Vietnam to impose strict regulations on exporters to "polish" Vietnam’s cashew nuts

The cashew industry may become the second sector in Vietnam, together with rice, which applies strict regulations in order to strengthen the Vietnamese cashew nut’s competitiveness in the world market.

The Vietnam Cashew Industry (Vinacas) has submitted to the Prime Minister and the competent Ministries of Agriculture and Rural Development, Industry and Trade, Finance and local people’s committees the plan on “conditional cashew nut trading.”

Easy requirements kill authentic businesses

In March 2012, when the cashew harvesting began in Binh Phuoc province, which is considered the “cashew granary” of Vietnam, hundreds of merchants from tiny businesses appeared on the market, scrambling for materials with cashew processing enterprises.

Since there was no standard on the material quality, the merchants “ignored” all the basic requirements in food hygiene, quality or prestige, and offered to sell products everywhere.

Foreign partners, who realized the weak point of Vietnamese cashew products, tried to press the prices down to be able to collect products at low prices. As a result, the cashew nut market got shaken with the prices falling down continuously.

A report has pointed out that 70 percent of the cashew enterprises in Binh Phuoc province had had to scale down the production or shut down their workshops by November 2012.

According to Vinacas, there are 296 cashew nut exporters, including tiny businesses with limited financial capability and low technical requirements, which are ready to export low quality products at low prices. The enterprises are believed to target high profits from quick business fits, while they do not intend to do long term business and do not plan to build up their brands.

The dumping activities by the enterprises have given a reason to foreign importers to force the prices down, thus having caused chaos to the market.

Vinacas’ Chair Nguyen Thai Hoc has said that though Vietnam’s cashew nut export turnover increases in 2012, it gains less in money because of the export price decreases.

Therefore, Vinacas believes that it is necessary to stipulate that cashew nut export is a conditional type of business.

Hoc said that most of the prestigious Vietnamese cashew enterprises have been following the internationally standardized quality management system, especially the ones which are the members of the G20 Club (the 20 biggest exporters).

Therefore, he said communication campaigns need to be launched so as to advise foreign partners to learn well about their Vietnamese partners and avoid the tiny enterprises, which have been “living from hand to mouth.”

VInacas has proposed that Vietnamese and foreign businessmen would obtain the certificates on meeting necessary requirements to trade cashew nuts, if they can meet the requirements set up by the competent agencies.

Besides the basic requirements, cashew nut exporters must have cashew processing factories with closed production lines with the minimum capacity of 2500 tons of raw cashew nuts a year and the technique complying with the national standards.

Especially, enterprises must have the production management system in accordance with HACCP-GMP standards to ensure the food safety.

The certificates on meeting the requirements for trading cashew nuts would be granted by the Ministries of Industry and Trade or Agriculture and Development as authorized by the government (with validity date), after considering the suggestions from Vinacas or local agriculture departments.

Vietnam’s cashew nut export turnover in 2011 was 8.8 times higher than that of 2000, which means a 21.9 percent growth rate a year in the last 10 years. Meanwhile, the figures were 3.2 times and 11.2 percent in the total export turnover of the country.

Source: english.vietnamnet.vn