Importing Premium Cashew From Vietnam : A Trade Leader

While many people may be aware of the fact that Vietnam is the second largest producer of coffee after Brazil, it also is without any doubt the undisputed leader when it comes to production of cashew nuts. It is the largest producer and exporter of cashew nuts. According to the figures released by Food and Agricultural Organization of the UNO, the country produced around 2.66 million tones of cashews including their cells. This was an impressive 28% growth over the previous year. It would also be pertinent to mention here that the production of cashew nuts in Vietnam was almost 3 times that of India. We also know that in terms of size, India is much bigger. India produced around 790,000 tons of cashews making Vietnam the largest and undisputed king as far as cashew nuts are concerned.

The production and trade of cashew nuts allows many Vietnamese producers to make significant improvements in the recent years. The country is on the way to become an export leader as a result of recent low tax tariffs promoting Vietnamese exports to Europe and the USA. We conducted this article following an interview we had with Movetoasia.com’s team in Ho Chi Minh City Vietnam about their sourcing and export service for foreign companies.

Exports

It would also be pertinent to mention that Vietnam exported around 370,000 tons of cashew nuts or around 14% of its total production. This figure of 370,000 tons is a feather in the cap of this country, making it the largest exporters of this item by volume as far as the year 2018 was concerned. This is as per the figures released by the Vietnam Cashew Association. Hence, there is no doubt that this country depends quite a bit on cashews nuts when it comes to providing employment and sustaining the economic activities of a large section of the people of Vietnam.

Where Is It Grown?

Binh Phuoc is the biggest cashew producing area and it is a famous southern province of Vietnam. It is not very far off from the commercial center of Ho Chi Minh City and is located north of this bustling and famous capital city of Vietnam. A visit to Binh Phuoc will make us understand why it is the main center when it comes to the production Cashew nuts. You will be able to come across thousands of cashew trees and these are quite popular and native to South America in terms of appearance and other attributes. The trees are covered with cashew apples and they are yellow in color and come with a bell pepper shape. The seed that is comma-shaped and located under the apple is the much sought after, tasty, and nutritious cashew nut.

Cashew Production Is Quite Old

It would be pertinent to mention here that Vietnam is into production of cashews since the early 1980s. It has the right humid tropic climate. Further, the country also has generous distribution of red fertile soil and places like Binh Phuoc and also Dong Nai. These were designated as the major production zone by the Vietnamese government. It tool lot of care to encourage and help production by distributing seeds and fertilizer to farmers. It also helped them in educating the farmers about the new cultivation techniques that are being used overseas. There also was a well thought out public and private participation. Lafooco a major producer was set up in the year 1985 and they worked hard to ensure that the entire cashew manufacture and export business got off its feet and was up and running. This is a big company and it is located in the Long An Province. It owns around 620 hectares of cashew rich filed in Binh Phuoc and also some other places. It has been able to put in place some of the finest and most modern organic farming techniques and they meet the strict EU and US Sanitary regulations.

Though the last few years were a bit bad for the entire cashew industry in Vietnam, things are looking up and today the country exports significant quantities of cashew nuts to different countries of the world. The biggest importers of cashews nuts from Vietnam are the USA, Canada, almost all countries of the European Union, Australia, New Zealand, China, India and a host of other African and west Asian countries. It would also be pertinent to mention here that in spite of being a major producer of cashews in the world, Vietnam continues to import a significant quantity of cashew nuts to meet its domestic needs.

Rare Issues of Quality

While traditionally Vietnam has been well known for its high quality cashes nuts, it has had to face some problems in 2019 as far as quality and other such attributes are concerned. The problems related to moisture content, recovery levels, the number of nuts per each kilogram, impurities and also amount of tailings amongst other things. Worms, infestation and other biological factors also contributed to a drop in exports of cashews from Vietnam in 2019. The US-China and US-India trade wars also had its impact on the export of this commodity by Vietnam to some other countries of the developed world.

It Has Managed To Strengthen Its Position

After the crisis in 2017-18, things are starting to fall in place and today Vietnam is taking all effort to keep its importers across the world happy. It still focuses mainly in export of cashew kernels and semi processed cashew nuts. However, they are aware of the fact that this will not fetch them the right foreign exchange and price because the cost of kernels and semi processed cashews is hovering just around $10 per kilogram in the international market. If they wish to participate more profitably in the entire product supply chain, they will have to pay more attention to roasting, packing and other such value additions. Further, it also needs to take care of chemical residues and other such things that may result in increased rejections. However, the good thing is that the country is aware of all this and is taking the right steps in their direction. While setting up roasting, packing and other additions to the product line may take some time it is right now focusing on improving the quality of the raw kernels and other such things. Further, they are also ramping up production facilities to take care of the new emerging situations.

Conclusion

While there is no doubt that Vietnam continues to be a big supplier of raw cashews, it is aware of the changing market dynamics and is ready to take the necessary steps to overcome the situation. It is a fluid market out there in the world and therefore the country will have to take steps to be as a top exporter by bringing in changes as and when required.

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