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  • The cashew industry faces many disadvantages, the Articles Association proposes to lower the export turnover target 07/22/2022

    Jul 22nd, 2022

    According to data from the General Department of Customs, in June 2022, cashew nut exports were estimated at nearly US$285 million, down 6.9% in volume and 6.5% in value compared to May 2022. Accumulating 6 months, export of cashew nuts is estimated at more than 1.5 billion USD, down 9.2% over the same period in 2021. Consumption is difficult, orders are falling According to the Vietnam Cashew Association (VINACAS), this year it is very difficult to consume cashew kernels due to influences from the destination markets. Currently, inflation in countries has reached a very high level compared to the previous period. Specifically, the inflation rate in the United States has reached 8.6% in the first 5 months of this year, this is the highest increase since 1981 until now, in the context of rapidly increasing food and gasoline prices and no sign of cooling down. Especially for the EU, the inflation rate continued to increase very high in May and June 2022. Mr. Tran Van Hiep, Vice President of VINACAS said that world developments such as the Russia-Ukraine conflict are affecting the consumption and export of Vietnam's cashew nuts. Specifically, in 2021, Russia is the 11th ranked market out of 104 export markets of Vietnamese cashew kernels with an export value of nearly 62 million USD. Since the Russian-Ukrainian conflict occurred, Russia was excluded from the SWIFT payment system, the export of Vietnamese cashew nuts to Russia faced difficulties in payment, greatly affecting the export of cashew kernels to this market. “Inflation in the United States and Europe is spreading around the world, with the prices of goods being as expensive as they are today, people have to spend more money on essential needs, which leads to negative consequences. Non-essential goods such as cashew nuts will consume slowly and cashew prices are also difficult to increase at this time. Meanwhile, Vietnam's other major market, China, still maintains the "Zero Covid" policy, making the export of cashew kernels as well as other agricultural products continue to be at a disadvantage in the Chinese market," said Hiep. reality. "The export situation continues to face difficulties because shipping rates are still anchored at a high level compared to before the Covid-19 epidemic. Meanwhile, businesses are having problems with the price of raw cashews increasing more than 15- 15. 20% compared to the previous year, plus the cost of gasoline and transportation continuously increased while the price of cashew kernels for export did not increase or even decrease. Mr. Vu Thai Son, Chairman of Binh Phuoc Cashew Association. In addition, Mr. Vu Thai Son, Chairman of the Board of Directors of Long Son Cashew Joint Stock Company, Chairman of Binh Phuoc Cashew Association, said that purchasing power is slower than previous years because from 2021 many customers in the market Major markets have increased their purchases of cashew kernels due to concerns about the Covid-19 epidemic, resulting in inventories extending into this year. Cashew nuts are currently very difficult to sell because they are not an essential commodity for consumers in Western countries and China. “The price of raw cashew nuts is at a very high level compared to the selling price, the export processing cost is high while the selling price is low, making it difficult for processing plants to break even, not to mention the profit. In the cashew processing capital of Binh Phuoc, many small processing factories have had to temporarily suspend production to "cut losses", large factories also reduce their capacity and process in moderation because the more they process, the more they lose. Mr. Vu Thai Son shared. Cashew kernel exports are forecast to decrease in the following months, possibly lasting until the end of 2022. According to the plan set out by the Ministry of Agriculture and Rural Development for the cashew industry, in 2022 the whole cashew industry sets an export target. $3.8 billion, an increase of $200 million compared to 2021. However, in the current context, VINACAS has proposed to adjust the target of export turnover for the whole year at a modest level of 3.2 billion USD, down about 400 million USD compared to 2021 (in 2021, cashew exports will reach over $3.6 billion). Worrying about US PRODUCT QUALITY Mr. Tran Van Hiep, Vice Chairman of VINACAS, said that in the first 5 months of 2022, cashew businesses imported about 968,000 tons of raw cashew nuts from abroad with a value of nearly 1.4 billion USD, down 35.24% in value. volume and decreased by 37.84% in value. However, if we consider the price of raw cashew imports from Africa from the beginning of the crop to now, it has increased by 15-20% over the same period last year. In 2021, the export of processed cashew kernels will bring in 3.64 billion USD, up 13.3% compared to 2020. However, the whole country has imported 2.83 million tons of raw cashew, worth 4.23 billion USD. in 2021, causing the entire industry to have a trade deficit of nearly $600 million. 2021 is the year of trade deficit for the first time in more than 30 years when Vietnam exports cashew kernels to the world. The reason for the sudden increase in the amount of imported raw cashew nuts last year, doubling every year, was due to the impact of the Covid-19 epidemic, the lack of empty containers on a large scale in the export dimension, while the afternoon The goods returned were in excess of empty containers, so businesses took advantage of importing many raw materials. Due to the sudden increase in the total amount of raw cashew nuts last year, it led to a surplus of raw materials put into production this year. "Vietnamese cashew processing enterprises should pay attention to the preservation of raw materials and the preservation of processed products. To ensure the quality of cashew kernels when exporting, to meet the standards of the export market." Mr. Tran Huu Hau, Deputy General Secretary of VINACAS. Mr. Tran Huu Hau, Deputy Secretary General of VINACAS raised the issue, due to the situation that many batches of raw cashew nuts imported from Africa to Vietnam have to be stored for a long time, reducing quality, not ensuring the quality of export processing. Similarly, some batches of processed cashew nuts also had to be stored, used preservatives, and anti-termite until they were shipped out, they were found to have preservative residues, some shipments were returned or returned by partners. warning. VINACAS asked the authorities to support updating and guiding the implementation of new regulations on food safety control of foreign markets, especially the markets of China, EU, US... For the Ministry of Agriculture and Rural Development, the association recommends continuing to support research and development of specialized technical standards and regulations for cashew nuts and by-products of cashew trees to have a basis for assessment. quality price. At the same time, the Agriculture sector needs to evaluate and plan for a stable and long-term cashew growing area. Regarding the market, VINACAS also wants the Ministry of Industry and Trade to support cashew businesses to participate in domestic and foreign trade promotion programs, enhance information about markets, customers, consumption trends, and trade risks. and how to respond effectively.