Hanoi(VNS/VNA) – Vietnam stood out as the world’s largest cashew exporter last yearbut there remains many challenges ahead for the country to retain its leadingposition in the future.

The country shipped 450,000 tonnes of cashew abroad lastyear, earning more than 3.6 billion USD. Vietnam also imported 1.6 milliontonnes of raw cashew with a turnover of more than 2 billion USD.

Pham Van Cong, Chairman of the Vietnam Cashew Association (Vinacas)told Vietnam News the consumption and export of cashew nutsundergoing deep processing, such as salted/honey roasted nutsand cashew nut candies and cookies, witnessed sharp growth.

“Vietnamese cashew enterprises have also been increasinglyactive in the supply of raw materials, production improvement and businessefficiency enhancement,” Cong said.

Last year, Tan Long Group signed a contract to purchase176,000 tonnes of Tanzanian raw cashews from the 2018 season with Tanzania'sCereals and Other Produce Board. This is the largest raw cashew purchasecontract in history, bringing a wealth of cashew nuts to the Vietnameseindustry.

But amid the volatile situation, Cong said quality problemshave aroused such as the moisture content, number of kernels per kilogramme,deformed nuts, and foreign matters affecting quality, as well as issues aboutfood safety and hygiene.

“To ensure quality, food safety and hygiene, it is necessaryto have technical regulations for since this will be a legal basis for Vietnamesecompanies when negotiating contracts with foreign suppliers and for resolvingtrade disputes,” Cong said.

Last year the agriculture ministry and the Ministry ofScience and Technology promulgated the Vietnam National Standards(TCVN12380:2018) for raw cashew nuts. 

This is applied for the inspection, evaluation, andclassification of imported raw cashew and in resolving disputes.

Vinacas encourages its members to apply it when negotiating,signing and implementing contracts, Cong said.

Consolidate the throne

Although holding the title “the world’s No 1 exporter”, Vietnamstill mainly exports semi-processed cashew nuts, which are sold at an averageprice of 10 USD per kilogramme, while finished products sold at supermarketsglobally cost about 30 USD per kilogramme.

Nguyen Minh Hoa, Vinacas Vice Chairman told Vietnam News that2020 was an unpredictable year because of tcomplicated developments in theinternational economy, including the US-China and US-India trade conflictsand the protection policies of countries exporting raw cashew and cashewnuts.

India, one of the world’s largest cashew nuts consumptionmarkets, is applying a tax policy to limit the amount of imported cashew nuts,mainly from Vietnam, Hoa said, adding that the Chinese market was alsogradually tightening the quality standards of imported agricultural products.

“If businesses do not promptly adjust to meet newrequirements, they will find it difficult to enter these large markets,”Hoa said.

The giant roasters of the US and Europe also said they wereabout to set out additional food safety standards and would vigorously checkthe amount of chemicals used in imported cashew nuts as supermarkets in thesetwo markets were increasingly stricter in terms of food safety, Hoa said.

According to Pham Van Cong, Chairman of the Vietnam CashewAssociation, the cashew sector aims to earn $4 billion in exports in 2020.

Vinacas would make efforts to improve the quality ofmachinery and equipment to enhance processing capacity and efficiency,including intensive processing; continue to co-operate with the cashewassociations of countries with large cashew nuts output such as India and theIvory Coast in production and trading of processed cashew nuts.

Enterprises in the cashew industry need to keep a close watchon market movements, especially in terms of supply and demand, focusing on theco-operation and information exchange with other enterprises and adjusting tohave a considerate and realistic 2020 plan.

According to Minister of Agriculture and Rural DevelopmentNguyen Xuan Cuong, although Vietnam’s cashew industry has plenty ofopportunities to develop, the country still needs to solve the three challengesrelated to raw materials, processing and market access, otherwise it will lagbehind and deteriorate.

In the future, the cashew industry should focus on solutionsto strengthen links between businesses and farmers, apply science andtechnology, improve sector and regional planning, Cuong said.

Nguyen Khac Hai, General Director of PAN Group, told VietnamNews the company would set up a research institute to produce cashewhigh-quality and high-yield cashew varieties.

“The PAN Group will support the cashew cultivation andconsumption for farmers to link cashew products to global value chains. PANGroup will implement a pilot model on a material area of 10,000 hectares in thesouthern province of Binh Phuoc, then replicate the model and transfertechnology to households and cooperatives in the region,” Haai said./.