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Vietnam's 2016 cashew exports exceed US$2 billion despite volatile market after Brexit PDF Print
Monday, 23 January 2017 11:17

VIETRADE - In 2015, Vietnam is the largest producer of cashews in the world (1,237,300 metric tons), accounting for 28% of global production and 42% of global exports (perfectinsider.com). Vietnam has been the world’s top cashew nut exporter for the last 10 consecutive years, with the export volume accounting for 50 percent of the world’s total output (vietreader.com). In the first five months of this year, the cashew industry exported more than 118,000 tons of cashew nuts, bringing in about US$1.1 billion, exceeding the export plan in terms of both volume and value (Vinacas).

 

After the Brexit vote results were announced, experts said that Vietnam’s exports may be harmed due to Brexit’s direct hit on currency moves, battering the British pound and making Vietnamese exports less competitive.

 

However, the country is still on track to hit this year’s plan to process and export 350,000 metric tons of kernels at US$2.5 billion of revenue, said Nguyen Duc Thanh, chairman of the Vinacas, although it is certainly being hit hard as a result of currency fluctuations in the short-term. Over the long-term, the market will largely remain unaffected by the UK’s decision to exit the EU.

 

According to the Ministry of Agriculture and Rural Development, from the beginning of the year to the end of September 2016, despite high prices, Vietnam’s cashew exports still reached 255 thousand tons, valued US$ 239 million, an increase of 4.5% in volume and 13.6% in value over the same period last year.

 

High price has partly been driven by the fact that over the past year, an unusual dry spell in most of the cashew cultivated areas resulted in acute water shortages. For example, in Binh Phuoc province, home to more than half of Vietnam’s crop, the drought has stunted cashew crop, keeping them from producing buds, much less flowers. Concerning cashew quality in the coming years, buyers have bought more aggressively this time to ensure having quality products, which has made domestic and international price jumped (Bloomberg.com).

 

The average prices of cashew exports during 8 months of 2016 reached US$ 7,827 per ton, up 7.6% compared to the same period last year. The United States, the Netherlands and China remained the third largest import markets of Vietnam’s cashews, with  respective market shares of 33.6%, 13.7% and 13% of the total export value. Particularly, the US was the biggest importer of cashew from Vietnam. In eight months, the markets having high increased cashew export value were Israel (45%), Germany (19.1%), the Netherlands (24.4%), United Kingdom (22%), China (21.7%) and Italy (15.3%). In the first 10 months of 2016, Vietnam exported 291,000 tons of cashew nuts, reaping US$2.33 billion (VNS).

 

This was the highest level for many years in the context of export demand increased. Overall, in the past 9 months, dried cashew prices increased sharply and reached a peak. If at the beginning of the year, dried cashews were traded at VND 39,000-40,000 per kg, now the price has risen to VND 9,500-10,000 per kg to a new peak of VND 49,500 per kg. This is the highest level for many years due to scarce domestic supply, high import prices of raw cashews, while export demand has increased (VNS).

 

However, the sector is still faced with challenges. The best way to promote the country’s cashew industry is to shift the focus from price to quality,” said Thanh. In order to increase the export value of cashew nuts, Vietnam should be prepared to export more processed products, rather than exporting raw or preliminarily processed products. Besides, more attention should be paid to cashew varieties improvement. Currently, the cashew variety that has existed in Vietnam for years, three new varieties are bringing high yields of up to 2,500-4,000 kilos per hectares in good cultivation conditions.

 

Vinacas Chairman underscored the importance for the cashew industry in particular and agriculture in general to focus on country’s national sanitary and phytosanitary framework. To fully capitalize on the export potential – and to be competitive – product coming from production cost environments such as Vietnam, must meet the high quality standards by importers.



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