Cashew prices drop sharply

Fresh cashew prices fell to VND28,000-VND30,000 per kilogram from VND40,000-VND42,000 last year, while dried raw cashew plummeted to VND36,000 per kilogram from last year’s level of VND50,000.

Industry insiders said that the cashew price will continue its downward spiral, showing no signs of recovery.

Tran Huu Hau, a representative of the Vietnam Cashew Association, said that the prices are still higher than those seen after the record price drop in end-February, when fresh cashew sold for a mere VND20,000-VND24,000 per kilogram as cashew processing factories had remained closed for the Tet holiday.

Nguyen Van Tuan, the owner of cashew farms in Xuyen Moc District, Ba Ria-Vung Tau Province, explained that the price of cashew grown in his locality is higher than in other regions due to the higher quality of the product and the farms’ favorable locations for transporting the product. However, he pointed out, the cashew price this season has fluctuated constantly.

At the beginning of last week, cashew was priced at VND32,000-VND33,000 per kilogram. The cashew price currently stands at VND29,500 per kilogram, down VND2,500 or VND3,500 per kilogram.

Vietnam’s cashew-processing industry depends heavily on cashew imports, resulting in sharp drops in domestic raw cashew prices.

Ho Ngoc Cam, director of Phuong Minh APIMEX Co., said that even though firms have only imported a small volume of cashew into Vietnam, local cashew prices have fallen sharply. He added that the large cashew imports expected in the coming period will certainly take a heavy toll on the domestic cashew price.

The price of raw cashew in the global market is in decline, Cam said, adding that raw cashew in Africa sells for US$1,300-US$1,400 per ton, down by US$600-US$700 per ton against the year-ago period. Further, the world price of cashew nuts has fallen to US$7,500 per ton from US$9,000.

Cam noted that the cashew industry incurred losses last year, causing many firms to suspend their operations or shut down for long periods.

Local cashew processors had previously bought thousands or even tens of thousands of tons of raw cashew, but since the start of the year, they have purchased only a few hundred tons, enough to supply production.

These firms tend to wait for a price drop on the global market, Cam said, adding that most of them depend on capital from banks to purchase their cashew supplies, but the banks have recently limited their loans due to the high risks faced by the industry.

At a conference to review the cashew industry at the beginning of the year, the Vietnam Cashew Association pointed to bottlenecks faced by the industry last year and called on firms processing cashew for export to purchase raw cashew at US$1,200 per ton.

Following heavy losses last year, many local cashew processors reached a consensus to only buy enough cashew for production rather than rushing to import large volumes of cashew.

Nguyen Minh Hoa, vice chairman of the Vietnam Cashew Association, proposed cashew firms not buy raw cashew in droves as they did in previous years to avoid heavy losses.