Ivorian exporters break contracts and raise prices, Vietnam's cashew industry faces supply crisis

Published Jun 24, 2024

Tridge summary

The Vietnam Cashew Association (Vinacas) is reporting significant issues for raw cashew importers, who are facing potential significant losses due to African exporters' failure to honor contractual obligations and price hikes of up to 50%. This situation is exacerbated by a decrease in Vietnam's domestic cashew supply, which relies heavily on imports, primarily from Côte d'Ivoire and other African countries. The current crisis is further complicated by the severe effects of El Nino on cashew production in Africa, leading to a cashew shortage and increased market prices. As a result, many import contracts have resulted in substantial losses for Vietnamese companies, and the association is urgently seeking remediation, including requests for contract adherence and negotiations with African countries for the resumption of raw cashew exports. Additionally, the association is advocating for efforts to enhance Vietnam's cashew production quality and reduce its reliance on imports.

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Original content

According to the Vietnam Cashew Association (Vinacas), many raw cashew importers are in trouble and face the risk of suffering heavy losses due to African raw cashew exporters not delivering according to the contract and seeking to increase the selling price by 40%-50%. Cashew processing plants are also facing a shortage of raw materials. Bach Khanh Nhut, vice chairman of the association, explained that Vietnam's domestic cashew supply only accounts for 10-12% of the total cashew production and processing of enterprises, so Vietnam's cashew processing plants need to import a large amount of raw cashews. Vietnamese companies import more than 2.5 million tons of raw cashews each year, of which about 1.7 million tons come from Africa and 700,000 tons from Cambodia. Of the African supply, about 800,000 tons come from Côte d'Ivoire, and the rest comes from East African countries such as Tanzania. Nhut said that Vietnamese companies sign import contracts with their partner companies in ...

Source: Guojiguoshu