Cashing-in on Sustainable Cashew Trade

2 The chairman of the Vietnam Cashew Association (VINACAS), Nguyen Thai Hoc said that in 2010 Vietnam exported 198,000 tonnes of cashew kernels (half of all cashew kernels exported worldwide last year) worth US$1.135 billion, and that 2010 is the fourth year in which Vietnam was the biggest cashew exporter in the world. But difficulties that Vietnamese cashew exporters are expected to face from 2011 could make it hard for them to maintain the country’s first ranking in cashew export.

There are 300 businesses processing cashews in Vietnam, 25 of which have been awarded GMP (good manufacturing practice), HACCP (hazard analysis critical control point), ISO 9001, ISO 14000, ISO 22000 and BRC certifications. Many businesses make cashew products with a high added value, such as cashew kernels fried with salt, butter and spices, and cashew-based confectionery. Vietnamese cashew products are exported to more than 80 countries and territories worldwide including the US, China, the Netherlands, Australia and many more.

Large cashew plantations are found in Binh Phuoc and Dong Nai provinces. In Binh Phuoc, cashew has become a major agricultural crop and policies have been issued to assist cashew farmers and businesses to develop seeds and approach advanced techniques, capital and machinery and equipment for cashew development. Deputy Minister of Agriculture and Rural Development Luong Le Phuong said that cashew is one of the six key farm produces, and that although many difficulties exist this crop is developing well. The cashew sector encountered and will face many challenges ahead, he said.

The cashew cultivation area recently shrank and tends to further decrease. The lack of workforce and unstable raw material supplies cause cashew processors to face difficulties and to import cashew for production. A number of cashew processors operate outdated technology, while the cashew sector’s production in general is scattered and lacks connectivity. Although Vietnam ranks first or second among countries and territories worldwide in terms of cashew production, the Vietnamese cashew industry not yet approaches the global value chain and has no trademark.

Binh Phuoc Province People’s Committee deputy chairman Nguyen Van Thanh noted that the cashew cultivation area shrank because income from cashew is less competitive than that of other cash crops. Income that cashew farmers earn is unproportional with related cashew product value, while cashew is facing a climate change danger.

Having acknowledged the cashew industry’s problems, VINACAS recently submitted the Government a strategy on sustainable development of Vietnam’s cashew sector from 2010-2020. Under this strategy, the cashew sector will develop on a sustainable basis in all of stages of cultivation, purchase, processing and sales, both inside and outside Vietnam. To be specific, 190,000 tonnes of cashew kernels will be processed, while 150,000 tonnes of cashews will be exported and 10,000 tonnes sold domestically in 2015. The numbers for 2020 are 220,000 tonnes, 120,000 tonnes and 35,000 tonnes, respectively. Intensively processed products will include cashew kernels fried with salt and spices, cashew-based confectionery, cashew kernels coated with chocolate, and more.

Three major cashew growing areas will be located in the southeastern region, the Central Highlands and the south central coastal region. About 200,000 hectares of high quality cashews will be grown in the southeastern region, while 100,000-150,000ha of cashews will be planted in the Central Highlands and the south central coastal region. Other plans include developing 20 central cashew producers and traders that are competitive enough for trading with foreign markets and have high added value products with a ‘Made in Vietnam’ label, and construction of trademarks for cashew products of Binh Phuoc and Dong Nai provinces and VINACAS.

VINACAS chairman Nguyen Thai Hoc said that the cashew sector needs an estimated VND4.5 trillion from 2011-2015 and VND6.5 trillion from 2016-2020 to realize the above-mentioned development plans. That investment capital will be mobilized from every economic sector, banks inside and outside the country, state preferential loans, and through issuing enterprise shares and bonds.

Deputy Minister of Agriculture and Rural Development Luong Le Phuong said at the 2011 Vietnam Cashew Rendezvous, which recently took place in Ho Chi Minh City, that the Government now has many policies assisting businesses in equipment renovation and preferential loan interest rate approach, and that cashew businesses should work to approach these policies. The cashew sector should increase trade promotion activities, work with the Ministry of Industry and Trade to construct programs for promotion of trade to different markets especially North America, China, the EU and Japan, and make major trade promotion events happen in important markets. Localities especially those in the southeastern region, which have a large cashew area, should see to it that if current cashew varieties were suitable to their soil and climate conditions or not. Domestic businesses should form a Vietnam cashew value chain as part of the global value chain.

Establishment of a fund for raw cashew price stabilization is recommended to assist farmers to maintain cashew cultivation in hard time./.


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