Vietnam cashew sector cries for help over surging imports from Africa
Vietnam cashew sector cries for help over surging imports from Africa
Vietnam’s leading position in cashew nut exports is being threatened by a surge in cashew kernel imports from Africa.
Vietnam exports some US$3.5-3.8 billion worth of cashew nuts per year, taking the lead in the world for many consecutive years, Bach Khanh Nhut, vice-chairman of the Vietnam Cashew Association (Vinacas), said at a conference attended by leaders of the Vietnam Chamber of Commerce and Industry, trade associations, and enterprises in Ho Chi Minh City on Wednesday.
The country imported nearly 10,200 metric tons of cashew kernels in the first two months of this year, equivalent to nearly 44,000 metric tons of raw cashew nuts.
The respective figures were some 78,600 and 350,000 metric tons last year, higher than the volume of raw cashew nuts produced by Vietnam in a year, according to Vinacas.
Cashew kernel imports were mainly from Africa.
Importers of cashew kernels to Vietnam are mainly foreign direct investment enterprises, which have taken advantage of African countries’ incentives to develop cashew nut processing plants there.
They later ship low-cost cashew nut batches to Vietnam for re-export.
Meanwhile, it costs Vietnamese companies VND100-500 billion ($4.3-21.3 million) to build a cashew nut processing plant.
The Vinacas representative added that if Vietnamese enterprises shift to import cashew kernels from Africa, they will complete only one to three final phases, or 20 percent of the processing lines, before exporting the products, thus wasting the investment in the processing lines and resulting in lay-offs.
Nhut took India as an example, saying that the South Asian country levies a 25-percent tax rate on cashew kernel imports, hindering Vietnam from exporting the product to this market.
Meanwhile, Vietnam has yet to take measures to protect local cashew nut production.
“We urgently propose the government, the Ministry of Industry and Trade, and relevant agencies to find out solutions," Nhut said.
“Negotiations are needed to ask African countries to exempt duties on raw cashew nut exports, ensuring fairness in competition.”
If the proposal is rejected, Vietnam should impose a 25-percent tax rate on cashew kernel imports like India to protect local cashew nut processors and exporters, Nhut added.
