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Developing cashew nut processing industry in Vietnam.

Updated: Oct 3, 2023

Vietnam is currently one of the countries exporting cashew nut to Canada, the US, Japan, the EU, China, and Singapore with the highest turnover in the world.


Cashew Nut is the top product export market in Vietnam

Cashew Nut is the top product export market in Vietnam


How does the cashew processing industry in Vietnam work?


Cashew nuts are grown in tropical countries such as India, Vietnam, the Ivory Coast, and Sri Lanka. The trees belong to the same family as poison ivy and, like poison ivy, contain a toxin called urushiol. It can be found in the plant itself as well as the brown oil inside the shell of a nut.


Cashews are grown in tropical countries such as India, Vietnam, the Ivory Coast, and Sri Lanka.

Cashews are grown in tropical countries such as India, Vietnam, the Ivory Coast, and Sri Lanka.


Vietnam's cashew nut processing industry has witnessed dramatic growth in recent years, positioning the country as one of the world's major exporters of cashew nuts. The entire country currently has around 300,000 hectares of cashew, concentrated in southern provinces such as Ba Ria, Vung Tau, Dong Nai, and Binh Phuoc; central provinces such as Phu Yen and Binh Dinh; and Dak Lak in the Central Highlands.

Vietnam has been an appealing destination for investors and entrepreneurs wishing to start or grow cashew nut processing companies due to its good environment and ample raw materials.


Ideal factor driving Vietnam's cashew nut processing growth.


In recent years, Vietnam's export of nuts has made impressive progress, especially cashew nuts. Vietnam has experienced strong export growth in recent years, gaining market share from its main competitors, India and Brazil. Vietnam is improving the level of processing, so it has strongly switched from being a producer of raw nuts to an exporter of processed cashews. The remarkable growth in the cashew nut processing industry in Vietnam is driven by a number of key factors.


Businesses focus on promoting cashew nut exports thanks to market advantages

Businesses focus on promoting cashew nut exports thanks to market advantages


  • Favorable geographical and climatic conditions: Vietnam has a very favorable tropical climate, with ample rainfall, high temperatures and suitable agricultural conditions, that makes a benefit from an abundance for cashew cultivation.

  • Technological advancements: However, growing cashews can be difficult since pests and illnesses can reduce crop production. As a result, in order to increase their yields and guarantee the sustainability of cashew production in the nation, farmers in Vietnam have been forced to adopt new technology and farming techniques. Vietnam was one of the first nations to invest in automation, making it a vital location for cashew processing. The largest cashew exporter in the world right now is Vietnam. More than 108,000 tons of cashews were exported from the nation in just the first three months of 2021.

  • Growing demand in international markets: Vietnam surpassed India to become the world's largest cashew nut exporter in 2006. Until now, Vietnamese cashew nuts are in high demand in international markets, especially in the United States, the European Union, and China due to the increasing demand for healthy snacks.

  • Government Support and Policies: The Vietnamese government has been proactive in supporting the cashew nut industry, providing incentives to cashew producers and processors. The government's policies has implemented policies and initiatives to encourage investments, provide financial incentives, aim to increase the value of cashew exports and create jobs for local people

Challenges the cashew nut processing industry is facing.


Besides, the cashew nut industry in Vietnam is still facing numerous challenges that are hindering its growth and development.


Cashews are sold a lot in an American supermarket.

Cashews are sold a lot in an American supermarket.


Competition from other countries:

Other cashew nut producing countries, including India, Brazil, and African countries that compete fiercely with Vietnam, have an advantage over their competitors due to reduced labor costs, higher production productivity, and an existing distribution network. Therefore, Vietnam must continue to innovate, improve efficiency, and differentiate its products in the international market if it is to remain competitive.


Quality control and food safety

Ensuring the quality of cashew products can be challenging, especially for small-scale processors. As a result, there may be variances in product quality, which could harm Vietnamese cashew exports' standing abroad.


Environmental challenges:

Deforestation, soil erosion, and water pollution are some of the detrimental effects that cashew production may have on the environment. These environmental issues may have an impact on the industry's long-term viability and its capacity to satisfy the rising demand for cashew-based products.


Trade Barriers and Regulations:

Cashew nut exporters may encounter difficulties as a result of trade restrictions and strict rules put in place by importing nations. To increase market access, it is essential to fortify trade ties, take part in international trade agreements, and collaborate closely with importing nations to resolve trade restrictions.


Challenges the cashew nut processing industry is facing
Challenges the cashew nut processing industry is facing
Due to the complicated effects of the COVID-19 epidemic, the situation of cashew nut production and transportation has been tightened. The shortage of container freight lasted until the end of 2022. Besides, the appearance of organic cashew retail brands in France is increasing. France is the the-third-largest cashew nut import market in the EU, with an average import growth rate of 7.7 years for the period 2015–202020.
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