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  • Cashew exports promote deep processing to take advantage of FTAs 02/27/2024

    Feb 27th, 2024

    According to preliminary statistics compiled by the General Department of Customs, Vietnamese cashew exports in January reached 65,142 tonnes, equivalent to US$351.2 million, a slight increase of 3.3% in volume and a rise of 2.3% in turnover compared to the previous month. ​Compared to the same period from last year, the nation's exports increased dramatically by 139.4% in volume and 126% in turnover. This also marks the strongest growth rate recorded among all agricultural products. According to the Vietnam Cashew Association (Vinacas), the country's cashew export turnover reached US$3 billion in 2022, rising to US$3.6 billion in 2023. However, the development of cashew trees and the cashew nut processing industry continues to face limitations and challenges. According to the Cashew Research and Development Center, the challenges facing local cashews at present are that processed products are not diverse with low added value and poor competitiveness. Furthermore, cashew seed cultivation and transfer techniques still have certain limitations. Indeed, cashew development still faces the risk of impacts from natural disasters and climate change. The cashew industry is therefore still facing fierce competition as Cambodia, West African, and East African countries all have large, suitable land funds and are boosting the development of cashew trees and gradually investing in processing and exporting cashew kernels. However, experts say that demand for cashew nuts in many markets has improved since the end of 2023, opening up brighter prospects for Vietnam's cashew exports in the year ahead. Therefore, the cashew industry still has plenty of room for export growth. The current low price of cashew nuts will help to promote consumption of this healthy product, while productivity and harvest output remain fairly stable. Promoting deep processing to take advantage of FTAs The Vietnam Cashew Association stated that the global cashew market is forecast to grow by an average of 4.6% in the 2022 to 2027 period. The global trend towards vegan and plant-based diets has increased demand for nuts and nut-based foods, including cashew nuts. In the nation, forecasts anticipate that the cashew output of the 2023 to 2024 crop season, despite adverse weather and many pests, will still maintain about 170,000 tonnes of cashew kernels. Currently, the country holds the number one position in the world in cashew exports, accounting for 80% of total global output for 16 consecutive years. ​As a leading export enterprise in the Vietnamese cashew industry, Vu Thai Son, chairman of the Board of Directors of Long Son Joint Stock Company, commented that the cashew consumption situation this year will be brighter than 2023. In particular, demand for deeply processed cashew nuts is continuing to increase and FTAs are also bolstering the nation’s export of this product. The FTAs have a positive impact on ’he export of deeply processed cashew nuts because in the past governments imposed import taxes on these products to protect domestic production. However, in the FTAs that Vietnam has signed, deeply processed cashew nuts imported from the country have had their tax reduced to 0%. Therefore, along with promoting investment and production of deeply processed cashew products and high-quality cashew nuts, the industry has been able to reach many demanding customers and sell at better prices than the average price. In general, businesses are also actively performing green transformation and social responsibility. Moreover, it can be viewed as necessary to improve the value-added chain in the cashew processing industry, especially deeply processed products, proactively minimize exports in the form of unofficial quotas, and moving towards implementing official exports under contracts to the Chinese market. This should be done by restructuring the export market towards diversifying the market without depending on any one market, taking full advantage of signed and effective FTAs, and supporting and creating favourable conditions for businesses to access the global market. Vietnam has maintained its leading position in the world for 16 consecutive years in terms fo cashew kernel exports, accounting for nearly 80% of total global output. According to Bach Khanh Nhut, vice chairman of the Vietnam Cashew Association, the cashew industry currently needs the unanimous efforts of all individuals, organisations, and businesses in the supply chain and value chain and the effective State support. Regarding policy, the State needs to take measures aimed at protecting the domestic cashew processing industry by giving clearer regulations on the import and preliminary processing of cashew kernels, he added.