Minister of Agriculture and Rural Development Nguyen Xuan Cuong has called for greater efforts to address the shortage of raw materials faced by the domestic cashew processing industry, saying that remains the biggest challenge for the sector’s development.   

Unless that obstacle is removed, Viet Nam’s cashew industry will not be able to compete with foreign growers and producers, Cuong said at a conference last week on sustainable development of Viet Nam’s cashew sector.

According to the minister, Viet Nam exported the first batch of cashews in 1988. After 28 years, the country is now the biggest cashew processor in the world, making more than 50 per cent of global output.

In 2016, Viet Nam earned US$2.8 billion from exporting 347,000 tonnes of processed cashew and expects to reap $3.2-3.3 billion this year. “However, we have to import more than 60 per cent of cashew seeds,” Cuong noted.

“Over the past 10 years, cashew tree planting areas have been shrunk and productivity has declined from 1.1 tonnes per hectare to 0.75 tonne,” he said, adding that many cashew trees are stunted, while some cashew trees have been replaced with industrial trees such as rubber, coffee and pepper.

“Is the cashew sector no longer attractive to investors or don’t we know how to make it more attractive?” the minister asked.

Rising world demand

Le Van Lien, an expert in cashew market analysis, said global demand for raw cashew is rising six per cent per a year but supply is only increasing by only 3.5 per cent due to harvest loss, drought and climate change. This, in turn, is hiking prices.

“The world supply of cashew material is growing slowly, providing Viet Nam with a chance to move forward if we can develop high-yield, stable output planting areas.”

Nguyen Khac Hai, general director of PAN Group, an agriculture and food company, said Viet Nam should be active in providing raw material sources for itself by replanting.

The southern province of Binh Phuoc, for example, has total cashew tree planting area of 180,000ha but the proportion of old and stunted trees accounts for 30 per cent. “We have to find a replanting method to bring more profit to farmers, thereby encouraging them participate in the activity,” he said.

Hai estimated that after replanting, productivity would rise from 1.4 tonnes to 2.4 tonnes per hectare, and farmers’ income would probably double from VND35 million ($1500) to VND76 million per hectare.

The cost for replanting 1ha of cashew trees and the first year of production is approximately VND30 million, thus the total cost of the whole area in Binh Phuoc is estimated at $246 million, Hai said.

He said the group would support the cashew tree replanting on 10,000ha in Binh Phuoc and ensure all the output is consumed.

Minister Cuong asked the PAN Group and provincial authorities to continue studying new varieties, training human resources and investing more in production value chains to add value to cashew products. 

VNS