| Vietnam Cashew Nut Industry – Part 1 |  |  |
VIETRA
 DE - Vietnam is among the biggest manufacturers and exporters of cashew nut in the world. Since 1990, Vietnam has emerged as a main producer of cashew nut in the Asia. During 1980s, Vietnam started growing cashew as a high-economic plant. In 1990s, the area of land to grow has been expanded to rural areas. Vietnam Cashew Association (VINACAS) was established in 1990 to facilitate the development of Vietnam cashew industry.
Cashew was mainly grown in provinces such as Dak Nong, Daklak, Binh Duong, Binh Phuoc, Tay Ninh, Long An, Kien Giang, Kon Tum, Gia Lai, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan, Lam Dong, Binh Thuan and Dong Nai. In which Binh Phuoc accounts for 50% of the total cashew production of the whole country.
Vietnam Raw Cashew sector
Cashew is grown in 300,000ha in Vietnam with the average productivity of 1,000kg/ha. The seeds are selected and germinated on mountains, choosing proper seasons for seeding and harvesting and using Integrated Pest Management (IPM). Vietnam has set a target to increase the productivity from 1,700kgs to 2,000kgs per ha. However, Vietnam gets the main difficulty of not being able to allocate more land to grow cashew. Therefore, Vietnam has chosen to improve the productivity. In 2013, Vietnam had an excellent crop of 400,000 tons. The target for 2014 is set at 425,000 tons.
Vietnam Cashew Kernel Market
Vietnam’s cashew processing industry has started since 1990s. During last three decades, Vietnam has raised itself into being the second largest processor of raw cashew and the largest exporter of cashew kernel (for the eight consecutive years since 2006).
In 2013, Vietnam exported 257,000 tons of cashew kernel valued at US$1.8 billion, imported raw cashew worth US$0.52 billion and achieved a total export turnover of US$ 2.2 billion from cashew kernel and by-products. In 2014, Vietnam targets to export US$ 2.2 billion. In 2013, Vietnam exported around 90,000 tons of cashew kernel to the US, 55,000 tons to China, 50,000 tons to the European Union, 50,000 tons to the Middle East countries and 14,000 tons to Australia. Vietnam accounts for 92% market share of cashew kernel in Australia market, estimated at 15,058 tons and 90% market share of cashew kernel in the New Zealand, estimated at 2,536 tons. Currently, Vietnam has exported cashew kernel to more than 90 countries and regions.
Vietnam cashew processing industry
Vietnam’s current processing capacity exceeds 1.2 million tons. There are about 500 large and medium scale processing sites and 500 small scale ones. All large scale sites have gained GMP, ISO and HACCP certificates. Vietnam has also developed processing capability to add value of roasted, salted roasted and coated with honey or chocolate cashew. Factories are designed to make use of human resource and machinery capabilities to maximize the profit for professors. Cost of financing is about 5% to 7% for the large processors and 10% to 12% for medium scale processors.
Challenges for Vietnam’s cashew processing industry
Vietnam is trying to control the costs, commit to customers and cooperate with suppliers to ensure the sustainable development of the cashew industry. In the last year, VINACAS has coordinated with The Cotton and Cashew Council of Cote D’Ivoire to strike a win-win partnership. The two countries have signed a Memorandum of Understanding (MOU), in which Cote D’Ivoire would provide high quality raw cashew nuts to Vietnam. In contrast, Vietnam would let Cote D’Ivoire process about 20-30% of its raw cashew nuts through transfer of technology of processors and other related assistance. Both countries have agreed on resolving issues on mutual benefits. Vietnam is also helping the neighboring Cambodia to increase productivity to ensure the continuity supply of raw materials.
The machinery manufacturers are researching to decrease the number of laborers, reduce cost and improve product consistency. In 2013, Vietnam has sent a business delegation to Australia and expanding business opportunities in this market. Vietnam is also trying to build the relationship with the Middle East countries. At the same time, Vietnam has also identified the importance of the local demand and is keen on improving the domestic demand of cashew kernels.
The annual growth rate of Vietnam cashew industry is 15.31% for over a decade (from 2001 to 2010). However, in the last five years, the productivity decreases. From 2009 to 2013, the area and productivity of raw cashew nut has correspondingly decreased at 3.51% and 5.56%. The comparison between profit of cashew with that of other trees such as rubber, pepper, etc. has led to reducing the growing area of cashew in Vietnam. In order to increase the supply of raw cashew nut for processing, in the Cashew Festival in Binh Phuoc, Vietnam has launched the program to develop growing land of cashew in Cambodia and Laos. By this way, Vietnam is trying to increase the supply of raw cashew from neighboring countries to meet the demands of development of the local processing industry.
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