In late July, Vietnam’s multi-industry company T&T Group has inked a deal with Tanzania’s Grain and Other Products Association to obtain 176,000 tonnes out of 210,000 tonnes of raw cashews from the 2018 harvest, which were brought from farmers for reserve purposes.
Previously, Tanzanian had made numerous attempts to find buyers for its stockpile of cashew nuts in India, Singapore, China and Kenya, but failed to agree on a price. T&T Group has succeeded with the transaction, with the first shipments projected to arrive in Vietnam in September.
This deal has marked the largest of its kind worldwide, affecting not only Tanzania’s takings from export of cashew nuts but also importers around the globe.
In the first seven months of 2019, Vietnam has shipped 240,000 tonnes of cashews overseas, with an export turnover worth of about $1.8 billion. As the price of the nut was on the wane at the time, the average price of over $7,500 per tonne was not too ideal for local exporters.
Thanks to the historic deal, coupled with the escalating trade tensions between the US and China, the price of cashew kernels has picked up its momentum lately. Exports of the nut to the Chinese market in the past few months, in particular, have increased by 50 per cent on-year, according to local statistics. This promising prospect has resulted from the fact that China has switched its import of almonds from the US to importing cashew nuts from Vietnam.
For years, Vietnam has been importing raw cashew nuts and re-exporting them to other markets. The sector has depended largely on the international cashew suppliers, in terms of both prices and volumes, which subsequently affecting its production and delivery of the final products to third markets.
Given the upcoming shipments of cashew nuts from Tanzania, local cashew exporters could partly be guaranteed with the sufficient supply. In addition, the price of raw cashews is expected to advance in the coming time as demand has been seen to swell.
A representative of T&T Group said that once it receives the first shipment, the company will conduct a market review and monitor the supply of raw cashew nuts to the market, in a bid to promote local cashew processing firms.
T&T Group has also committed that it will not oversupply the market to protect the price of the nuts for local exporters.
The group is forecast to become one of the major cashew importers in Vietnam, which accounts for 15 per cent of the total nuts imported in the country.