A cashew processing factory (Photo: VNA) HCMCity (VNA) – Although global cashew demand is predicted to continuerising, the Vietnam Cashew Association (Vinacas) and cashew processors andexporters are worrying about a high price trap which may affect theiractivities in 2018.
Vinacas Chairman Nguyen Duc Thanh said theassociation is concerned about unpredictable prices as cashew nut export pricesmay fall sharply after they already hit record last year. Meanwhile, raw cashewprices are still high at present.
Cashew nut export prices averaged 10,000 USD pertonne in 2017, rising by over 20 percent from the previous year. They havedeclined by 10 percent after reaching their peak last June.
Some businesses said with current export prices,raw material prices should be lower than 1,900 – 1,950 USD per tonne so thatproduction and business activities are profitable.
However, raw cashew prices in the global marketare currently about 2,100 – 2,150 USD per tonne. Producers will suffer lossesif they buy materials in bulk at present.
Thanh said businesses should be alert for a highprice trap since they might purchase raw materials at very high prices but sellcashew nuts at lower prices. A similar situation happed in 2000. Therefore,companies should balance raw material and processed nut prices to ensureprofit.
Many insiders also forecast 2018 would be a badyear for cashew processing and export.
Ta Quang Huyen, Chairman of the Hoang Son 1 Co.Ltd, said that on January 1, many foreign supermarkets increased the prices ofcashew nut products by 15 percent from 2017.
He said if selling prices are too high,consumers will gradually switch to other types of dried nuts. The price hikecould slow cashew nut consumption, especially in the last six months of thisyear.
Facing unpredictable prices, Vinacas and cashewbusinesses decided to reduce cashew nut output and export revenue in 2018 so asto improve quality and expand the domestic market.
They will reduce the processing output from350,000 tonnes in 2017 to 300,000 tonnes in 2018 and the cashew nut exportturnover from 3.5 billion USD to 3 billion USD this year.
According to the Ministry of Agriculture andRural Development, Vietnam earned 3.52 billion USD from shipping 353,000 tonnesof cashew nuts abroad in 2017, up 23.8 percent in value and 1.9 percent involume from the previous year. The country made up over 50 percent of totalglobal cashew nut export value in 2017 and remained the world’s top processorand exporter of this product.-VNA
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