Vietnamese Cashew Sector Needs More Research

This entry was posted on Thursday, November 29th, 2012 and is filed under Cashew.

If the intention of the Vietnamese Government is to bring down the number of cashew processors by 50%, a very interesting situation will arise in the Vietnamese as well as global cashew trade.

Fixing a compulsory  processing target of 2500 Tons/year is too much to their cashew sector. In our view, the beginning of ‘this kind of a minimum compulsion’ should be just around 1000 Tons/year. However, gradual rise in this minimum in subsequent years may become a successful step.

Other Important factors –

1) When processing cost is much cheaper in the raw cashew exporting regions of Africa, What is the use of imports from those areas? Transportation costs and quality deterioration during the sea transit are other huge burdens!

– In India, raw cashew import is a lucrative business mostly because of the world number one position in kernel consumption.

2) Heavy losses in their raw cashew import is causing capital decrease in the Vietnamese cashew industry. When the capital decreases, processors can not and will not pay a reasonable price to local farmers.

– When they try to make up their losses, domestic farming community suffers and farmers shift to other crops.

3) Vietnamese processors can not stock domestic inventory for a full year as bank interest rate is their biggest problem. Therefore, the industry can not survive without imports.

– It is better to fix an import limit or a quota, which should be clearly turnover based and also in according to quality related past performances.

4) Vietnamese cashew industry is nothing but a spectator to the global Forex fluctuations.

– When the Indian and Brazilian currency depreciated, there was no response from the Vietnamese side .

5) Nowadays, February and March are usually worst months in terms of the Indian consumption.

– Even then, sometimes prices may go up if there is no large-scale carry forward kernel stock or when processors go for a massive cut in their daily production.

Filed Under: Cashew