Vietnamese cashew growers are setting up shop in Laos and Cambodia as the industry works to improve its image and earn a fairer share of the global profit pie.
In a ceremony at the Golden Cashew Festival in Binh Phuoc Province last week, Vietnamese Deputy Prime Minister Truong Vinh Trong handed two cashew seedlings as symbols to his Laotian and Cambodian counterparts.
The seedlings represented 200,000 high-yielded gift from the Vietnamese government to their foreign counterparts as the country's cashew businesses begin renting land to grow Vietnamese cashews next door.
Chairman of the Vietnam Cashew Association Nguyen Thai Hoc said the plantations would produce a large volume for processing at factories in Vietnam, the world's largest exporter of the nut, so that the country can replace its raw imports.
The chairman refused to release the size of the land rented, but he said the land had been chosen because the soil in the sections of Laos and Cambodia that border
Southeast Vietnam was perfect for cashews.
As the world's top cashew exporters, earning US$850 million last year compared to $920 million in 2008, Vietnamese cashew businesses imported over 50 percent of their materials from Cambodia, Indonesia and African countries.
The country targets $1 billion in cashew exports this year, said the association. It said Vietnam's cashew exports accounted for 37 percent of the world market.
Imported materials failed to match the quality of those grown at home, said the chairman, who added that the fact had worsened export output.
Vietnam plans to downsize its plantations in a move to focus on quality and capacity, according to the Ministry of Agriculture and Rural Development.
Deputy Chairman of Binh Phuoc Province's People Committee Tran Van Thach said his area's local cashew plantations would be reduced to an area of 130-140 hectares by 2020 from 162 hectares currently occupied in the province, the country's major cashew growing locality.
Thach said the province was the Vietnamese cashew capital as 20-25 percent of its GDP was produced by cashew trees. He said local authorities would give financial and technical support to farmers who improve their crops and yields.
Ranjeet Wallia, founder of Canada-based Chi Commodities Handlers, said Vietnam should focus on improving its processing capabilities to strengthen its image. As a major buyer of Vietnamese cashews, Chi grew 40 percent every year.
Jack Mariani, chairman of International Nut and Dried Fruit Council Foundation, said Vietnamese exporters needed to integrate deeper into the international market by joining relative associations to gain experiences and technology.
Alliance struggles for equality
Cashew businesses in Vietnam, India, Brazil, Cambodia and Laos have already agreed to establish an international alliance, the first in the world.
Hoc said the alliance would gather farmers, producers, processors and exporters from underdeveloped and developing countries around the globe to share information, technology and markets.
The alliance would be founded later this year after the businesses met in Beijing this May, according to Hoc.
Nguyen Duc Thanh, general director of Tan An Foods Processing Export, said he hoped the alliance would "deliver a strong message from exporters like us to buyers and roasters: we should be treated more fairly," Thanh told Thanh Nien Weekly.
Thanh said Vietnamese farmers and processors or exporters in general had been mistreated by the global cashew industry supply chain where they earned only a small piece of the pie despite huge contributions to the world's cashew market.
According to Thanh, Vietnamese farmers and exporters shared less than 30 percent of global cashew profits while buyers and roasters did less work and owned the rest.
"This is an unfair practice as we are the main contributors," said chairman of Binh Phuoc Province's Cashew Association Nguyen Van Thoa, who added that roasters and buyers should respect local farmers and producers.