The collaboration in the raw cashew (RCN) trade between Vietnam and Cambodia proves mutually advantageous. Vietnam’s dependence on Cambodia’s raw cashew supply ensures a stable supply chain, while Cambodia’s growing cashew industry thrives on the significant demand from Vietnam. This interdependence highlights the effectiveness of regional trade partnerships in the context of a globalized economy.
In 2022, a staggering 98% of Cambodia’s raw cashew nut exports were directed to Vietnam.
For the past 16 years, Vietnam has maintained its position as the leading global exporter of Cashew Kernels, contributing to approximately 80% of the world’s total exports. However, faced with a shortage of processing materials in 2022, Vietnam turned to Cambodia to meet its raw cashew needs. Reports indicate that Cambodia, with a total export of 670,000 tons of raw cashew nuts to the international market, played a pivotal role in filling this gap, with Vietnam alone purchasing 660,000 tons valued at over a billion dollars. The Vietnam Trade Office in Cambodia officially confirmed this information in a statement released on February 7, 2023.
This strategic shift is beneficial for Cambodia, whose cashew industry has been steadily expanding. With the increasing global demand for raw cashews, Cambodian farmers are poised to benefit from their exports. Simultaneously, this development is advantageous for Vietnam, addressing its crucial cashew processing needs and contributing significantly to its economy. The symbiotic trade partnership is anticipated to deliver substantial advantages to both nations, with Cambodia gaining access to Vietnam’s robust processing capacity, and Vietnam securing a reliable supply of high-quality raw cashews.
In 2022, Vietnam imported almost 1.9 million tons of raw cashew nuts.
Vietnam’s recent action is thought to be driven by its ongoing challenge to secure a sufficient supply of raw cashews for its processing sector. The Vietnam Cashew Association (Vinacas) disclosed that in 2022, Vietnam imported approximately 1.9 million tons of cashew raw materials at an average unit price of $1,400 per ton, resulting in a total expenditure of around $2.66 billion.
According to information from the Vietnam Cashew Association, numerous businesses engaged in cashew importation from Africa for production face the risk of not meeting processing standards. As reported by Vneconomy news, only 70% of the imported cashews comply with the required standards, leaving the remaining 30% falling short of importers’ standards. These risks underscore the critical need for Vietnam to explore alternative sources of raw materials to sustain its cashew industry.
Vietnam only provides 30% of RCN needed for Local Businesses
Vinacas, a cashew trade organization, highlights the formidable challenge confronting Vietnam’s cashew industry in securing adequate raw materials for processing. Despite having a cashew-growing area exceeding 300,000 hectares, Vietnam is able to supply only 30% of the required raw cashew nuts for its domestic processing cashew factories. In response to this issue, Vinacas has proposed to the Ministry of Agriculture and Rural Development the need to establish a comprehensive, long-term plan for cashew growing areas. Additionally, Vinacas suggests exploring collaboration opportunities with neighboring countries such as Cambodia and Laos to jointly develop and enhance cashew material areas.
