VN cashew market hard to forecast due to coronavirus outbreak

The cashew industry has just overcome a long crisis cycle from 2017 to early 2019 with serious impacts but the developments of the Covid-19 outbreak have caused the industry to enter a period containing many risks.

This year, cashew export enterprises are expected to face special difficulties. 

VN cashew market hard to forecast due to coronavirus outbreak

Cashew nut processing in Binh Phuoc Province. (Photo: SGGP)

Lately, the Standing Committee of the Vietnam Cashew Association (Vinacas) warned that enterprises must be cautious with transactions during this time and should consider carefully before deciding to buy raw cashew from African countries, even with the neighboring country Cambodia.

Accordingly, enterprises need to analyze information from various sources, thereby evaluating the market situation and other impacts, especially the impacts of the spread of the Covid-19 and actual capacity of enterprises before deciding to sign contracts to purchase raw cashew or sell cashew nuts, including whether to stockpile raw materials or finished products or not, to ensure business effectiveness of enterprises.

If enterprises have not balanced the cost and the selling price, or have not had any consumption contracts, they should not rush to buy raw cashew.

Of the cashew nut market share of Vietnamese enterprises, the US accounted for nearly 30 percent, the EU and other countries held 56 percent, and China got more than 14 percent.

Although accounting for a small proportion, China has been playing an important role in affecting the prices of other markets for a long time.

The steadiness in the price of cashew nuts in the Chinese market is a counterbalance that contributes to keeping the prices at the remaining markets.

With the current developments, when it is unable to determine exactly how long the Covid-19 outbreak will last, Vinacas said that the export of cashew nuts to China will more or less encounter disadvantages.

This year, whether China will consume more or fewer cashew nuts is always a question and a matter that needs to be paid attention constantly. Once the consumption of cashew nuts in China’s market weakens, it is the opportunity for importers to cause pressure to lower the price of cashew nuts.

Amid the chaotic situation, there is a high possibility that Western importers will reduce the number of orders to gain a lower price.

Therefore, the negotiations to import raw cashew from West Africa will also be tough. It is tougher for signed contracts, once enterprises want to negotiate again.

Moreover, in comparison with cashew nuts, Chinese people consume much more almonds. Due to the complicated developments of the Covid-19, the amount of almonds imported into China has dropped drastically, causing the price of almonds in the global market to decline.

As a result, like previous times, a part of consumers in the global market has shifted to consume almonds, making cashew nut consumption affected.           

 

Even after the outbreak, the life of Chinese people will be difficult for a while to return to the routine, so the number of imported goods will be lower than previous years because cashew nut is not the main food in the diet.

It is the reason why the Vinacas forecast that the volume of cashew nuts exported to China might be declined this year.

Currently, the price of cashew nuts has been adjusting negatively, hurting the business performance of enterprises.

On the contrary, while cashew nuts saw a sharp decrease, the price of raw cashew in Africa just slightly dropped. This is a difficult problem for enterprises when balancing the output and input costs.

With these analyses, the Vinacas forecast that the growth rate of the cashew nut will be affected. If the growth rate of the cashew industry was positive last year, it will possibly be negative this year.

From another perspective, according to the analysis of a cashew expert, the ‘mental disorder’ is dominating the cashew market, as the Covid-19 outbreak has been triggering unexpected changes.

China is an important market but the market share merely accounts for 10 percent of the global cashew nut consumption.

Besides, every year, the number of imported goods into China, of which, more than 90 percent is imported from Vietnam, also decreases significantly in February and March, after the peak consumption on the occasion of the lunar New Year.

Perhaps, it is still too early to give in in a panic. If the pandemic lasts for a few more months, its impacts will be devastating.

But if the pandemic is controlled at the end of March, its impacts on the consumption of cashew nuts in China and the world will not be significant.

Amid the context of strong growth in the global demand and the limitation of the inventory of cashew in the last crop, it seems that the panic that started earlier has been exaggerated and might lead to a sudden increase in the next cashew crop. SGGP

Thuy Doan

Vietnam needs more input materials to export more cashew nuts

Vietnam needs more input materials to export more cashew nuts

Vietnam is among the world’s top cashew nut exporters, but it still cannot control the material supply sources.

More efforts needed to maintain VN’s leading position in cashew export

More efforts needed to maintain VN’s leading position in cashew export

Viet Nam stood out as the world’s largest cashew exporter last year but there remains many challenges ahead for the country to retain its leading position in the future.  

 
 

Other News

.
Nissan Vietnam ceases operation in response to COVID-19
Nissan Vietnam ceases operation in response to COVID-19
BUSINESSicon  03/04/2020 

Automaker Nissan Vietnam has declared a temporary shutdown as from April 5 amid the complex developments of the COVID-19 pandemic.

Room for Vietnamese farm produce exports to Singapore amid COVID-19
Room for Vietnamese farm produce exports to Singapore amid COVID-19
BUSINESSicon  03/04/2020 

Vietnamese enterprises shipped around 500 tonnes of goods, including coffee, instant noodles, sweet potato, cabbage, pineapple, watermelon, and dragon fruit, to Singapore in March, according to the Vietnamese Trade Office in Singapore.

