Cashew exports drop on costlier raw nuts
(VOV) - The majority of small cashew processors in Binh Phuoc Province have shut down on the back of raw material shortages resulting in escalating costs and falling profits, according to the Vietnam Cashew Association (VINACAS).
“Small plants in Binh Phuoc, the largest cashew processing province in Vietnam, have been forced to close to due to limited supplies and a price hike on raw cashews from Africa,” said VINACAS Chairman Nguyen Duc Thanh.
Currently according to figures from the Ministry of Agriculture and Rural Development (MARD), processors in Binh Phuoc and other provinces import over half of their raw cashew needs from the African continent.
Thanh said exports for September plummeted to just 30,000 metric tons with revenues tallying in at US$218 million and they are forecast to remain low throughout the balance of the year.
Year-to-date for the nine months January-September overall exports still looked good on paper with the industry having experienced a 20.6% hike in volume to 245,000 metric tons and a 7.8% jump in value to US$1.78 billion.
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“Dong Nai, a second leading cashew processing province is facing a similar situation with material shortages and high costs causing small business closings,” Thanh underscored.
Small processors have not been able to pass the higher costs on to their customers and they just don’t have the financial strength to weather the storm and keep their doors open, he said.
The prices of raw cashew imported from Africa vaulted to US$1,650-US$1,700 a metric ton a few months ago before cooling to the current level at about US$300-US$400 lower.
Thanh said the raw cashew prices from Africa have increased 25% compared to a year ago while the sales prices of exported cashew kernels have gone up only by about 10%, which has pinched profits.
In addition, over the past 18 months the US dollar has increased in value by 30% against the Vietnamese dong, digging in to profits by increasing costs and putting downward pressure on sales, he said.
Leading export markets for the period included the US, Netherlands and China, which accounted for 71.17% of the overall export revenue. Markets experiencing strong growth included Germany, Thailand, the US and the Netherlands.
The target for the year of 320,000 metric tons with revenue of US$2.5 billion is still within reach but the outlook through the rest of the year remains bleak, Thanh concluded.