Trade Agreements – Boosting the trade potential between Vietnam and Europe for cashew nuts


EU is an important market for Vietnamese cashew nuts. Cashew exports to this region are having opportunities to increase thanks to the EVFTA. As a result, in this article, Vihaba will give you useful information about potential trade agreements between Vietnam and Europe with cashew products.

The EU-Vietnam Free Trade Agreement (EVFTA)

                            The EU-Vietnam Free Trade Agreement

The EU-Vietnam Free Trade Agreement (EVFTA) was officially signed in Hanoi on June 30, 2019. The agreement provides a cooperation framework between the two nations, helping to simplify customs regulations, eliminate or reduce import tariffs, build mechanisms and boost trade. The agreement has welcomed technical support from the EU for Vietnam in sanitary and phytosanitary measures, including food safety issues. Also, once the deal becomes effective, likely to be ratified in 2020, trading of major Vietnamese commodities such as nuts, coffee, tea, and seafood will improve.

The EVFTA officially became effective from August 2020, it facilitated the entry of Vietnamese agricultural products to the EU market. The EU was especially committed to protecting 39 Vietnamese geographical indications related to well-known agricultural and food products with high export potential, including Moc Chau tea, Buon Ma Thuot coffee, Binh Thuan dragon fruit, and Binh Phuoc cashew nut.

The EU-Vietnam Investment Protection Agreement (EVIPA)

Along with the EVFTA, the EU-Vietnam Investment Protection Agreement (EVIPA) is expected to contribute to the attraction of investment capital. The access to new, advanced, modern, and clean production and quality management processes from the EU. By capturing this large market, it will help to expand the cashew industry and the Vietnam cashew brand will reach further. It can be considered as a factor to help increase the volume and value of cashew.

The positive impact of trade agreements on Vietnam’s cashew industry

                                       Vietnamese cashew market

Under the EU- Vietnam trade agreement (EVFTA), which took effect on August 1st, 2020, the tariff on processed products from cashew kernels imported into the EU from Vietnam reduces to 0%. This reduction is very important because tariffs ranged from 7% to 12% previously. A noteworthy detail under the EVFTA is the rules of origin which stipulates that cashew kernels exported from Vietnam must originate from the country.

Some businesses had come to Vietnam early, looking for opportunities to invest or establish a joint venture to open cashew processing factories and export processed cashew nuts to Europe to wait in front of the EVFTA. The advantages of advanced technology and technique of EU enterprises are the opportunity for Vietnamese cashew enterprises to boldly approach and buy advanced cashew processing technological systems and equipment at cheaper prices but of higher quality. 

Exports of Vietnamese cashew nuts in 2021 are forecasted to be fruitful in the EU market, especially with processed products. In the long term, the European market for cashew nuts is expected to show stable growth. This growth is likely to be driven by changes in the consumption patterns of European consumers.

The negative impact of trade agreements on Vietnam’s cashew industry

However, the EVFTA also creates competitive pressure, especially for domestic small and medium-sized enterprises. This is a challenge for many enterprises that cannot invest in processing facilities that conform to European standards and compete fairly with foreign enterprises. The Vinacas said that there are more than 3,000 cashew processing facilities across the country, of which, there are up to 1,400 cashew processing facilities in Binh Phuoc Province alone.  

Currently, there were many domestic cashew processing enterprises, of which, a few dozen enterprises had a turnover of over $30 million per year; the rest was mostly small to micro-enterprises, with annual sales of a few hundreds of thousands of US dollars. It can be said that this is a huge pressure on the competition when deploying sales strategies and product strategies of each enterprise, as well as the whole industry. If these enterprises do not restructure, invest, and operate professionally, and work their way up themselves, they will face many difficulties or even be eliminated.

                                   Cashews are sold on the market

Forecast of Vietnam’s cashew exports to the European market

According to the Industry and Trade Information Center of the Ministry of Industry and Trade, 2021 can be a competitive year for exports of raw cashew nuts and cashew kernels. The shortage of raw cashew nuts brings a great opportunity for traders.

As for cashew kernels, it is noticeable that the demand is stagnant due to the large inventory of cashew kernels in the US and EU as a result of high imports in 2020 when the price of cashew kernels dropped. Moreover, this market has been affected by the third wave of the Covid-19 pandemic in recent months. Cashew kernel price in the world is expected to increase because of the short supply of cashew nuts in Vietnam – the world’s largest exporter of cashew nuts.

The EU-Vietnam Free Trade Agreements (EVFTA) has been known as an opportunity for Vietnamese cashew nuts to export directly to the EU market. With such good results, concerns over the impacts of the Covid-19 pandemic on the cashew industry have changed swiftly from pessimism to optimism. Along with those opportunities, our company – Vihaba is also promoting the supply of quality cashew products to the European market as well as to international customers. Vihaba is committed to giving our customers the best standard cashew nuts with a variety of types.  

                                            “Vihaba – Be your real partner”

If you are looking for good quality cashew nuts from Vietnam, visit our store on Alibaba:

Leave a Reply

Your email address will not be published. Required fields are marked *