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Challenges in Vietnam’s Cashew Industry’s Global Leadership

Cashew processing for export

Challenges in Vietnam’s Cashew Industry’s Global Leadership

Vietnam’s cashew industry faces significant challenges in retaining its top position globally. The processed products derived from cashew nuts remain limited and predominantly in raw form, resulting in relatively low value-added products. Moreover, the industry’s collaboration and development along the value chain are weak and present further challenges.

Cashew processing for export
Cashew processing for export

Challenges of Vietnam’s Cashew Industry

The cashew industry in Vietnam confronts several critical challenges. The lack of product diversification, primarily focused on raw form processing, hampers competitiveness in the market and restricts access to potential markets. Strengthening linkages among stakeholders and investing in research and agricultural technology transfer is essential for overcoming these challenges.

Additionally, the industry faces risks posed by natural disasters and climate change. Cambodia and some African nations are aggressively developing cashew cultivation and processing, posing direct competition to Vietnam.

Despite challenges, Binh Phuoc province remains crucial in Vietnam’s cashew industry, contributing over 50% of the country’s total area and output. Modernized cultivation and processing techniques have contributed to high cashew yields in Binh Phuoc, significantly boosting the province’s export revenue.

The cashew products from Binh Phuoc are exported to more than 100 countries and territories worldwide. Capturing approximately 70% of the global cashew export market share and providing steady employment for around 80,000 workers.

However, the cashew industry in Binh Phuoc also faces difficulties. Instability in sourcing raw materials, with a significant portion imported from countries like Indonesia, Cambodia, and Africa, poses a challenge. The collaboration between businesses and farmers is limited, and small-scale processing facilities face financial constraints.

Furthermore, the sector faces intense competition from other countries, such as China and EU nations, as cashew exports to African countries soar. Currently, Vietnam only captures 30% of the global cashew value chain, with the rest going to international distributors and roasters.

Binh Phuoc’s cashew industry must invest in raw material development, strengthen business-farmer ties, and improve cashew product quality and value. Such improvements will maintain Vietnam’s export position and boost its competitiveness in the global market.

Enhancing the value chain

In Binh Phuoc, known as the “cashew capital,” Dung Quy Dong, a cashew king with over 40 years of experience in cashew cultivation, emphasizes that high-value cashews can only be created through applying organic farming standards, meeting the high demands of consumers in markets like the US and Europe.

In 2017, Dung Quy Dong made the strategic decision to transition to organic farming. With a stringent process supervised by European agencies, covering everything from land preparation, seed selection, and care to nut quality, he obtained organic farming certifications according to US and EU standards within two years.

Dung Quy Dong’s family currently cultivates a total area of 420 hectares, including 200 hectares certified as organic under European and US standards.

He also encourages the establishment of organic production models to ensure export standards and adopt advanced cashew seedling cultivation. Developing sustainable cooperative models in concentrated areas with high-quality yields is crucial to enhance cashew products, backed by Tran Cong Khanh.

Changing the mindset in production

After over 40 years of development, Vietnam’s cashew industry has made significant strides. From the early stage of learning and importing processing equipment from foreign countries, Vietnam has become a leading cashew exporter, accounting for over 75% of the world’s cashew exports.

Despite this achievement, an interesting paradox has emerged. In recent years, the amount of cashew imported into Vietnam for processing and then re-exported has increased rapidly. This phenomenon is the result of allowing cashew nut imports for processing without implementing protective measures for the domestic processing industry.

Binh Phuoc Cashew Orchard
Binh Phuoc Cashew Orchard

Additionally, geographical indication protection is considered a potential solution. The “Binh Phuoc Cashew” geographical indication certificate offers long-term protection, opens vast opportunities, and gains global recognition for Vietnam’s cashew industry.

However, successful geographical indication protection is just one part of the solution. It requires concerted efforts from all individuals, organizations, and businesses within the supply and cashew value chain. Moreover, practical support from the government is crucial. Unanimity in implementation is crucial, from seed selection to product innovation, to ensure success in cashew cultivation, processing, and market development.

Collective efforts and tangible actions will position Vietnam’s cashew industry, especially Binh Phuoc’s, to thrive globally and meet diverse consumer needs.

Source: TTXVN/ Vietnam+

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