In a letter sent to the Vietnam Chamber of Commerce and Industry and the Ministry of Industry and Trade, VINACAS reported that Vietnam purchased 78,580 tonnes of cashew from abroad last year, which was larger than the country's output.

"Vietnam has led the world in cashew export for many years with annual revenues reaching between USD 3.5-3.8 billion," VINACAS said. "However, the position is being threatened due to soaring imports while the country doesn't have proper policies to protect local firms, leading to unhealthy competition."

The association reported that the country continued to import nearly 10,160 tonnes of the nut in the first two months of this year."

According to VINACAS, while some African countries provide export tax exemptions for processed cashew and impose high export taxes on raw cashew, Vietnam is giving tax exemptions to both processed and raw cashew imported into the country.

"Many FDI companies have taken advantage of those policies to build processing plants in African countries and then export the processed nuts to Vietnam for some simple processing then re-export,” VINACAS explained. "Meanwhile, domestic processing firms have been badly affected by the high tax imposed on African raw nuts."

The association proposed to the Ministry of Industry and Trade to discuss with African countries on exempting taxes on raw cashew exported to Vietnam to create “more healthy competition.”

Vinacas said that if the African countries don't agree with this proposal, the Vietnamese government should consider imposing a 25 percent tax on imported processed cashew similar to what India is doing.

Source: Dtinews