Vietnam cashew nut exports to the EU have opportunities to grow

According to the Industry and Trade Information Center of the Ministry of Industry and Trade, 2021 can be a competitive year for exports of raw cashew nuts and cashew kernels.

The shortage of supply of raw cashew nuts brings a great opportunity for traders.

As for cashew kernels, it is noticeable that the demand is stagnant due to the large inventory of cashew kernels in the US and EU as a result of high imports in 2020 when the price of cashew kernels dropped. Moreover, this market has been affected by the third wave of the Covid-19 pandemic in recent months.

Cashew kernel price in the world is expected to increase because of the short supply of cashew nuts in Vietnam - the world’s largest exporter of cashew nuts.

Exports of Vietnamese cashew nuts in 2021 is forecasted to be fruitful in the EU market, especially with processed products.

Under the EU- Vietnam trade agreement (EVFTA), which took effect on August 1st 2020, the tariff on processed products from cashew kernels imported into the EU from Vietnam reduces to 0%. This reduction is very important because tariffs ranged from 7% to 12% previously.

A noteworthy detail under the EVFTA is the rules of origin which stipulates that cashew kernels exported from Vietnam must be originated from the country.

However, the country of origin regulation does not apply to processed cashew products. When the tariff is exempted, importers will benefit from cost reduction and the selling price in the imported market will also be adjusted. This will shift demand for cashews from countries that are not eligible for tariff reductions to Vietnamese products.

In 2020, the 10 largest export markets of Vietnamese cashews consist of 3 markets in the EU including the Netherlands (rank 3rd), Germany (4th), and Italy (9th). Last year, Vietnamese cashews exported to the Netherlands reached 62 thousand tons, equivalent to nearly US$400 million; 17 thousand tons to Germany, US$127 million; and more than 8 thousand tons to Italy, US$42 million.

In addition, the United Kingdom which has just left EU ranks 6th, with 16 thousand tons, equivalent to US$92 million.