietnam cashew industry is in the same situation as "hamburgers". Vietnamese companies are forced to price both input and output. Specifically, the price of raw cashew for processing companies is about $ 4.45 - 4.46 per lb, but the price of cashew kernel is only $ 4.4-4.45 per lb. This situation has existed for many years. Accordingly, Vietnamese enterprises have to import materials for production and wait for a high price to sell.

According to Mr Khoa, the reason is that the purchase of raw materials from Africa must be through the intermediary of the Indian shippers. Although about 5-6 years ago, some large Vietnamese companies have penetrated into Africa to seek direct purchase, but the reality requires checking the quality and quantity as to the contract, not the direct import. While raw material suppliers have a great deal of solidarity and a common ideas in trading activities. Specifically, about 3 weeks ago, the price of cashew kernel decreased, the price of fresh water in the country also went down, but the suppliers in Africa did not sell in bulk even though they had a lot of stock. At present, the price of cashew has just recovered, and these suppliers began to raise raw material prices and sell out.

In terms of output, even as the world's largest cashew producer, Vietnam is still dependent on price. As with selling to European countries, the United States also adopts about 20 major importers. These importers often stop buying goods simultaneously to force Vietnamese enterprises to reduce prices. Due to limited financial resources, the foreigners stopped buying goods for a month, many small factories in Vietnam were forced to reduce prices.

This has been the concern of the cashew industry for many years, because Vietnam has not received the real value of cashew nut. Importers in Europe and America buy cashews and only need to re-process, (roast, fry) and sell at very high prices. Even Many supermarkets in Vietnam also import these products and sell to Vietnamese consumers. Recently, Europeans have begun to change their way of eating cashew nuts. They also eat white cashew (with the condition of having to bite) without further processing. "When I went to Europe, I saw importers buy cashew nuts from Vietnam and just packaged them into small packages that were four to five times the price from Vietnam," said Khoa Thong.

In trying to get rid of "burgers", some big cashew processing companies are looking to push up processing to supply the domestic market and export to some markets with demand to reach higher profits in the cashew sector. Typically, Phuc An Company is purchasing a fried cashew nut factory, which is expected to go into production in 2018. With the orientation to make high quality products, ensuring hygiene, the company is looking for and selecting advanced machinery and equipment from a number of suppliers from Switzerland, Japan and Korea.

However, the number of enterprises can investment such as Phuc An is not much. Out of hundreds of cashew processing enterprises, most of them are on a small scale and with limited financial potential. Therefore, the uniting of enterprises together to find a common voice strong enough in trading with foreign traders is still a big problem for the cashew industry in this difficult context.