Vietnamese importers have temporarily stopped buying raw cashew from Africa due to a surge in prices, according to the Viet Nam Cashew Association (Vinacas).

Speaking at a conference to review the cashew sector’s performance last year and discuss the year ahead in HCM City on Tuesday, Dang Hoang Giang, Vinacas deputy chairman, said cashew prices in Africa went up by 30 – 40 per cent to a record US$1,956 per tonne on average last year, while processed cashew prices rose by only 10-15 per cent in the global market.

In the first two months of this year raw cashew prices have increased to $2,000 per tonne, even to $2,100 in Ivory Coast, he said.

If Vietnamese cashew processors buy the nut at these prices they would suffer losses, Nguyen Duc Thanh, the association chairman, said.

He said last year due to a reduction in domestic cashew output, the industry imported over 1.3 million tonnes for processing for export, the highest ever.

Viet Nam imported nuts from 32 countries and territories, mainly from the Ivory Coast, Nigeria, Tanzania, Ghana, and Cambodia, he said.

Domestic cashew output this year is forecast to be higher than last year at 400,000 tonnes compared to 250,000 tonnes last year.

Ta Quang Huyen, chairman of Hoang Son 1 Company, said with higher local output, importers might only need to buy 950,000 to one million tonnes of raw cashew this year.

Besides, supply from Cambodia would also increase significantly this year, helping reduce reliance on African sources, he said.

Amid the volatile raw material situation, the association and its members have agreed to shift from quantity to quality by raising the value of cashew nuts with deep processing and developing the domestic market.

Cashew export revenues are expected to be around $3 billion this year, a year-on-year fall of $500 million, Thanh said.

Firms would face losses if they buy raw cashew at such high prices to fulfil the target export of $4 billion this year, he added.

Currently the association is working with the Cambodian Ministry of Agriculture, Forestry and Fisheries to develop cashew-growing areas and increase output to one million tonnes in the next 10 years.

Vinacas would provide cashew seedlings and technical support, and buy the entire output, he said.

At the conference, the Cambodian Ministry of Agriculture, Forestry and Fisheries, called for Vietnamese businesses to invest in the cashew sector in his country.

In Viet Nam, domestic cashew output meets only 20 -35 per cent of demand.

The country has been the world’s largest cashew producer and exporter for many years, accounting for 60 per cent of the global market share. — VNS