Cashew sector to need VND11 tril.

HCMC – The local cashew industry will need around VND11 trillion to sustain development within the next ten years.

The sum will help the sector expand growing areas, modernize production and invest in research, according to the 2011-2020 cashew development plan devised by the Vietnam Cashew Association (Vinacas).

The fund will be mobilized from banks, corporate bond sales, share issues and the State budget.

Vinacas plans to pass the project to relevant ministries and submit it to the Government in the fourth quarter of this year for approval. The industry will spend VND4.5 trillion in the 2011-2015 period and VND6.5 trillion until 2020.

The industry is facing difficulties due to unstable material sources as farming families have switched to growing rubber or cassava for higher profits. Besides, cashew export in the coming years will be affected by a labor shortage and higher input costs.

According to Vinacas, the capital will help to ensure a stable cashew material cultivation area of 315,000 to 360,000 hectares in the country, 200,000 to 250,000 hectares in Cambodia and 50,000 to 100,000 hectares in Laos. Through this financing, enterprises can also train workers, improve processing technology and promote business at home and abroad.

Vietnam is the world’s leading cashew exporter but 30% of unshelled cashews are imported from Africa. As African nations plan to process cashews in the future as well, the local processing industry will certainly suffer a material shortage.

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Cashew sector faces serious material shortage

The lesson of lack of raw materials has recurred in the cashew sector with the raw cashew shortage forecast to hit 150,000 tons, according to the Vietnam Cashew Association (VINACAS).

This year’s cashew output was only 300,000 tons, 50,000 tons less than the previous crop due to bad weather and the shrinkage of cashew acreage in the southeastern region.

VINACAS said the situation has taken place for many years as local cashew farms were capable of meeting only 60 percent of processors’ demand and the country had to import between 200,000-250,000 tons of raw cashew nuts from Africa .

To reach the target of exporting 190,000 tons of cashew nuts for US$1 billion by the end of this year, the country needs 700,000 tons of raw cashew nuts. So far this year, enterprises have imported over 120,000 tons of cashew.

However, imports of raw cashew nuts were difficult as the world cashew output decreased 20 percent, making the prices of raw cashew increase by 30 percent over the same period last year, equal to $1,000 per tonne.

VINACAS has asked the government to assist cashew processors with capital to buy raw materials and consider reducing the tax on raw cashew imports to zero percent.

In the first seven months of the year, Vietnam exported about 100,000 tons of cashew nuts, earning $531 million, a year-on-year increase of 5 percent and 23 percent, respectively.

Vietnam has been the world’s largest cashew exporter, making up 37 percent of the global market. Vietnamese cashew products have been exported to over 40 markets, with the US and the Netherlands being major markets.

 

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