[June 4th] Cashew processing plants face shortage as African suppliers default

Cashew processors are running out of raw materials since West African suppliers have only delivered 50% of contracted volumes this year, the Vietnam Cashew Association (Vinacas) said.

Raw cashew prices have shot up in West Africa due to poor harvests, prompting some countries in the region to temporarily halt exports to support their local processing industry, it said Friday.

Import prices have shot up from US$1,000-1,050 in February to $1,500-1,550 as of Friday.

Many West African suppliers demand higher prices, delay shipments or simply default on their contracts, according to Ta Quang Huyen, chairman and CEO of cashew importer Hoang Son I.

They signed contracts to provide 52,000 tons of raw cashew, but his firm has only received 25,000 tons at the agreed price, he said.

Around 12,000 tons are unlikely to be delivered and the remaining 15,000 tons had to be bought at higher prices, he added.

Vinacas said suppliers are hiking prices even on shipments already en route, and some processors have no choice but to buy them to secure raw materials for their contracts.

Businesses are struggling to reconcile these costs with their selling prices of processed cashew, it said.

Many shipments of raw cashew are arriving late or in smaller quantities than contracted, causing a shortage for processors, it said.

Vinacas has written to the Ivory Coast’s Association of Cashew Exporters, asking it to remind members to fulfill contracts.

Source: VN Express