THERE IS SOMETHING ROTTEN IN THE STATE OF… CASHEWS (to partially quote the great William Shakespeare).
On May 20th, 2021, Vinacas finally published the import/export figures for the month of April 2021. Finally! Because usually, Vinacas always publishes these figures around the 14th/15th of each month. There are, obviously, plenty of reasons to think of why Vinacas was so late, but what made it even more peculiar was the fact that only the total figures were given for the import of RCN and the export of kernels.
Normally, Vinacas publishes details such as origins from which the RCN came in from as well as export markets where the kernels were shipped to.
We do not know the exact reason why this publication differs so much from previous ones, but rumor has it that some Vinacas members did not want Vinacas to show where the vast majority of the RCN imported came from.
One month ago, Vinacas had shown the cashew industry that the import figure for March 2021 was 473,317 mt, of which 367,210 mt came from Cambodia. The March number from Cambodia surprised many market participants already, including ourselves, so we asked Vinacas if this number was correct and not a mistake. The explanation we received was that due to the Covid pandemic, the border between Cambodia and Vietnam was strictly controlled and made the actual exports from Cambodia to Vietnam transparent.
Figures from Vietnam
So in Vinacas’ report for April, we can see that Vietnam imported 459,031 mt making the total for the period January-April 2021 a staggering 1,199,195 mt of RCN.
Although not mentioned in their report, we understand that Cambodia exported 836,000 mt to Vietnam in this period!!!!
The question everyone now has to ask is: is this possible?
According to an official report, Cambodia exported just short of 219,000 mt to Vietnam in 2020, increasing about 8% compared to 2019. We checked and found more official figures in and from Cambodia showing total production in 2018 of 191,921 mt.
How did Cambodia go from:
191,000 mt in 2018 to 202,000 mt in 2019 to
219,000 mt in 2020 to
836,000 mt in the first 4 months of 2021?!
According to this newspaper article from 2017, Vinacas and the Cambodian Ministry for Agriculture were jointly working on planting cashew trees on 500,000 hectares to reach a production of 1 million tons. Vinacas, through its members, would donate money, knowledge, and technical expertise/support in an effort for Cambodia to surpass Ivory Coast as the world’s biggest producer of RCN.
Very clever from a Vietnamese point of view since it would make the Vietnamese cashew industry less dependent on imports from Africa. Through some experts in Vietnam, we learned that Vietnam distributed high productivity seed to Cambodia and according to these experts, a total production of 800-900,000 mt could very well be possible.
We would welcome and appreciate any input, comments, and/or suggestions from our readers about this subject. So, feel free to share your input under our LinkedIn post. This huge number out of Cambodia could be a game-changer for the cashew industry.
Conclusion: plenty of cashews, but... Shipment problems
Anyway, the conclusion, for the time being, is that there are plenty of cashews available. However, there is still the problem of shipments. The cashews are available, but much seems to be in the wrong place.
The RCN is either still in West Africa or in warehouses in Vietnam and India, and shipping the kernels to the markets in Europe and the USA is very difficult.
Shipping lines are making exorbitant profits, and whereas we wish everyone the best, we feel that they should tone it down a bit since many companies are hurting tremendously having to pay higher freight rates every two weeks.
Last but certainly not least, and much to our regret, Vietnam is now seeing a spike in new Covid cases, and authorities are speaking of a new variant; a combination of the Indian and the English variants. Authorities are afraid that, whereas they have been able to contain Covid for so long, the numbers will get out of control if they do not take strong measures quickly.
So for everyone out there, please stay safe! 🙏
CLICK HERE TO READ OUR NEWEST UPDATE ON THIS MARKET REPORT! Vinacas published their full report today (2nd June 2021), so we wrote an update showing more figures and a quote from Vinacas about the strong increase from Cambodia.