In the first 7 months of 2022, cashew nut exports recorded a 2-digit decrease. A flexible production plan and improved quality, etc are recommended by experts.
CASHEW NUT EXPORTS DECREASED BY 2 DIGITS
According to the General Department of Customs, Vietnam’s cashew nut exports in July 2022 decreased by 3.2% in volume and 8.7% in value compared to June 2022; and decreased by 17.5% in volume and 26.1% in value compared to July 2021. Generally, in the first 7 months of 2022, cashew nut exports reached 294 thousand tonnes, valued at $1.76 billion, down 10.5% in volume and 12.1% in value compared to the same period in 2021.
The global raw cashew nut market is forecast to reach about $7 billion by 2025. (Photo: Internet)
The Vietnam Cashew Association (VINACAS) shared that the Covid-19 pandemic and increased freight rates have caused many orders signed in 2021 but not delivered yet, and must be outstanding until 2022.
Notably, although the average export price reached about $5,792/tonne, up 1.45% compared to the same period in 2021, the import price of raw cashew nuts from Africa since the beginning of the season has increased by 15-20% compared to the same period. The increase in export prices has not caught up with the increase in raw material import prices. This makes importers and processors tend to be slow to buy raw materials.
According to the General Department of Customs, from the beginning of the year to July 15, the whole country imported nearly 1.26 million tonnes, with a turnover of nearly $1.84 billion. Compared to the same period last year, imports decreased by more than 670 thousand tonnes, equal to 34.82%; while turnover decreased by 37%, equal to $1.077 billion.
Rising inflation in many major global economies has led people to tighten spending, especially on high-cost products. It is forecast that Vietnam’s cashew nut exports in the remaining of 2022 will still face difficulties.
TAKE ADVANTAGE OF FTAs
In addition to the adverse factors, the Export-Import Department assessed that the global cashew nut market is forecast to grow by 4.6% on average in the period 2022 – 2027. Global trends are favoring vegetarian, vegan diets, and alternative sources of protein, resulting in increased demand for seeds and processed products from seeds.
In South America, the consumption of cashew nuts in the diet has remained stable. Also in Asia, the cashew nut is used as the main ingredient to prepare various sweet and salty dishes.
China is leading the region in cashew nut imports. Seeds have become a major component of the Chinese people’s diet since the birth of the national health policy called “Dietary Guidelines for The Chinese”, emphasizing the daily consumption of seeds.
In Europe, due to growing health awareness, cashew nut consumption is increasing. Recently, cashew nut has also become increasingly used as an ingredient in dishes and snacks.
France is the third-largest importer of cashew nuts in the EU. Although there are tax advantages thanks to the EVFTA, Vietnam’s cashew sector has not exploited this market well. According to the International Trade Center (ITC), in the first 5 months of 2022, Vietnam’s market share of total French imports fell from 64.95% in the first 5 months of 2021 to 63.68% in the first 5 months of 2022.
According to the Vietnam Commercial Counsellor in France, the competitiveness of Vietnamese cashew nuts in this market is not high. French supermarkets and hypermarkets do not have Vietnamese branded cashew nut products. Most businesses have only focused on wholesale but brand development.
To increase product value and market share of Vietnamese cashew nut in France, the EVFTA is a good tool but in addition to the rules of origin to enjoy tariff preferences, meeting EU and French regulations is more important. The EU and French food-related legal systems are complex, with separate regulations on mycotoxins, pesticide residues, heavy metal content, and microbiological pollutants. Before bringing goods to the French market, businesses should find a lawyer’s office to assist in updating the latest information, building contracts, and in the transaction process to avoid risks.
On the side of the Vietnam Cashew Association, Mr. Pham Van Cong – Chairman of the Association emphasized that, in addition to focusing on raw material and export cashew nut quality, the Cashew sector needs to promote in some key markets, especially those with the signing of Free Trade Agreement (FTA) to make the most of import tax incentives.
With the difficulties being faced, the Cashew sector recommends adjusting the export target to $3.2 billion, down $600 million compared to the 2022 target of $3.8 billion.