Cambodia exported about $1.83 billion worth of cashew nuts to Vietnam in the first eight months of 2021, up by around 610 per cent, according to the official Vietnam News Agency on September 27.
Khan Kosal, owner of a cashew nut processing business in Preah Vihear province, noted that Cambodia lacks direct export routes to countries with large market potential, and relies on Vietnam and Thailand as intermediaries for processing and re-export to other countries.
He told The Post that higher production costs than in neighbouring countries makes it tough to compete, posing a challenge for direct exports.
The Vietnamese cashew nut sector, on the other hand, is years ahead of Cambodia’s in terms of experience, and boasts many trading partners around the world, he said, adding that Covid has only made it more difficult for cashew nut processing businesses to find potential export partners.
“We have been largely unable to enter into agreements on direct cashew nut exports, we need time to build infrastructure in the sector to support sales abroad,” he said.
With a whopping annual production capacity of between 450,000 and one million tonnes and ever-growing area under cashew nut cultivation, Cambodia is poised to unlock a great deal of economic potential, ramping up processing, and ultimately exports to play in the same league as Vietnam, he underscored.
“We’d be able to process domestically and offer competitive rates. I think we still have a shot at direct shipments to international markets, but the problem lies in exactly how we go about cutting production costs and maintaining the competitive rates needed to bolster exports,” Kosal said.
Cambodia Chamber of Commerce vice-president Lim Heng recently noted that the Kingdom primarily exports agricultural products to Vietnam such as paddy rice, rubber, sesame, corn, cashew nuts and Faboideae legumes, and imports steel, oil, fruits, vegetables and fertilisers.
“Cambodian agricultural products, were it not for the markets of neighbouring countries, would saturate the domestic market,” he said.
Cambodia exported 876,521.19 tonnes of cashew nuts in January-August, up by 340.61 per cent year-on-year, according to the Ministry of Agriculture, Forestry and Fisheries.
Vietnam topped the list of buyers over the period at 869,540 tonnes, followed by China (3,639.50 tonnes) and Thailand (3,230.40 tonnes). The ministry listed other notable importers as South Korea, Japan, India, Arab, Bangladesh, Laos, Togo and the UAE.
In January-July, Cambodia-Vietnam trade reached $6.034 billion, increasing by 106 per cent year-on-year, according to the Vietnamese embassy in Phnom Penh.
Cambodian exports to Vietnam accounted for $3.2661 billion, rising 452 per cent year-on-year, and imports were valued at $2.773 billion, up by 18.3 per cent year-on-year.
These figures indicate that a $1.75 billion trade deficit in January-July 2020 was turned into a more than $490 million trade surplus in the same period this year.