Vietnams demand-supply cashew export paradox

Vietnamese cashew producers have been improving their technology and equipment to meet importers’ increasingly strict standards.

Producing cashews for export

Strict requirements

The foreign demand for cashews, especially from EU states, is on a continual upward curve, but Vietnam is facing major challenges in its ability to meet the demand.

This year, Vietnam is expected to export cashews worth around US$3.3 billion in all, US$1 billion of them to EU markets, says Pham Minh Tri from the Center for Agricultural Policy (CAP) of the Ministry of Agriculture and Rural Development.

However, the EU, the US and many Asian markets have applied increasingly stringent food safety and hygiene, environmental, social and other quality standards, he added.

One of these is a requirement of material traceability, something in which Vietnam is hampered given that it still has to import raw materials from the Ivory Coast, Nigeria and Ghana.

In order to meet foreign market standards, says Tri, Vietnamese cashew enterprises should grow their own raw materials to ensure quality and traceability, and adhere to international labor practices, such as worker protection and non-child labor.

Nguyen Duc Thanh, Chairman of the Vietnam Cashew Association (VINACAS), says in response that expanding the cashew growing area is difficult in light of various policy limitations on land ownership and size. He suggests, instead, that cashew businesses develop clean, organic cashews to increase export value. Consumers are increasingly interested in organic cashews that can fetch prices 60 percent higher.

Nguyen Van Hieu, deputy director of the Binh Phuoc Province Department of Industry and Trade, says Binh Phuoc is building some models for safe cashew intensive cultivation based on the Vietnamese Good Agricultural Practices (VietGAP) to meet export traceability requirements. Binh Phuoc’s cashews have become part of the national cashew-branding program.

Quality improvement

Bach Khanh Nhut, deputy director of Vinacontrol Ho Chi Minh City, says Vietnamese cashew producers and exporters have gradually improved and modernized technology and equipment. They are highly aware of the need for effective branding and high product quality, and most have been awarded the Hazard Analysis Critical Control Point (HACCP) certification. Large cashew production facilities have been applying such quality management systems as ISO 22000, FSSC 22000, and BRC, among others, Nhut adds.

Experienced in exporting cashews to many EU countries, Ta Quang Huyen, general director of the Hoang Son I Co., Ltd (Binh Phuoc Province), says apart from having ISO 22000, FSSC 22000, and BRC certifications, exporters must ensure on-time delivery and contract observance to enter discerning markets.

Vietnam’s target of exporting cashews worth US$3.3 billion in 2017 is feasible, as in the first eight months of this year, cashew exports hit US$2.2 billion, up 24.9 percent from the same time last year.