Looking for market share increase of Vietnamese cashews in Europe

According to Ms. Nguyen Thi Thu Thuy, Deputy Director of the Export Support Center under the Department of Trade Promotion, Ministry of Industry and Trade, the EU is currently the second largest cashew nut export market of Vietnam. The export proportion accounts for 23% of the total volume and 22% of the total value of the sector. Vietnam's cashew exports to the EU market in 2021 reached 135 thousand tons, worthed US$ 816 million, up 16.5% in volume and 7.9% in value compared to 2020.

Vietnamese cashew nuts are exported to many Western and Eastern European countries. In Western Europe, Vietnam's cashew nuts are exported to following countries Germany, the Netherlands, France, Belgium, ect., in which the cashew sector has well exploited the Dutch and German markets. Germany and the Netherlands are currently important trading hubs for cashew nuts as traders not only import to serve the needs of these countries but also import for re-export to other EU markets.

In the Eastern European region, Vietnamese cashews are present in many countries, such as Russia, Poland, Romania, Ukraine... Recently, due to the influence of the Russia - Ukraine conflict, Vietnam's cashew exports are facing many difficulties, such as the risk of supply chain disruption due to escalating trade and geopolitical tensions. High freight rates also create more difficulties for import and export activities.

However, in the face of the trend of diversifying supply along with advantages from FTAs, Vietnam has many favorable conditions to increase its attractiveness and competitiveness, paving the way for the establishment of a new supply chain with EU market in general, Eastern and Western European markets in particular. It is also achance to attract a wave of high-quality investment and deeply involve in global value chains.

The growth of cashew nut exports to the EU contributes significantly to the overall growth of the cashew sector. The tax rate for cashew nut products imported into the EU from Vietnam was reduced to 0% immediately after the EVFTA comes into effect from August 1, 2020. This reduction is very important because before the EVFTA took effect, the tariff on cashew nuts imported into the EU from Vietnam ranged from 7 to 12%. The implementation of the EVFTA is expected to bring great opportunities for the cashew sector.

Mr. Dang Hoang Giang, General Secretary of the Vietnam Cashew Association (Vinacas), says that Vietnam currently accounts for over 80% of the export market share of the world cashew sector and has continuously been in the No. 1 position since 2006 until now.

The EU and UK accounted for nearly 24% of Vietnam's cashew kernel export market share in 2021, reaching over US$ 867 million out of a total of US$ 3.73 billion of cashew exports.

European countries that imported the most Vietnamese cashew nuts in the last year were the Netherlands (US$ 355 million), Germany (US$ 129 million), the UK (US$ 104 million), etc.

In order to promote cashew nut exports to the European market in the coming time, Mr. Dang Hoang Giang proposes that the Government of Vietnam and the Governments of EU countries should concretize cooperation through FTAs, typically EVFTA, UKVFTA, thereby creating maximum trade facilitation for cashew businesses through the commitments of the FTA.

According to Mr. Giang, the market share of Vietnam's cashew nuts in European countries is currently from 40 - 60%, and can completely increase to 60 - 80% in the near future, especially in key markets such as the Netherlands, the UK, Germany, France, Spain.

The European food industry currently focuses on five food trends, including health, convenience and technology, alternative proteins (vegetable origin or plant base), sustainability and waste reduction, new flavors and food experiences. Vietnamese cashew nuts fit all those 5 trends.

According to the International Trade Center (ITC), in the first two months of 2022, Germany imported 8.74 thousand tons of cashew nuts, worth US$ 64.5 million, up 8.7% in volume and 11. 2% in value over the same period in 2021.

In which, Germany imported 6.2 thousand tons of cashew nuts from Vietnam, worth US$ 45.12 million, up 26.7% in volume and 32.9% in value. Vietnam's cashew nut market share in Germany's total imports has increased from 60.77% in the first 2 months of 2021 to 70.83% in the first 2 months of 2022.

And according to statistics from the General Department of Vietnam Customs, in the first 4 months of 2022, Vietnam's cashew exports reach 153.35 thousand tons, worth US$ 913.5 million, down 5.2% in volume and down 4 .1% in value over the same period in 2021. The 5 largest markets of Vietnamese cashew nuts in the last 4 months are the US, the Netherlands, China, Germany and Australia.