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Cashew sector: Money will solve the weakness ?

Late last month 7/2015, Vietnam Cashew Association (Vinacas) has proposed MARD adopt guidelines established support fund associated with producing and exporting it to stabilize production conditions, promote affiliate products production and consumption of cashew business, mitigate risks in trading and exporting. The Fund was established with the revenues from four sources: the State's support, the first attack on the export revenues of all businesses that export processing, funding and other revenue sources.

The weakness of the industry

Industry experts said that the establishment of the Fund supports the development of what is now very necessary. Because over the past 9 years, Vietnam has always been the national leader in cashew exports, accounting for 30% share of world processing conditions. However, to keep the continuous export growth, the industry's leading advantage still revealed weaknesses that need to be overcome.

The proposal to establish a support fund is the latest move in the context of this sector Vinacas frequent shortages of raw materials for processing as today. Estimated that each year, this sector has to import about 500000-600000 tons of crude (of which at least 50-60% from Africa).

Import volume is increasing continuously for many years to serve the demand for export processing. Particularly in the first 6 months of 2015, imports of crude for processing have reached 414,000 tonnes worth $ 527 million, up 73.2% in volume and 2-fold increase in value over the same period in 2014 .

The weakness of the industry is crucial to its heavy dependence on imports of raw materials, especially from Africa. The reason is explained that Vietnam area fell sharply in the years of high rubber prices to the highest annual output reached only 400,000 tons, while demand Processing Results 1 - 1.2 million tons.

Meanwhile, imports of crude has lower quality domestic thing, so many risks on product quality is inevitable. On the other hand, this year, as supplies of crude from Africa limited due to crop failure condition plus the price of crude rose sharply, leaving many businesses struggling to manage imports of raw cashew nuts. The fact that domestic production capacity can only meet about 30% of the needs of the processing industry. As for the exporters, the lack of links with the producers by size too small. Therefore, about 70% of crude imports required to meet demand in domestic processing.

The heavy dependence on imported raw materials make manufacturing enterprises exports high costs, competitiveness and low added value. This weakness will become a disadvantage when Vietnam participate in TPP.

This was not the situation this sector are exporters of cashew growing each year and leads to unfair competition, uneven quality.

In 2014 there were 345 cashew exporters, but of which only 73% of turnover is less than $ 5 million. Not only that, there are approximately 265 establishments with a capacity of processing 1.2 million tons of processed nuts / year, of which 119 establishments, enterprises classified as C, ie not guarantee safety food, accounting for nearly 45% of this potential and risks for manufacturing and export of cashew nuts.

For example recently, The FDA (the Drug Administration of the US Food and) a trip to Vietnam to survey multiple processors that export to the US market in the provinces of Binh Phuoc, Dong Nai, Ba Ria - Vung Tau ... If these facilities do not meet the required quality will be difficult to penetrate deeper into the US market.

Prior to the inadequacies of the industry, in a meeting recently with leaders of MARD Nguyen Duc Thanh, chairman of Vinacas, has suggested the State to create the best conditions for business sector development because agricultural products which are major exports of Vietnam.

The statistics for the first 6 months of 2015 saw the volume of cashew exports totaled 150,000 tons for $ 1.08 billion, up 14% in volume and 28.2% in value over the same period of 2014. Counties it is 1 in 2 items of solid growth in volume and prices, the largest contribution to the exports of the sector.

One expert noted that this sector needs large but material things develop material zones in the country are extremely difficult. The planted area is increasingly reduced, in the period from 2005 - 2014, an area of ​​122 200 hectares that has been reduced due to plant it because people have higher incomes.

Solving problem of raw materials

The processing enterprises focused how many export products, increasing business profits rather than sit back and focus on developing sustainable material areas.

Intensification, applied science and technology to improve productivity, quality and production efficiency is one of the concerns of the industry today.

1 in 3 countries with acreage and yields the highest thing in the world, Vietnam currently has 450,000 hectares that are grown mostly concentrated mainly in the southeastern provinces such as Binh Phuoc, Ba Ria - Vung Tau, Dong Nai and Tay Nguyen region.

However, over 75% of the garden is the same old thing, extensive, yet to be renovated ... causing difficulties in the investment to increase productivity. Meanwhile, according to industry planning articles of MARD, 2020, the area under cultivation of 300,000 hectares stabilize the country, the average yield of 1.5 tonnes / ha. In growing areas of focus of key areas of over 2 tonnes / ha; cashew output of about 400,000 tons. Therefore, in the scheme established support fund associated with producing and exporting it, Vinacas said will spend approximately 50% of funds of funds to support the program of intensive rehabilitation and research orchard varieties, supports cashew farmers.

The rest of the funds will be spent on research to improve the process technology, manufacturing processing equipment, enhance product quality, food safety and hygiene in processing, trade promotion and development domestic market development.

One thing that most businesses and industry experts are concerned that development assistance funds such as how to ensure transparency, openness and effectiveness.

In terms of policy, the establishment of the Development Assistance Fund has received the approval of the business and state management agencies. However, the way in collecting and how the Fund operates, the wait time is still underway to bring efficiency to the sector that future.

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