Cashew trade faces heat from Vietnam

Indian cashew product exporters are facing a stiff competition from Vietnam, the latter having emerged as a key player within a span of 10 years, traders said Friday.

"Vietnam has taken only 10 years to emerge as a major player in the export market. According to indications available, they are now exporting nearly 100,000 tonnes against our 125,000 tonnes. We have been in the business for nearly 80 years," says K Sasi Varma, secretary, Cashew Exports Promotion Council of India.

Prakash Nair, director, Vijayalaxmi Cashew Co, a leading exporter from India, also agreed that Vietnam has emerged as a key competitor for Indian cashew exporters.

"There is no doubt that Vietnam is our biggest competitor in the international market. They have an advantage as their processing cost is lesser than ours," Nair said.

However, he was not sure of the total quantity of exports from Vietnam.

"The figure of 100,000 tonnes may be slightly exaggerated," he said.

A report in the online Vietnam Economic Times quoting Vietnam ministry of trade claimed that the country plans to export 110,000 tonnes of cashew in 2005 worth US $450 million.

It also claimed that in first quarter of 2005 Vietnam exported 18,000 tonnes of cashew kernels fetching a turnover of $109 million, an increase of 51.7 per cent in value terms.

The processing industry in Vietnam is expecting to procure 350,000 tonnes raw nuts from the domestic market and import 100,000 tonnes in the year, it said.

The US is the biggest export market for Vietnam, accounting for 40 per cent of its total exports. The US accounts for more than 50 per cent of Indian cashew exports.

According to provisional estimates, in 2004-05, India exported cashew kernels and cashewnut shell liquid worth Rs 2,600 crore against Rs 1,804 in 2003-04. Total exports from India in 2004-05 (April-March) are estimated at 125,000 tonnes.