A panel discussion at the 10th International Cashew Conference held by the Vietnam Cashew Association in Ha Long (Source: VNA) Quang Ninh (VNS/VNA) - Price stability is needed toensure sustained growth of the cashew nut market and benefits for stakeholdersin the cashew value chain, participants said at the 10th International Conference on Cashew in northeastern QuangNinh province at the weekend.
After a period of steady increase, global cashew nut prices havefallen sharply, causing difficulties for stakeholders in the sector,participants said.
Vu Thai Son, an executive member of the Vietnam Cashew Association(Vinacas), the organiser of the event, said: “Last year cashew kernel pricessoared to record levels, with WW320grade going to 5.2 USD per pound fob. Theprices have since fallen to 4.6-4.7 USD in early 2018, 3.65-3.7 USD in earlySeptember and 3.2-3.3 USD now.” This has worried businesses, he said.
According to participants, the high prices last year causedconsumers to switch to other nuts.
Wim Schipper, director for tree nuts and ingredients at IntersnackProcurement B.V, a subsidiary of Intersnack Group of Germany, said due tosubsequent higher kernel prices, roasters had to increase their prices twicefor sales in 2017 and 2018, resulting in “demand destruction” and areduction in retail sales of the nut.
Cashew nut imports into the EU saw steady growth from 2015 to 2017and even in the first five months of this year, but reduced significantly fromJune, he said.
There is a strong connection between the steadiness of retailprices and retail sales of the nut, he said. Retail sales in the EU areexpected to fall by 10 percent this year.
A representative of Red River Foods said cashew sales this yearare expected to go down by 14 percent. “Demand should recover but it may take9-15 months.”
Many participants asked speakers if prices have bottomed, but weretold no one could be sure.
Wim said retailers usually sign long-term contracts for at leastsix months, usually a year. Due to this, there would be no extrademand for cashew kernels from retailers if prices decrease, he said.
But Son said there are some bright signs. “The number of orders atthe current prices seems to have increased a lot, customers have startedordering at current prices for until June 2019. This proves that they think theprice is reasonable for them, reasonable for consumers.”
In addition, some supermarkets in the US and EU have begun to cutshelf prices, which is very important signal because the prices are as cheap asthe prices during a period when the consumption was very good, he said.
Consumption would possibly be good in the coming time, withconsumers coming back to the nut, he said.
Wim said: “Sustainability and social compliance become moreimportant. And price stability is needed to reduce exposure of all stakeholdersand to grow the volume and to mature the business.”
With many importing countries paying greater concern to foodsafety, cashew processing and exporting firms must understand and comply withfood safety regulations in their target markets, and have all documentsrequired for possible inspections in importing countries, delegates said.
Vietnamese Deputy Minister of Agriculture and Rural Development LeQuoc Doanh said the cashew industry has grown strongly in terms of bothproduction and export, greatly contributing to the country’s economic growthand creating jobs.
Cashew nuts are one of Vietnam’s key export items, with the valuereaching 3.62 billion USD last year, he said.
He urged the sector to focus more on improving value-addition,doing market research to boost exports and training human resources to ensuresustainable development.
Vinacas President Pham Van Cong said Vietnam accounts formore than 60 percent of global cashew nut exports and has remained the topprocessor and exporter for the last 12 years.
Held since 2008, the annual conference is Vietnam’s most importantindustry event, and seeks to promote its brands and exports and build andconsolidate the relationship between Vietnamese and international cashewbusinesses, he said.
At the conference this year Vinacas, cashew processing and importcompanies and international cashew nut buyers, importers, distributors,processors, and marketers analysed, evaluated and oriented the development ofthe global cashew industry.-VNS/VNA
VNA
