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New US Standard to Hurt Vietnam Cashew Exporters
19 | 08 | 2007
The new set of US quality standards on cashew imports, much stricter than current standards, will cut Vietnamese cashew exporters’ profit, said Vietnam Cashew Association’s commercial promotion board head Vu Thai Son.
The new standards, to be issued this year by the US Association of Food Industries (AFI), will allow only 0.01 per cent of impurities, not the current 0.05 per cent. Cashew kernels must be separated. Even insect mites, grits or hair are not allowed, he said.
 
Vinacas said the tough new standards are also likely to be adopted by European nations, which will be disastrous for poorly equipped Vietnamese farmers.
 
US and EU markets imported 41 per cent and 21 per cent of Vietnam’s cashew export volume, respectively.
 
While India, Brazil and Indonesia have applied environmentally-friendly cashew processing technologies for years, nearly 80 per cent of Vietnam’s cashew enterprises use basic technology.
 
“The sector has not upgraded its processing facilities for 15 years, and still relies on manual labor for processing raw materials, greatly influencing cashew productivity and quality,” another Vinacas official said.
 
Son said Vietnam will cooperate with other nations in asking the US to reconsider its plan.
 
According to the latest statistics from Vietnam’s General Customs Department, in the first two months this year Vietnam exported 19,000 tons of cashew nuts, earning $75 million, of which some 3,100 tons went to the US, earning $13.22 million. Cashew price averaged $4,300 a ton, up 6 per cent against late 2006.
 
Vietnam shipped around 35,000 tons of cashew nuts in the first four months of 2007, pulling in $139 million, up 3.9 per cent on year in volume and 4.3 per cent in value.
 
The country is expected to rake in $560 million from exporting 140,000 tons of cashew nuts this year, up over 11 per cent against last year.
 

Vietnam now tops the world in exporting cashew nuts, but is facing numerous challenges including low quality raw cashew, high prices and labor shortage.



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