Vinacas has asked the Vietnam Confederation of Commerce and Industry (VCCI) and the Export-Import Department of the Ministry of Industry and Trade (MOIT) to help them overcome serious difficulties.

Vietnam has led the world’s cashew nut supply chain over many years, but the position is under threat. Vietnam will be dethroned if it doesn’t change its strategy and prevent risk soon. 

The current situation is the result of a policy allowing the import of cashew nuts without any measures to protect the local cashew processing industry.

According to Vinacas, over 10,158 tons of cashew nuts, or 44,000 tons of raw nuts, were imported to Vietnam in January and February 2023.

Prior to that, 78,583 tons of cashew nuts, or 350,000 tons of raw nuts, were imported in 2022. The figure was even higher than the total raw cashew output Vietnam produced within one year.

African countries, which are the biggest cashew exporters to Vietnam, and Cambodia as well, now are reserving raw cashew nuts for domestic processing and gradually reducing raw cashew exports. The countries have as a result applied preferential policies to attract investors to build cashew nut processing factories there. They also have put cashew exports under strict control and set high export prices.

Meanwhile, both raw cashews and cashew nuts imported to Vietnam for processing for export enjoy tax exemption.

Most cashew nut imports have low quality and the exports processed from imports may affect the reputation of Vietnam’s cashew products and the Vietnamese national brand.

Under current policy, Vietnam’s large processing enterprises have had to shift to import products, scale down production and only focus on some final links of the production chain, wasting a large part of the modern production line that they have built.

Vinacas has proposed that Vietnam needs to negotiate with and sign bilateral agreements with other countries on exempting import/export taxes on each other’s products. If they agree to exempt tax on raw cashew exports to Vietnam, Vietnam won’t have to change current regulations.

In case they disagree with Vietnam, the government should apply the principle of reciprocity in international relations and doesn’t exempt import tax on cashew nuts. Instead, Vietnam should tax 25 percent on unhusked cashew nut imports. At the same time, it should apply the floor prices on cashew nut imports to Vietnam like India is doing with the imports to the country.

Tam An