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When prices soared, Vietnamese cashew processing companies could only obtain 50% of their cashew raw material output from procurement contracts with African partners.
This information was released by the Vietnam Cashew Association (Vinacas) on the evening of May 31.
Vietnam’s cashew processing factories rely on imports. They import more than 3 million tons of raw cashews each year, of which about 2.2 million tons come from Africa, mainly West Africa. Domestic supply is only guaranteed to be 10%.
However, the price of raw cashew nuts in West Africa is rising every day. In February, the price was only around $1,000-1,050 per ton, but now it has reached $1,500-1,550 per ton. The reason is that due to crop failure in the region, some countries have adopted a policy of temporarily stopping the export of raw cashew nuts to support domestic factories.
As a result, some West African partners asked for support to increase prices, postpone delivery or not provide receipt documents to Vietnamese manufacturers. Mr. Ta Quang Huyen, Chairman of the Board and General Manager of Hoang Son I Company, said that he signed a contract to purchase 52,000 tons of West African raw cashews, but only received 25,000 tons at the correct price, about 12,000 tons were lost, and the rest had to be paid for at a higher price.
Vinakas said that currently the cashews in bulk at sea continue to be sold at higher prices, but some processors still have to buy them to get enough raw materials to fulfill production contracts with customers. However, merchants have been unable to balance the price of cashew kernels and are therefore confused.
At the same time, many raw cashew nut shipments are delayed or the quantity is less than the contractual provisions, so Vietnamese processors are facing a shortage of raw materials for production. Under the current circumstances, processors who previously signed low-price contracts will find it difficult to fulfill their contracts if they do not have raw cashew nuts.
Vinacas has sent a written request to the Ivorian Cashew Exporters Association to remind members to properly fulfill the signed contracts. Mr. Bach Khanh Nhut, Executive Vice President of Vinacas, said that written suggestions will be made to the government and relevant ministries to eliminate the difficulties faced by the cashew industry, including the impact of lifting the ban on raw cashew exports on African countries.
The association also recommended that the Ministry of Agriculture and Rural Development develop the raw material sector and seed quality. This will help cashew processors reduce their dependence on imports.
Tong Yuer
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