The domestic cashew industry is facing a shortage of nuts for its processing factories while struggling to inrove export quality to gain a competitive advantage in the global market, said Nguyen Duc Thanh, chairman of the Vietnam Cashew Association (Vinacas).
Domestic enterprises that specialize in processing cashew nuts are at risk due to a lack of materials. Some said they had enough supplies to maintain production in February, but the next three months are likely to see serious cashew shortages, according to Thanh.
This is partly to blame on limited stocks from 2015 and the drought that has hit the 2016 harvest.
Cashew imports from the Ivory Coast and other African countries are also unstable, with some companies refusing to fulfill contracts agreed with Vietnamese firms, Thanh added.
In February 2016, imports from the Ivory Coast were minimal, according to Vietnam Customs.
In addition to input shortages, domestic processors are struggling to increase the quality of their products, with only 22 out of 371 enterprises meeting ISO standards in 2015, said Vinacas.
The Ministry of Agriculture and Rural Development imposed a set of quality requirements in 2009 for local processing businesses, but many cashew processors do not comply with the rules, said Thanh.
Some U.S. companies have complained that Vietnamese cashew nuts are inferior to products from Brazil or India, the other top two global exporters, as they do not have a uniform color and contain a higher percentage of impurities, he added.
The U.S., the largest importer of Vietnamese cashews, imposed food safety restrictions on Vietnamese cashews at the beginning of 2016.
“The best way to promote Vietnam’s cashew industry is to shift focus from price to quality,” said Thanh.