The unique standing of Viet Nam's cashew industry

The industry's special status

Viet Nam's cashew industry first entered the global cashew kernel market in the early 1990s. Following its establishment in November 1990, the Viet Nam Cashew Association (VINACAS) rapidly began efforts to shift cashew exports from raw cashew nuts to processed kernels. Viet Nam started exporting cashew kernels to China in 1992 and to the United States in 1994.

This strategic shift from exporting raw materials to finished kernels propelled the Vietnamese cashew sector to rapid growth and a strong position in the global market. By 2006, for the first time in the history of the world's cashew industry, Viet Nam surpassed India to become the top exporter of cashew kernels.

The industry's development has been particularly impressive since 2010, achieving highly significant figures. The success is notably attributed to "Made in Viet Nam" machinery and equipment.

Mr. Bach Khanh Nhut, Permanent Deputy Chairman of VINACAS, noted that previously, Vietnamese cashew processing factories relied almost 100% on manual labor due to the rudimentary machinery available at the time. The increasing number of factories eventually led to a labor shortage in the industry.

Viet Nam's cashew industry now leads the world in both exported cashew kernels and imported raw cashews. Consequently, all 14 Viet Nam International Cashew Conferences organized by VINACAS have attracted participation from numerous international agencies, organizations related to the cashew nut, and hundreds of domestic and foreign enterprises.

In response to the labor issue, and with government support, VINACAS initiated a state-level science and technology project in 2008 to "Perfect the technology, design, and manufacture of automatic cashew shell-cutting machines and testa peeling machines in the export processing line." Under this project, VINACAS gathered enterprises, scientists, and mechanical engineers to collectively invest in, research, manufacture, and improve cashew processing equipment.

The project was accepted and applied to production in 2010, sparking a "revolution" in Vietnamese cashew processing. This shift from manual production to mechanization significantly increased processing capacity and kernel output, reduced production costs, and ensured better quality and food safety.

Mr. Vu Thai Son, Chairman of the Board of Directors of Long Son Corporation, praised the agility of Vietnamese mechanical companies in researching, manufacturing, and improving machinery and equipment for cashew processing plants. Since Vietnamese machines serve local factories, timely adjustments and improvements can be implemented, leading to increasingly perfected and efficient equipment.

Thanks to the transition to mechanization and increased automation, cashew exports have consistently surged in both volume and value. In 2010, the cashew sector first became a "billion-dollar" industry with export revenue reaching USD 1.135 billion. This figure surpassed USD 2 billion in 2015, and USD 3 billion in 2017. In 2024, cashew kernel exports hit a record high of USD 4.343 billion.

Exported cashew kernels exceeded 200 thousand tons in 2012, then 300 thousand tons in 2014, 400 thousand tons in 2019, 500 thousand tons in 2020, 600 thousand tons in 2023, and reached a record 725 thousand tons in 2024.

Major challenges ahead

However, Viet Nam's cashew industry is now facing major challenges, primarily the growth of processing industries in raw cashew exporting countries. This development threatens a shortage of raw material supply for the Vietnamese industry, which heavily relies on imported raw cashews.

Many cashew-growing countries in Africa, which previously exported almost all of their raw cashew production, are now boosting processing to increase the value of the nut and create more jobs for their people.

At the Viet Nam International Cashew Conference 2025, Mr. Alex N'Guettia Assouman, Chairman of the Ivory Coast Cashew Exporters Association, stated that in 2024, the volume of raw cashews processed by factories in his country was 650 thousand tons, equivalent to the amount of raw cashews exported to Viet Nam.

Beyond Africa, Cambodia, the world's second-largest cashew producer (nearly one million tons), currently exporting almost all its raw cashews to Viet Nam, is also considering the development of its own cashew processing industry.

Mr. Vu Thai Son observed that the robust development of cashew processing machinery has not only benefited Viet Nam but is also helping African cashew-growing countries accelerate processing. Previously, a major obstacle in African countries was the lack of skilled labor, which can now be entirely replaced by machinery.

Changes in trade policies by both raw cashew exporting countries and cashew kernel importing countries also pose a major challenge for Viet Nam's cashew industry, exemplified by reciprocal tariffs in the United States. Cashew exports from Viet Nam to the US fell by 35% in volume during the first nine months of this year, as the tariff policy significantly impacted consumer spending power.

Strategies for sustainability and growth

Given these substantial challenges, Mr. Bach Khanh Nhut suggests that the Vietnamese cashew industry and its enterprises must first secure their market position and maintain consumer trust in Vietnamese cashews by enhancing quality and ensuring excellent food safety. Simultaneously, they must aggressively develop and explore new markets.

Furthermore, VINACAS has petitioned the government, the Ministry of Agriculture and Environment, relevant ministries, and local authorities to prioritize the development of domestic cashew growing areas to boost Vietnamese cashew production. This would help the industry become more self-reliant in raw materials.

In recent years, the area dedicated to cashew cultivation in Viet Nam has declined significantly due to competition from other crops. Therefore, policies are needed to restore and expand cashew planting areas in traditional regions. Concurrently, research and development must be intensified to create new, high-yield cashew varieties to replace the existing ones.

Another issue is that most of the current cashew acreage consists of aging trees. VINACAS therefore hopes the Ministry of Agriculture and Environment will implement a cashew replanting program, similar to the coffee replanting initiative, to improve the productivity, output, and quality of Vietnamese cashews.

Mr. Vu Thai Son suggests that to adapt to the policies that raw cashew exporting countries have, are, and will be implementing to restrict raw cashew exports and promote kernel processing, large Vietnamese cashew companies must be bold in investing in and building cashew processing factories in Africa and Cambodia. Long Son Corporation currently operates one factory in Ivory Coast and is processing the necessary paperwork to build a second.

Additionally, emphasizing the processing of value-added products will help enterprises increase economic efficiency and achieve a better market position. In Viet Nam, several companies, including Olam, Dan D Pak, and Long Son, are currently ramping up investment in deep processing and the export of value-added cashew products.