Nuts

Cashews: high freight costs raise some doubts

July 29, 2021 8:50 AM, Der AUDITOR
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HANOI. The container shortage has driven up freight charges massively in recent months. In Vietnam, there are now initial doubts whether price increases to this extent are justified.

Producers and exporters are the ones suffering

Although Vietnam's cashew exports have shown impressive year-on-year growth in the first six months of 2021, some companies are taking losses to keep operations going. The problem is the massively high freight costs, which have increased five to ten times year-on-year for shipments to Europe and the US. The shipping lines explain this primarily with the lack of containers, as there are hardly any empty containers available in the right places; according to the Vietnam Cashew Association (Vinacas), however, voices are now being raised that do not want to accept this reason.

According to the Vietnam Maritime Administration of the Ministry of Transport, around 23% more containers passed through South Vietnamese ports in the period January-May 2021 than in the corresponding period in 2020, so there should also be sufficient empty containers available. As oil prices, which are the biggest cost factor for shipping companies, are also relatively low at present, the question arises as to whether freight costs can be justified at the high level they have now reached. Fact is, however, that this is a global problem that has been causing headaches for exporters of all products for months.

Encouraging export figures

Market players have positive things to report about the effects of the UK-Vietnam Free Trade Agreement (UKVFTA), which came into force at the beginning of the year. Since then, many Vietnamese agricultural products can be imported into the UK free of import duties, which is reflected in very good export figures. In 2020, Vietnam shipped 16,000 mt of cashew kernels worth more than USD 92 million to the UK, and in 2021 the export volume could increase further. On 15 July, the Vietnam Trade Office had organised a seminar for Vietnamese exporters focusing on trade relations with the UK. Another conference on agricultural trade is currently being prepared by the British Trade Office for 28 September.

Cashew prices on the European spot market are currently holding at a stable level and are only subject to nominal fluctuations. Large cashew pieces from Vietnam are currently traded at EUR 3.70/kg FCA Spain.

Cashew nuts, Vietnam

Type

EUR/kg

Roasted and salted

7.10

White Splits

5.05

Large pieces

3.70

WW320

6.90

WW240

7.45

FCA Spain

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