VN wood industry facing losses due to COVID-19
VN wood industry facing losses due to COVID-19
BUSINESSicon  03/04/2020 

 The wood industry was facing a ‘disaster’ with many businesses left without orders from now until 2021 due to the COVID-19 pandemic, said the Vietnam Timber and Forest Product Association (VTFPA).

Vietnam’s manufacturing drops to record low in March due to pandemic
Vietnam’s manufacturing drops to record low in March due to pandemic
BUSINESSicon  03/04/2020 

The Vietnam Manufacturing Purchasing Managers' Index (PMI) fell sharply to 41.9 in March from 49.0 in February, a survey by IHS Markit and Nikkei released on April 1 showed.

Cambodian government offers financial support for tourism sector
Cambodian government offers financial support for tourism sector
BUSINESSicon  03/04/2020 

The Cambodian government recently announced a measure to assist workers employed in the tourism sector which is severely affected by the COVID-19 pandemic.

Many firms optimistic about business in Q2
Many firms optimistic about business in Q2
BUSINESSicon  03/04/2020 

Many enterprises in the manufacturing and processing industry are optimistic about the outlook for the second quarter of 2020, according to a survey conducted by the General Statistics Office (GSO).

Floundering service sector threatens mass unemployment
Floundering service sector threatens mass unemployment
BUSINESSicon  03/04/2020 

With restaurant and café chains struggling amid COVID-19, thousands of employees in the service sector could lose their jobs. 

Will coronavirus reverse globalisation?
Will coronavirus reverse globalisation?
BUSINESSicon  02/04/2020 

Could Covid-19 permanently change how the global economy works?

Coronavirus: Oil prices rise on hopes of a price war truce
Coronavirus: Oil prices rise on hopes of a price war truce
BUSINESSicon  02/04/2020 

US President Donald Trump said he expects Saudi Arabia and Russia to strike a deal in the next few days.

Government considers $2.6 billion support package for Vietnamese hit by COVID-19
Government considers $2.6 billion support package for Vietnamese hit by COVID-19
BUSINESSicon  02/04/2020 

Minister of Planning and Investment Nguyen Chi Dung submitted a relief package worth US$2.6 billion to help those most affected by the COVID-19 pandemic at the meeting of permanent Government members on April 1.

GDP growth of 3.82 percent in Q1 is a miracle: official
GDP growth of 3.82 percent in Q1 is a miracle: official
BUSINESSicon  02/04/2020 

Vietnam’s GDP growth rate of 3.82 percent in the first quarter of 2020, a record low since 2011, is still a miracle amidst a global economic recession, an official has said.

Honda Vietnam suspends production due to COVID-19
Honda Vietnam suspends production due to COVID-19
BUSINESSicon  02/04/2020 

Honda Vietnam (HVN) has become the fourth automaker in Vietnam to suspend production and assembly of cars and motorbikes over the concerns of the COVID-19 pandemic.

Ba Ria–Vung Tau seeks investors for 23 key projects
Ba Ria–Vung Tau seeks investors for 23 key projects
BUSINESSicon  02/04/2020 

Authorities in the southern province of Ba Ria-Vung Tau have been asked to speed up procedures so that investors can be sought for important projects.

VN central bank asks for cut in electronic fund transfer fees
VN central bank asks for cut in electronic fund transfer fees
BUSINESSicon  02/04/2020 

The State Bank of Vietnam (SBV) on March 31 issued a directive to reduce the fees for transactions via interbank electronic payment system by 50 percent for local banks.

Banks maintain normal operations during national social distancing
Banks maintain normal operations during national social distancing
BUSINESSicon  02/04/2020 

Banking services will remain available to meet the transaction demands of businesses and individuals, according to the State Bank of Vietnam (SBV).

Bank customers warned of fraud amid COVID-19 pandemic
Bank customers warned of fraud amid COVID-19 pandemic
BUSINESSicon  02/04/2020 

Banks have warned customers about fraud during the COVID-19 pandemic, advising them not to open suspicious emails or click on dubious links sent as email attachments related to the pandemic.

Finance Ministry asks insurers not to sell COVID-19-related products
Finance Ministry asks insurers not to sell COVID-19-related products
BUSINESSicon  02/04/2020 

The Ministry of Finance has asked insurers to stop introducing and selling insurance packages related to COVID-19.

Securities trading uninterrupted during COVID-19 fight: SSC
Securities trading uninterrupted during COVID-19 fight: SSC
BUSINESSicon  02/04/2020 

Trading on the Vietnamese securities market was essential and would not be disrupted under any circumstances during the fight against COVID-19, the State Securities Commission (SSC) said on March 31.

Restaurants, coffee chains in Vietnam switch to selling online delivery
Restaurants, coffee chains in Vietnam switch to selling online delivery
BUSINESSicon  02/04/2020 

After HCM City decided to temporarily close restaurants and catering services with the capacity of more than 30 customers, they began selling online and delivering food.

Vietnamese businesses, landlords lean on each other to survive epidemic
Vietnamese businesses, landlords lean on each other to survive epidemic
BUSINESSicon  02/04/2020 

Many shopping malls and landlords have accepted to lower retail premises rent or exempt rent to help tenants overcome difficulties at this time.

 
 
 
Leave your comment on an article

OR QUICK LOGIN