Raw cashew prices increased by 50%, and cashew businesses had headaches because of broken contracts.

Depending on imported raw materials for up to 90%, Vietnamese cashew processing factories are restless because their partners break the deal and do not deliver.On the evening of May 31, the Vietnam Cashew Association (Vinacas) held a press meeting to inform about recent cashew market fluctuations.

According to Mr. Nguyen Minh Hoa, Vice President of Vinacas, Vinacas recently received feedback from members about not receiving enough raw materials from partners in West African countries due to the sharp increase in raw cashew prices. Each year, Vietnam imports more than 3 million tons of raw cashew nuts, of which about 2.2 million tons come from Africa (mainly West Africa). Domestic supply only accounts for about 10%.

In February, the price of raw cashew nuts was only about 1,000–1,050 USD/ton; in May, it was 1,500–1,550 USD/ton. Therefore, exporters have sought to delay deliveries, demanding support for price increases, and according to preliminary statistics, only about 50% of goods have been delivered according to contracts. “Normally, when businesses buy raw cashew nuts, they will sign a contract to export cashew kernels corresponding to the raw material price. With the current fluctuations in raw material prices, there will be many contract disputes by the end of the third quarter of this year. contracts between Vietnamese businesses and importers because of rising costs, many businesses do not have the ability to carry out signed contracts,”  Mr. Hoa predicted.

The reason for the increase in raw cashew prices is said to be because West Africa lost its crop with a forecast of about 7%, and some countries, such as Ivory Coast, applied a policy of temporarily suspending raw cashew exports to support domestic cashew factories. .

An increase in 50 businesses suffering from a general agreement The cashew industry is dependent on imported raw materials.

Mr. Ta Quang Huyen, Chairman of the Board of Directors and General Director of Hoang Son I Joint Stock Company, a top export enterprise, said that in 2024, he signed a contract to buy 52,000 tons of raw cashew nuts from West Africa but only received 25,000 tons at the correct price, which was criticized. about 12,000 tons; the rest received goods but had to increase prices.

“Some foreign partners are extorting money from Vietnamese businesses, forcing them to buy new ones at high prices or not delivering documents so that businesses cannot get the goods,”  Mr. Huyen said.

To respond to the situation, Mr. Huyen said he would work with Vinacas to create a list of unreliable partners to boycott together. Partners who intentionally break the contract will sue in court and comply with the court’s decision.

An increase in 50 businesses suffering from a general agreementVinacas leaders and businesses at the press exchange on the evening of May 31

Mr. Cao Thuc Uy, CEO of Cao Phat Co., Ltd., added that in 20 years of cashew business, the price of raw cashew nuts has never increased by 400 USD/ton in just 1 month, so he could not react in time.

“We usually sign export contracts 6–12 months in advance and have never encountered a shortage of raw materials like today. The increase in export prices does not correspond to the price of input raw materials, causing us a lot of headaches to maintain our credibilityy,” Mr. Uy said.

Mr. Bach Khanh Nhut, Permanent Vice Chairman of Vinacas, informed me that Vinacas will make a written proposal to the government and relevant ministries to remove difficulties for the cashew industry, including the impact of African countries removing them. ban on raw cashew exports. To the Ministry of Agriculture and Rural Development, Vinacas proposed paying attention to developing cashew raw material areas and developing high-quality, high-yield cashew varieties. This will help cashew processors become less dependent on imported sources so as not to be pressured.

Previously, Vinacas also sent a document to the Ivory Coast Cashew Exporters Association to consider supporting and reminding Ivory Coast’s members and export enterprises to properly implement signed contracts.

Source: The Laborer Newspaper