As reported by the Vietnam Cashew Association (Vinacas), in 2016 Vietnam cashew exports reached over US$3 billion, including US$2.85 billion in cashew nut exports and the remaining from other cashew products.
Last year was also the eleventh consecutive year that Vietnam's cashew nut industry maintained its leading position in cashew nut exports worldwide, continuing to maintain a market share of over 50% (around US$5.5 billion).
As Vietnam's second largest trading partner, the European Union (EU) in 2016 imported over 94,000 tonnes of Vietnam's cashew nuts, valued at nearly US$766 million, accounting for nearly 27% of Vietnam's export market share.
By the end of the first quarter 2017, Vietnam exported 55,739 tonnes of cashew nuts, of which, the EU market accounted for 29,252 tonnes (over 52%). According to experts, the EU is a big strategic and indispensable market for Vietnam cashew nut production and export, especially in the context of the Vietnam-EU Free Trade Agreement will soon become effective.
Although cashew exports to the EU market have increased steadily, Pham Minh Tri, an expert from the EU-Mutrap project, said that the challenge for exporters lies among food safety standards. EU’s requirement for food safety is quite high. Exporting companies also face the risk of not meeting the EU origin standards as Vietnam imports raw materials from Africa (Ivory Coast, Nigeria and Ghana). Furthermore, in recent times some pest and impurities have been found in some shipments to the EU, affecting the prestige of Vietnamese enterprises.
Cao Thuc Uy, Director of Cao Phat Co., Ltd, said that the EU is a fastidious market, requiring enterprises to have standard certificates such as the BRC, FSSC 22000, and ISO 22000 but which result in slow payment. However, according to Uy, the EU market has more potential for Vietnamese cashew nuts as many Europeans eat cashew nuts to reduce obesity.
According to Vinacas, Europe's cashew output and market share has increased over the years, from more than 64,000 tonnes (22.52%) in 2014 to more than 94,000 tonnes (27%) in 2016. In the region, the Netherlands and Germany are the main trading centres of cashew and considered as gateways to the EU.
Ta Quang Huyen, General Director of Hoang Son I Co., Ltd in Binh Phuoc Province, a major exporter in the industry, said that exporters must be able to ensure food safety and hygiene in order to be eligible to export their products into the fastidious market of the EU. Accordingly, enterprises need to meet the ISO 22000, FSSC 22000 or BRC standards. In addition, enterprises need to maintain prestige by timely delivering under their contracts, as well as meeting orders’ requirement from their partners.
Along with that, Dang Hoang Giang, Secretary General of Vinacas, said that to increase the export of cashew nuts to the EU, businesses need to thoroughly understand information and their partners through abroad political, social and professional organisations such as Vietnamese overseas trade offices, while understand local culture and behaviours in negotiating with EU businesses.
In addition to that, it is necessary to promote image recognition and product promotion by approaching trade promotion opportunities such as trade fairs and exhibitions. Enterprises must create trust and reputation in trading and actively solve arising problems.
In July, Vinacas will carry out trade promotion activities on the European market in the Netherlands, Germany and Belgium.
According to Nguyen Duc Thanh, Chairman of Vinacas, the current trend of consumers in the world is to use organic products and organic cashew prices are 60% higher than the standard. Domestic enterprises should aim to produce clean organic products. To do so, they must have raw material areas by actively cooperating with farmers to build raw material areas.
