Not in a hurry to buy raw cashew nuts

In 2024, Vietnam’s cashew industry had a successful export year, with cashew kernel exports reaching a record high of 765,368 tons and revenue exceeding a record USD 4.6 billion. Vietnam has reaffirmed its position as the world’s largest cashew exporter for the 18th consecutive year. This serves as an important foundation for the industry as it enters the 2025 production season.

According to the Vietnam Cashew Association (VINACAS), as of now, the cashew harvest in Vietnam and other countries is proceeding as usual. Global raw cashew nut production is expected to increase due to newly planted areas reaching the harvesting stage.

Leading traders in the cashew industry in Binh Phuoc province - the largest cashew-growing and processing province in Vietnam - also share the view that this year’s cashew production will increase.

At the conference on crop updates, pricing, market trends, and purchasing strategies for 2025 organized by the Bình Phước Cashew Association, Mr. Vu Thai Son, Chairman of the association, forecasted that global raw cashew nut production will increase by 8 - 10% compared to 2024.

Mr. Ta Quang Huyen, General Director of Hoang Son 1 Joint Stock Company (Binh Phuoc), predicted that global cashew yield will rise by 10% this year, while total production could increase by 15 - 20% due to the expansion of newly cultivated areas.

Mr. Huyen's confidence in making this forecast comes from Hoang Son 1's surveys and data collection on the cashew harvest in Vietnam, Cambodia, and several African countries, including Tanzania.

For many years, Hoang Son 1 has consistently purchased a large volume of raw cashew nuts from Tanzania. As of early March this year, the company has already purchased over 20,000 tons of Tanzanian raw cashew nuts.

Mr. Huyen shared that at the start of Tanzania’s cashew season, Hoang Son 1 sent representatives to the country to assess yield and production levels. When Tanzanian raw cashew nuts were initially offered by exporters at USD 2,000 - 2,050 per ton, Hoang Son 1 did not buy. Later, as prices dropped to USD 1,900 and then USD 1,850 per ton, the company still refrained from purchasing. It only bought a small quantity when prices fell by another USD 50 per ton.

As prices continued to decline - hitting USD 1,700, then USD 1,600, USD 1,400, and even as low as USD 1,350 per ton. Hoang Son 1 increased its purchases at each price drop. This continuous decline in prices indicates that Tanzania’s cashew production this year is higher than last year.

According to Mr. Huyen, Tanzania’s raw cashew nut production was 270,000 tons in 2022, decreasing to 240,000 tons in 2023. However, in the 2024 cashew season, production surged to 440,000 tons.

Notably, the cashew harvest cycle in Tanzania often aligns with that of Vietnam, Cambodia, and West African countries. When Tanzania experienced a poor harvest in 2023, the 2024 cashew harvests in Vietnam, Cambodia, and West Africa also suffered losses. (Tanzania's cashew season occurs in the final quarter of the previous year, corresponding to the early-year harvest season in Vietnam, Cambodia, and West Africa.)

In Tanzania’s 2024 cashew season, despite unseasonal rains, production was abundant. Therefore, the 2025 cashew season in Vietnam, Cambodia, and West Africa is expected to see favorable conditions with increased output.

For this reason, Mr. Huyen emphasized that African raw cashew traders will not dare to hold onto large stockpiles this year. If they do, it will only be a small quantity after prices have dropped significantly. When production rises and traders are reluctant to stockpile, raw cashew prices will not increase but instead continue to decline.

Mr. Nguyen Minh Hoa, Vice Chairman of VINACAS, stated that global traders of cashew nuts and dried nuts predict a 10 - 15% increase in global cashew production this year. This means total global production could reach nearly 6 million tons.

With rising production, raw cashew nut prices in Africa are on a downward trend. Meanwhile, the price of cashew kernels on the global market remains uncertain from May onward. Therefore, according to some industry traders, businesses should not rush to purchase raw cashew nuts while prices are still high. Instead, they should carefully assess market conditions and only buy when raw cashew prices are reasonable relative to kernel prices to ensure profitability in production and trade.