CASHEW nut processing plants have halted operations due to a lack of raw materials, the Vietnam Cashew Nut Association (Vinacas) has announced, while urging shell-shocked processors to stay calm in the face of price fluctuations on the world cashew market.
In the Mekong Delta province of Long An, only 12 out of the 33 cashew processing factories are still operating, while in Binh Phuoc Province, 80 per cent of small- and medium-sized enterprises have halted operations.
Ta Quang Huyen, vice chairman of the Vietnam Cashew Association, said in the first five months of the year, companies imported 653,000 tonnes of cashew nuts, a drop from the same period last year.
In May, the price of processed cashew nuts fell, prompting processing plants to increase their output and sell out.
If the situation continues, exporters from Africa could take advantage of the shortage to hike prices, Huyen said.
In response, cashew processing factories have agreed to temporarily cease operations to stabilise prices.
Vinacas vice president and secretary general Dang Hoang Giang said the reduction of the supply of cashew products to the world market is one solution to help cashew prices rise again.
Consumers will buy cashews even at high prices, Giang explained, because the nuts are a nutritious, healthy food.
Vinacas chairman Nguyen Duc Thanh said in the second half of the year, Vietnam’s cashew industry will need about 900,000 tonnes of raw materials for processing, but if costs rise, the association would import less.
Instead of paying attention to cashew kernels exports, the cashew industry will increase its proportion of value-added products such as salted or honey roasted nuts and wasabi- and chocolate-coated nuts to 30 per cent from their current 10 per cent of the industry’s total exports, said Thanh.
He said that the sector will strive to raise total exports to more than US$3.7 billion (Bt122 billion) in 2018, 5 per cent higher than last year’s figure.
Five-month cashew nut exports increased in both volume and value, reaching 141,000 tonnes worth $1.39 billion, up 21.4 per cent and 25.3 per cent, respectively.
Major importers include the US, accounting for 29 per cent of total cashew export value, the Netherlands with 17 per cent and China with 15 per cent.
This year, Vietnam plans to maintain a market share of about 65 per cent of global cashew nut exports worth $5.7 billion.