To support cashew trading enterprises to make action plans and react to the complicated Covid-19 pandemic, Vietnam Cashew Association has proposed two predictions for the cashew market and in each prediction, there is detail description for enterprise to review the company’s plan.
According to VINACAS, despite the pandemic, exporting cashew kernels within the first 6 months in 2020 still reached above 232 thousand metric tons, cost 1.53 billion USD, increased respectively 16% for quantity and 1% for quality compared to the same period last year. The average export price was 6,606 USD/ton of cashew kernels, reduced 14% compared to the same period last year.
In reality, the quantity of export products without destination (cargo stored in bonded warehouse to wait for exporting procedure) are still high. Untold, price of white cashew kernels reduced significantly in more than a decade. The lower grade was decreased much more than ever. Because of low price, customers were more concerned about the quality and origin tracking. Some customers were requesting for negotiation, supporting price or reducing the price,…
According to records, there were many disputes in trading happened, many shipments had to return,… Moreover, there was an paradox that was still happening some time, same product code, the domestic cashew kernel price was 15% – 20% higher than the export price, which made the business of some enterprises, especially the trading companies faced many obstacles.
Predict that in the next few months there would be more difficulties due to the pandemic. Moreover, cashews are not essential products and non-replaceable. Therefore, VINACAS urgently proposed predictions for this business in the next months to help enterprises to have a multi point of view and suitable action plans.
In the first prediction (good senario): the pandemic was under controlled, vaccines and medicine were researched and developed successfully, the supply chains of the whole world would restart normally soon. (however, this chance was rare). According to this prediction, the demand for cashew kernels from China market increased ; Indian market was also coming back very soon and demand from EU was predicted to be increased drastically. Especially, Vietnam – EU Free Trade Agreement was officially effective on 1 August 2020. Even though this was a bad new, many small and medium cashew manufacturers in Vietnam an India would reduce the production or stop operation, which made the supply reduced; Theorically, the price would increase as demand and suply theory.
In the second prediction (bad senario): The second wave of Covid 19 might be happen again with many negative effects and unpredicted “force majeure” caused by the pandemic. The supply chain of cashews in the world was continued “scattered”. If this senario happened, the demand from China was still dulled during the peak period at the year end. The same as the demand from India. A lot of cargo arrived and stored in the bonded warehouse. There was no customers, who had financial ability strong enough to invest to these shipments in a long-term. Moreover, the Ivory Coast Government changed the new policy and allow to “release cargo” during the sensitive period, which made the price of cashew droped down significantly.
Sources: congthuong.vn
