Cashew exports are expected to prosper in the second half of the year

Due to the impact of acute respiratory infections caused by the new strain of coronavirus (Covid-19), it is expected that in the second half of the year, cashew exports will be able to prosper. The cashew industry will still have to adjust its export target of US$4 billion this year.

Illustration. Photo: Nguyen Hien

Adjusted target of US$4 billion

According to MARD, cashew exports in the first three months of the year were estimated at 86,000 tons and US$609 million, up 8.2% in volume but down 4.7% in value over the same period in 2019. The US, Netherlands and China remained the top three biggest cashew import markets of Vietnam, accounting for 35.4% market share; 12% and 6.1%, respectively. The average export price of cashew nuts in the first two months of the year reached US$7,046/ton, down 14% compared to the same period in 2019.

The Import and Export Department (Ministry of Industry and Trade) informed that at present, the price of raw cashew nuts in many localities across the country is quite low. Specifically, the price of raw cashew nuts in Dong Nai province was purchased by traders at VND18,000 - 19,000/kg, down VND6,000/ kg compared to the end of February 2020.

The area of ​​cashew cultivation in the area also decreased sharply by 2,500 hectares compared to 2019, to nearly 34,000 hectares. The main reason is that the price of raw cashew nuts keeps falling, the profit is much lower than many other perennial crops. In addition, cashew trees are prone to crop failure due to erratic weather.

In Ba Ria - Vung Tau province, the cashew harvest this year has encountered many difficulties due to reduced output, quality and price. Currently Ba Ria - Vung Tau province is entering the cashew harvest. The price of raw cashew nuts decreased from VND 9,000/kg to VND21,000/kg.

Most of the largest importers of cashew nuts from Vietnam had to fight the COVID-19 epidemic. Processing of delayed production caused difficulties for cashew farmers.

In the above difficult situation, Pham Van Cong, Chairman of Vietnam Cashew Association said: The export plan of US$4 billion in 2020 of the cashew industry will have to be reduced. The specific reduction of the plan will be scrutinized.

“Enterprises in the industry need to be careful in transactions at this time. Besides, in order to contribute to keeping and developing the cashew material area in the country, businesses need to try to maintain the purchase of raw cashew nuts for farmers,” Cong said.

Acceleration in the last six months

The Department of Agricultural Product Processing and Market Development (MARD) forecasts that there has been good progress in controlling the Covid-19 pandemic in China. Accordingly, the exports to China will be improved due to some international border gates and secondary border gates restoring operations.

According to the Import and Export Department, cashews are a daily food with high nutritional value, so although it will be severely affected by the Covid-19 epidemic and strong competition from other nuts, the demand will not be low.

Analysts said the cashew export market would recover after the Covid-19 epidemic was contained. Enterprises can calculate the plan to boost exports for the last six months of this year. In particular, the potential from the EU market is huge.

Looking at the specific market from Germany, the Import and Export Department cited data from the European Statistical Office (Eurostat), that Germany's cashew nut imports in 2019 reached 60,200 tons, worth 426.2 million euros (US$475.2 million), up 26.4% in volume and 1.9% in value compared to 2018.

Cashews are used by German people as a snack, with great demand for small and medium sized cashews for the food industry of this market. Vietnam has the advantage of exporting W320 cashews, meeting the consumer tastes of the Germans.

According to the cycle, the first three months of the year usually see the reduction of import and export of Vietnam and EU due to many holidays. It is forecasted that in the second half of the year, Vietnam's cashew exports to Germany will be better when the disease is controlled and the Vietnam-EU Free Trade Agreement (EVFTA) comes into effect.

The Import and Export Department recommends businesses to closely monitor the disease situation to have an appropriate business and production plan, including purchasing raw cashew nuts, selling processed cashews and storing raw materials and finished products.

At the same time, there are plans to transform the form of trade promotion such as: online promotion, connecting online businesses to maintain and develop the market even when epidemics are happening; ensuring that it can quickly restore all activities as soon as the epidemic is controlled and ends.