Turnaround in cashew industry: No 1 position shaken to its foundation

After being No 1 in cashew nut exports in the world for the last two decades, the unexpected reversal from a  trade surplus to trade deficit has caused Vietnam’s cashew position to wobble.

Vietnam’s cashew nut products are present in 90 countries and territories, with export turnover increasing steadily year after year. 

In 2006, with export turnover reaching $520 million, Vietnam officially became the biggest cashew nut exporter in the world. In 2010, cashew nuts for the first time brought turnover of $1 billion, joining the $1 billion club, or the club of products with annual export turnover of $1 billion or higher.

After that, cashew export turnover soared from $2.84 billion in 2016 to $3.36 billion in 2018. In 2019-2020, export turnover began decreasing slightly. However, Vietnam has had a trade surplus in cashews over the last 30 years.

In 2021, despite Covid-19 the cashew industry still earned $3.64 billion from cashew nut exports, up 12.9 percent over 2020.

However, to obtain such a high export turnover, Vietnam had to spend big money to import raw materials. The General Department of Customs (GDC) reported that Vietnam imported 2.87 million tons of raw cashew, worth $4.185 billion, which meant an increase of 91.3 percent in quantity and 132.5 percent in value compared with 2020. 

This was the first year that Vietnam witnessed a record high trade deficit after three decades of trade surplus in cashews.

In 2022, Vietnam regained its status of a trade surplus country when it exported $3.08 billion and imported only $2.68 billion worth of cashews.

However, in the first months of 2023, Vietnam once again witnessed an excess of imports over exports. In the first quarter of 2023, cashew nut export turnover climbed to $648 million, up 4.5 percent compared with the same period last year, while import turnover was $760 million, up 2.8 percent.

Since 2021, Vietnam has imported raw materials from Cambodia instead of Africa. In 2021, imports from Cambodia accounted for 44.8 percent of Vietnam’s total import turnover, up by 5.17 times over 2020 in quantity and 6.79 times in value.

In 2022, cashew nut imports from Cambodia accounted for 40.6 percent of total import turnover. Vietnam also imported raw materials from the Ivory Coast, Ghana, Nigeria and Tanzania.

In the first three months of the year, Vietnam spent $447.5 million to import cashew nuts from Cambodia, which accounted for 58.9 percent of total cashew import turnover.


The biggest advantage of Vietnam’s cashew industry is the advanced processing technology created by Vietnamese. There are 500 enterprises that produce and process cashew nuts with a total capacity of 4 million tons of raw cashew nuts a year.

However, the advantage is becoming less significant as Africa and Cambodia have been processing cashew nuts domestically to reduce raw export volume. 

They have created preferential policies to encourage investors to set up processing factories and supervise export of raw cashews by imposing high taxes on exports.

Meanwhile, Vietnam is exempting tax on both raw and cashew nut imports for processing and export.

With the policy, Vietnam’s large processing companies would rather shift to importing cashew nuts and scale down production by focusing on some final production stages, skipping the other stages of modern production lines they have invested in.

The Vietnam Cashew Association (Vinacas) said the No 1 position Vietnam has had over many years has been shaken and Vietnam will fall from the position if the country doesn’t recognize the problem and take action now.

Vinacas is worried that cashew nut processing companies for export, mostly foreign invested enterprises, may gradually block the raw material sources of Vietnam’s plants, thus leading to bankruptcy of Vietnam’s small and medium plants.

This is the result of the policy allowing import of cashew nuts into Vietnam and not applying measures to protect the domestic cashew industry.

Vinacas has sent a dispatch to the Vietnam Confederation of Commerce and Industry and the Ministry of Industry and Trade asking for help in the issues related to cashew import tax. It is seeking imposition of a minimum import tax on cashew nuts; the way India is doing.

Expert Hoang Trong Thuy said that Vietnam has been relying on import materials, while it doesn’t attach much importance to developing material growing areas. As a result, when raw cashew suppliers change their strategies, the Vietnamese industry has suffered.

Viet Nam Net