The T&T Group, a Vietnamese industrial, real estate and finance conglomerate, has signed a contract to purchase 176,000 tonnes of Tanzanian raw cashews from the 2018 season with Tanzania's Cereals and Other Produce Board.
This is the largest raw cashew purchase contract in the history of the global cashew industry, bringing a wealth of cashew nuts to the Vietnamese cashew industry.
This contract will affect Tanzania's export revenue as well as most cashew importers globally.
It is expected that the first raw cashew shipments from Tanzania to Viet Nam will occur in September.
As a country that imports raw cashews and is the largest exporter of cashew nuts in the world, Viet Nam plays a coordinating role as a bridge to build a global value chain for the cashew industry among countries that provide raw cashews such as the Ivory Coast, Nigeria, Mozambique and Benin.
Viet Nam produces and imports about 1.6 million tonnes of raw cashews per year, of which domestic supply only meets nearly 25 per cent of the total, causing severe raw material shortages for Vietnamese cashew businesses, according to recent market data. The majority of raw cashews still depends on imports from African countries.
The contract with Tanzania not only brings a plentiful source of raw cashews for the domestic cashew industry but also reinforces the position of Viet Nam as a raw cashew importer and the largest cashew nut exporter in the world, accounting for 60 per cent of global production, according to the Vietnam Cashew Association (Vinacas).
Prior to this, on March 20, the T&T Group officially signed the first contract on the purchase of 50,000 tonnes of raw cashew with a group of cashew exporters from the Ivory Coast and the Ivory Coast's Cotton and Cashew Council (CCA).
T&T Group will this year purchase at least 200,000 tonnes of raw cashews from the Ivory Coast. Output will increase gradually over the years, reaching 300,000 tonnes by 2020, and after 2020 to 400,000 tonnes.
As of August this year, the T&T Group has supplied Viet Nam with 20,000 tonnes of raw cashews from the Ivory Coast and 24,000 tonnes of raw cashews from Guinea Bissau.
The combined 176,000 tonnes of raw cashews from Tanzania will increase T&T’s total supply to 220,000 tonnes, estimated to account for 15 per cent of Viet Nam’s raw cashew imports, which are mainly imported from Africa. — VNS