As Vietnam’s cashew industry enters the 2026 procurement season, strains are emerging across its billion-dollar supply chain, weighing on both exporters and farmers.
Businesses are increasingly forced to import raw cashews at higher prices, while growers in key regions continue to face unstable incomes. The industry must not only maintain its global lead in processing and exporting kernels but also improve livelihoods at farm level.
According to the Vietnam Cashew Association, the country accounts for up to 80 per cent of global cashew kernel exports and is the world’s largest importer of raw cashews. Last year, imports exceeded 3.12 million tonnes, valued at more than USD 4.67 billion (VND 116.75 trillion), underscoring heavy reliance on external supply.
This dependence is becoming a bottleneck as global markets grow more volatile. Most imports come from African countries, where policies increasingly aim to retain raw materials for domestic processing. Export bans, minimum pricing rules, and higher taxes have made sourcing more difficult and costly.
Geopolitical tensions, including conflicts in the Middle East, have further disrupted supply chains, pushing up logistics and fuel costs. At the same time, demand in major markets such as the US, Europe and the Middle East is weakening amid economic uncertainty.
Despite this, the industry is targeting exports of around 800,000 tonnes of cashew kernels worth USD 5 billion (VND 125 trillion) this year, an ambitious goal as input costs rise faster than output prices.
Competition among companies to secure early-season supplies has driven prices higher. Cao Thuc Uy, director of Cao Phat Company Limited, said the main risk lies not in supply shortages but in market sentiment.
Global raw cashew supply remains relatively stable at around 5 million tonnes, supported by expanding production in Africa and Cambodia. However, fears of scarcity have triggered premature buying, inflating prices.
Phung Van Sam, CEO of Vietnam Hanfimex Group Joint Stock Company, said market anxiety, driven by limited reliable data, has distorted purchasing behaviour. Nguyen Minh Hoa, vice chairman of Vinacas, added that better coordination and transparency could help stabilise prices and protect the sector.
The association has urged firms to invest in deep processing and higher value-added products to diversify markets and strengthen Vietnam’s position in the global value chain.
At the farm level, domestic raw material production remains underdeveloped. A Vinacas survey in Dong Nai found ageing plantations and erratic weather have sharply reduced yields.
In Long Ha Commune, prolonged heat followed by unseasonal rains during flowering caused crop losses of about 30 per cent. In Phu Nghia Commune, some farms reported fruit set rates of only 20 per cent.
Rising production costs are adding pressure. Farmers say older varieties require intensive care to achieve yields of around 2 tonnes per hectare, leaving slim and weather-dependent profits.
Improving varieties and farming techniques is seen as a long-term solution. A new high-yield variety, BP-102, developed through grafting, is being introduced in Dong Nai and shows greater resilience to adverse conditions.
However, replanting remains slow as farmers shift to more profitable crops such as coffee, pepper and durian, while others lack capital and fear risks.
In the long term, expanding domestic raw material areas is key to reducing import dependence. This will require stronger government support in planning cultivation zones and providing effective agricultural extension services.
If productivity and quality improve, cashew farming could evolve from a subsistence activity into a sustainable driver of rural economic growth.