On August 25, 2011, the Circular No. 102/2011/TT-BTC on new cashew nut import and export tariffs issued by the Ministry of Finance will take effect. Accordingly, the tariffs will be lowered from 5 - 7.5 percent to 3 percent. However, under the current context, the cashew industry needs a long-term consistent solution to get through difficulties to develop.
Production dilemma
According to the Vietnam Cashew Association (Vinacas), the Vietnamese cashew industry faced numerous difficulties in the first six months of 2011 due to raw material shortages and high production costs. Exported cashew nut volume fell 16.5 percent to only 67,000 tonnes worth US$500 million in the first half owing to insufficient workforce and stiff competition from alternatives like almonds, chestnuts and walnuts.
Vietnam is expected to export 163 000 tonnes of cashew nut valued at US$1.32 billion in 2011, up 16 percent in value from 2010. Export price in 2011 is forecast to average at US$8,098 per tonne, representing a year on year rise of 22.6 percent.
Climate change, inflation in China and other countries, public debt crisis in Europe and the US, and Vietnam’s new policies like Circular No. 13/2011 / TT-BNNPTNT on food safety inspection effective on July 1 are causing a plenty of difficulties against the cashew industry. Therefore, solutions to withstand uncertainties of cashew industry remain a daunting challenge for Vietnam.
In search of solution
To earn US$1.4 billion from cashew nut export in 2011, the Vinacas has launched a lot of measures to promote production, processing and improve product quality of cashew nuts.
First of all, Vinacas proposed excluding raw cashew nuts from the list of compulsory quality-checked food crops imported into Vietnam and repealing regulations on Vietnamese subtitled name labelling. The association also suggested the Government and the Ministry of Agriculture and Rural Development to have policies to support local companies to stockpile raw cashew nut from 2012 and proposed the ministry to map out cashew industry development plans for southern provinces, particularly in Southeast, Central Highlands and Southern Central Coast.
As regards capital, the association asked for funding support for purchase of cashew nuts in the country. In particular, local companies need funds to procure 30,000 tonnes of raw cashew nut in the country and import 329,300 tonnes of raw cashew nut from other nations. The association also asked for soft loans for cashew nut producers, traders and exporters.
To overcome workforce difficulties, Vinacas proposed the Government to issue preferential and supporting policies for cashew nut businesses and workers to improve working environment and increase incomes.
As cashew nut production is largely dependent on weather conditions, production planning and innovative production are necessary to minimise seasonal risks.
To have enough raw materials for processing, companies need actively import raw materials from foreign nations and conduct market surveys to make sound decisions. The association will also coordinate with the G20-VCS Club in activities related to processing, importing and exporting cashew nuts in the last six months of the year.
Cashew nut is one of a few high cash-earning farm produce in Vietnam. But the cashew industry in particular and the Vietnamese agriculture in general are facing numerous challenges and difficulties in capital and material. Thus, they need long-term solutions to stand firmly and move forward in the current volatile context.
Thu Ha
Vietnamese
