The Vietnamese cashew industry, a major contributor to the nation’s export economy, faces a growing trade deficit due to rising raw material prices. Despite increased export volume and turnover, the narrowing gap between export and import values raises concerns about the sector’s sustainability.
According to the General Department of Customs, cashew exports grew by 22.9% in volume and 21.8% in turnover year-on-year, with an average price of $5,706 per tonne. In 2023, the industry’s export turnover reached $3.64 billion, while raw material imports cost $3.1 billion, resulting in a $500 million trade surplus. The first eight months of this year, raw material imports have already reached $2.7 billion, approaching last year’s total.
“This figure accurately reflects the current situation of the cashew industry,” said VÅ© Thái SÆ¡n, chairman of the Bình PhÆ°á»›c Cashew Association and general director of Long SÆ¡n Company.
Vietnam remains the world’s leading cashew processor, yet domestic raw cashew production meets only 10-12% of processing needs. Most raw materials are imported from Africa and Cambodia, and recent supply shortages, worsened by drought, have driven up costs.
El Nino has significantly reduced cashew output in Africa, leading to tightened exports and a price increase of 40-50%. Raw material costs have risen to $1,500-$1,700 per tonne, straining Vietnamese processors.
SÆ¡n added that, the growth rate of the export price of cashew nuts is not significant, so many enterprises have suffered losses.
The Vietnam Cashew Association (VINACAS) noted that the country’s cashew-growing area has decreased from 440,000 hectares in 2007 to 305,000 hectares in 2024. This reduction, combined with competition from imports, has led many domestic growers to switch to higher-value crops.
VINACAS vice chairman Bạch Khánh Nhựt said Vietnam imports over 2.5 million tonnes of raw cashews annually, with 1.7 million tonnes sourced from Africa. Weather conditions have caused supply shortages, increasing costs.
Small and medium-sized enterprises (SMEs) in Vietnam’s cashew industry are struggling to compete with larger foreign direct investment (FDI) factories. If this continues, SMEs risk bankruptcy, which could allow larger firms to dominate the market.
Son further added that small enterprises selling locally or exporting to China without advance contracts are among the few still managing to profit.
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