At 16:00 MAy 12th, VN time, African Cashew Alliance (ACA) organized an online seminar on cashew market activity during the Covid19 pandemic.
In the main producing countries, India is slightly affected by the Covid compared to many countries around the world, but strict lockdown policies for nearly 2 months have caused both the economy in general and the processing industrys in particular were severely damaged. Cashew factories in India have almost stopped operations, most workers have returned to their hometowns, factory equipments and machinery have been blocked for a long time with little maintenance. More than 15,000 tons of cashew kernels, which are stored in processing line on everywhere in country, cannot be marketed, resulting in quality problems due to poor storage.
On the raw cashew side, due to the bad weather, India's raw cashew output declined by 17% compared to the forecast. Along with the curfew order issued coinciding with the harvest time should result in the harvest being affected, the falled nuts is not harvested and stored promptly so it is also significantly damaged. After the lockdown have been mitigated and issued by Prime Minister Modi but the inconsistencies in the state's execution led to a slow restart of operations of the cashew plants. The restart also faces difficulties due to lack of capital, raw materials and the lack of workers and markets. In addition, the operation of the factory with only 30-50% of capacity also led to the increase in production costs and product costs. This also makes the product less attractive especially in the economy that is suffering from Pandemic
India demand in 2020 - Jim Fitzpatrick (ACA)
Meanwhile, thanks to the strict and effective epidemic control policy of the Vietnamese government, almost Vietnam's economy is not significantly affected. Cashew factories still operate normally even during the peak of lockdown. The good crop in Vietnam and Cambodia with the timely purchase and storage by factories, so the quality is guaranteed. Import and export activities of Vietnam increased, especially cashew nut exports increased sharply in Febuary, March and April compared to the same period in 2018 and 2019.
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Viet Nam export from Jan to April - Jim Fitzpatrick (ACA)
Meanwhile, on the main consumption countries such as the US and EU and China, we also see a significant increase in the number of imports compared to 2019.
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kernel import volume - Jim Fitzpatrick (ACA)
Regarding the US market, we see a huge increase in import volume compared to the same period in 2018, 2019 (+ 18.58%).
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US import volume - Jim Fitzpatrick (ACA)
Thus, despite the epidemic destroying the economy, but the demand for cashew nuts still grows strongly and well? According to analysic of some experts in the industry, the US import volume in the months of 3,4,5 did not reflect the demand for buying and consuming of the US because most of these contracts were signed and exported before the pandemic appeared in US. In order to more clearly reflect US needs, we have to wait and see Vietnam's export volume in the months of 6,7 (the time when US activities stopped due to the blockade of epidemic).
Similar to the US, the European market also witnessed a slight growth with the import of cashew kernel into this market increased by + 5.48% compared to the years 2018,2019.
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EU import volume - Jim Fitzpatrick (ACA)
The impact of the epidemic on each European country is different depending on the disease control effectiveness of each country. Most countries in southern Europe are heavily affected by epidemic such as Spain and Italy, with high rates of infection and death. Meanwhile, countries in northern Europe and western Europe suffered less. However, it is too early to conclude the impact of the disease in each country.
Similar to the US, cashew imports in Europe in April, May and May also belong to contracts signed and exported before the outbreak of the pandemic in this region. However, due to the influence and blockade level of different countries, there are still countries with normal economic activities (such as the Netherlands is the largest market in Europe), so the consumption capacity is still developing. more hope than the rest of the region
Unlike the US and the EU, cashew kernel exports to the Chinese market have decreased significantly compared to previous years.
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exported to China Jan to April 2020 - Vinacas
Unlike the US and Europe, China is close to Vietnam, so when an epidemic occurred and heavily affected China, immediately the trading activities between the two countries were stopped, which led to Vietnam's export of cashew kernels to China was stopped in February, at a time when the epidemic was the worst in China.
Perhaps the Chinese market is a model for us to see that the recovery of kernel demand in other countries after the pandemic. In February, after China had control of the pandemic. Kernel demand began to recover but the recovery capacity was still slow and low compared to 2019. It can be seen that the psychology and habits of consumers. After the epidemic changes, people tend to save more and limit spending on non-essential needs than before. However, due to the different cultures between Asians and the Western, it is also possible that the market recovery of the West will be different.
A major but isolated market of kernels that we need to consider here is India. Because the Indian market is typically self-produced and self-consumed, it is difficult for us to grasp the exact demand. However, based on some information sharing on the experts, the Indian consumer market has also recovered slightly but the possibility of strong consumption will be unlikely. Besides, the demand for weak tanks also contributed to the gloomy picture. (CONTINUE ..)
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