(February 27, 2024) The cashew market is favorable, but the risk of loss must be avoided

The world cashew market is good, but Vietnamese cashew businesses need to avoid the lesson of losses like what happened in 2023.

Processing cashew kernels for export. Photo: IT.

Demand for cashew nuts is increasing

After decreasing in both export volume and value in 2022, by 2023, cashew exports have grown again and exceeded the 600 thousand tons mark for the first time. The upturn in cashew exports is forecast to continue in 2024.

Even in the first month of the year, cashew exports grew well. Information from the Vietnam Cashew Association (Vinacas) shows that in January, cashew industry enterprises exported nearly 64 thousand tons of cashew kernels, worth 339 million USD, an increase of 137% in volume and 125% in value. compared to the same period in 2023.

Mr. Ta Quang Huyen, General Director of Hoang Son 1 Joint Stock Company, said that cashew nut consumption this year will still be good. In fact, global consumption demand is still on an upward trend in recent years, even if exports suddenly decrease significantly in 2022. Because in fact, the decrease in exports in 2022 is not due to demand. Consumption demand decreased because importers were less likely to build large inventories due to high inflation, the outbreak of the Russia-Ukraine conflict, and importers themselves bought a lot of cashew nuts in 2020 and 2020. 2021 to reserve to prevent the risk of supply disruption due to the Covid-19 epidemic. Thanks to the still increasing demand, by 2023, cashew exports have increased strongly again and are expected to continue to grow in 2024.

Speaking at the 13th Vietnam International Cashew Conference, taking place in Quang Binh from February 26-28, Mr. Michael Waring, Chairman of the International Nut and Dried Fruit Council (INC) also said that, except for decline in 2022, in general, the demand for nuts (including cashews) is still on the rise globally.

Ms. Chen Ying, Secretary General of the China Nut Association (CNA), said that the demand for imported nuts has tended to increase from 2019 until now, even when the country's economy is still not completely developed. recovery after the Covid-19 epidemic. Among the nuts that are widely consumed in China, cashews and pistachios are two types of nuts that this market depends entirely on imports. As for cashew nuts, 70% of goods come from Vietnam.

Although the market is progressing smoothly, Vietnam's cashew industry is still facing many challenges in 2024. First of all, the price of exported cashew kernels is still not good, and even tended to decrease at the beginning of this year. In January, the export price of cashew kernels reached an average of 5,311 USD/ton, down about 5% over the same period last year. This has led to the same growth, but the growth in turnover is lower than the growth in export volume.

The price of raw cashew nuts is not consistent with the price of cashew kernels, which is also a big concern for the cashew industry. The first cause of this situation is that some raw cashew producers in Africa, wanting to develop domestic processing, have stipulated minimum export prices for raw cashews, imposed taxes and many fees on raw cashew nuts. Raw cashew nuts for export. This makes many exporters unable to reduce the price of raw cashew nuts to match the price of cashew kernels on the world market.

The development of processing in many raw cashew exporting countries is also gradually putting pressure on Vietnam's cashew industry, from the increasing difficulty of buying raw cashews to increasing competition in the global cashew kernel market.

Mr. Adama Coulibaly, General Director of the Cotton and Cashew Council of Ivory Coast, said that the country is promoting the development of cashew processing with the goal of processing 500-600 thousand tons of raw cashew nuts/year, equivalent to nearly half of raw cashew output. According to Mr. An Dara, Chairman of the Cambodia Cashew Federation, currently only about 5% of Cambodia's raw cashews are processed domestically. Cambodia is attracting investors to increase the proportion of raw cashews processed.

Avoid repeating the story of buying and selling

Looking back at 2023, although cashew exports will grow well in both volume and turnover, the vast majority of cashew industry businesses will not be profitable or even lose money. The main reason is that at the beginning of the season, many factories massively bought raw cashew nuts at high prices due to receiving incorrect information about the season and output from brokers, while cashew kernel prices continuously decreased. down (one of the important reasons is that many factories are racing to sell due to financial pressure).

Therefore, while there is no need to worry much about the market in 2024, businesses need to avoid the lessons of last year's losses. According to some traders in the cashew industry, to ensure production and business efficiency, businesses should not rush to buy raw cashews to reserve in large quantities right from the beginning of the season when this year's cashew output is estimated. The forecast is quite abundant. Instead, businesses need to stay calm, wait until the price of raw cashew nuts is at a reasonable level before purchasing, and should only buy raw cashew nuts when they have a contract to export cashew kernels to balance the price.

Mr. Vu Thai Son, Chairman of the Board of Directors of Long Son Joint Stock Company, said that the total capacity of Vietnam's cashew processing factories is currently too large. Therefore, businesses need to boldly cut processing capacity to reduce the pressure on raw cashew nuts from each factory as well as the entire cashew industry. When the pressure to import raw cashew nuts decreases, it will cause the price of raw cashew nuts to drop to a more reasonable level. At the same time, the financial pressure of businesses will also decrease, thereby helping businesses not have to massively sell cashew kernels like last year. This may contribute to the increase in cashew kernel prices.

Vinacas and the Ivory Coast cashew industry signed a memorandum of cooperation within the framework of the 13th Vietnam International Cashew Conference. Photo: Thanh Son.

According to Vinacas, although the global cashew industry supply chain is recovering after the Covid-19 pandemic, there are still places that do not "match" each other, "misalign" each other, causing many stages in the value chain to suffer losses. great harm. Therefore, Vinacas hopes that the 13th Vietnam International Cashew Conference will be an opportunity for parties to meet, exchange, discuss, and also stabilize the global cashew supply chain.

Thanh Son
Source: Vietnam Agriculture Newspaper