Vietnam cuts cashew export target despite strong first quarter

According to the Vietnam Cashew Association (Vinacas), Vietnam exported 139,865 tonnes of cashew kernels in the first three months of 2026, up 11.8 per cent year-on-year.

Export revenue reached USD 953.5 million, an increase of 10.9 per cent, while the average export price stood at USD 6,802 per tonne, down slightly by 1 per cent compared with the same period last year.

The United States remained Vietnam’s largest export market, with shipment volume and export value rising 29.7 per cent and 30.3 per cent respectively.

Exports to China declined due to seasonal factors and the Lunar New Year holiday period, while Singapore continued strengthening its role as a regional transit hub in March.

Vinacas warned that the Middle East, Vietnam’s third-largest cashew market in 2025, has been heavily affected by geopolitical tensions.

The association said cashew exports to the region fell by 50 per cent in March after military attacks involving Israel, the United States and Iran. By April, escalating conflict had almost completely disrupted exports to the region.

At the same time, Vietnam sharply increased imports of raw cashew nuts for processing amid concerns over future supply shortages.

The country imported more than 810,000 tonnes of raw cashews in the first quarter, up 35.9 per cent year-on-year, with a total value exceeding USD 1.31 billion.

Imports in March alone rose more than 44 per cent from a year earlier.

Cambodia remained Vietnam’s largest supplier of raw cashew nuts, while Ivory Coast recorded strong growth in both export volume and value to Vietnam.

Bach Khanh Nhut, standing vice-chairman of Vinacas, said first-quarter data did not fully reflect the outlook for the entire year because it coincided with the industry’s peak raw material purchasing season.

However, he said recent developments had demonstrated the immediate impact of Middle East conflict on the sector’s import-export activities.

One of the industry’s biggest challenges is that imported raw cashew prices remain high while export prices for processed kernels have softened, significantly increasing production costs and squeezing profit margins.

Against that backdrop, Vinacas lowered its 2026 export target to USD 5 billion, below the more than USD 5.43 billion achieved in 2025.

The association said the revised target better reflected current market conditions and could be adjusted further depending on future developments.

The industry is also facing mounting logistics pressure as instability in the Middle East and disruptions along the Red Sea-Suez shipping route keep freight costs elevated and create risks of further increases.

Higher interest rates and tighter access to credit during the first four months of the year have also placed significant pressure on company cash flows, particularly during the raw material purchasing season.

Meanwhile, stricter regulations related to environmental standards, sustainability, food safety and product traceability in the European Union and China are increasing compliance costs for Vietnamese cashew processors.

Vinacas has called on the State Bank of Vietnam and commercial lenders to continue implementing credit support policies, including debt rescheduling, loan restructuring and specialised financing packages for cashew processing businesses.

The association also urged government agencies to work with shipping companies to stabilise freight rates, prioritise export capacity for agricultural goods and identify alternative transport routes bypassing conflict zones.

Over the longer term, the industry said Vietnam should accelerate free trade agreements with African nations to create a more stable business environment for raw material imports.

Vinacas also proposed preferential credit policies to help companies invest in deep-processing technology, increase added value per tonne of cashew kernels and support domestic replanting programmes to reduce dependence on imported raw cashews.