Canadian consumers prioritize buying raw and processed cashews from Vietnam

Canada's demand for processed nuts has increased rapidly over the years due to the need for clean eating and eating vegetable protein sources to protect health. The Canadian market imports about 400 million USD/year of processed nut products. The growth rate of the processed nut market in the period 2018-2021 is 16%, while that of Vietnam is 51%, showing the positive effect of CPTPP, helping Vietnam to have more orders.

In the first 9 months of 2022, processed cashew nut exports to Canada continued to increase (14.8%) over the same period in 2021, reaching 24.3 million USD. In the whole year of 2022, Vietnam's processed cashew nut export turnover to Canada reached over 30 million USD.

Vietnamese cashews are a product trusted by Canadian consumers. Photo: Internet

However, the dominant feature of the Canadian processed grain market is that it is dominated by Canadian producers. Canadian producers import raw materials from other countries and process and package them, partly for domestic consumption and partly for export to the United States, the Caribbean and France.

For shelled cashew nuts, Vietnam is the country with the main and stable market share over the years, without much competition (78-79%). In 2012, Canada imported only 73 million USD worth of raw cashew nuts, this figure increased to 120 million USD in 2017 and peaked at nearly 130 million USD in 2018. In the first 9 months of 2022, Vietnam exported 68.7 million USD, however, it is forecasted that market demand will be equivalent to or even lower than that of 2021, so raw cashew nut exports to the market in 2022 will reach the equivalent of 86 million USD in the most optimistic scenario.

In addition to shelled cashews, Canada also imports a small amount of unshelled cashews from Vietnam every year. The export value of unshelled cashews in 2021 reached nearly 800,000 USD. In the first 9 months of 2022, Canada's import demand for this item increased dramatically (160% compared to the same period in 2021); to date, Canada has imported 1.38 million USD worth of unshelled cashews from Vietnam.

Statistics show that Canada imports about 17,000-18,000 tons of cashew nuts each year. The average price in 2021 reached nearly 7,000 USD/ton of kernels. This price increased sharply compared to 2020 due to high transportation costs. After processing, the average price of cashew nuts is 9,800 USD/ton, or about 10-12 USD/kg. The average price of processed cashew nuts exported from Canada is 12,000 USD/ton.

With good quality, Canadian businesses still prioritize buying raw cashews and processed cashews from Vietnam despite the higher price. Therefore, even though the local market is unstable in demand (fluctuating a lot over the years), it is forecasted that Vietnam's cashew exports to the region will be stable at around 115-120 million USD/year for both raw cashews and processed cashews. However, according to Dr. Tran Thu Quynh - Trade Counselor of Vietnam in Canada, the market has increasingly high requirements for quality and food hygiene and safety (including the rate of impurities, pests on the surface of the nuts, and product uniformity in taste and color).

In the long term, due to the increasing labor costs in Canada, it is likely that large Canadian cashew processing and packaging enterprises such as Basse and Kirkland will shift their production chain to Vietnam to process for their brands. Canada's Dan D Park Company has been at the forefront of this trend and produces entirely in Vietnam for its Dan D Park brand and the brands it processes.

Exports of processed cashew nuts to Canada continue to increase. Photo: Internet

Canadian consumers are very interested in organic products and certifications that confirm a company’s green, sustainable, and fair (gender-equal) production processes. Canadian consumers are also very interested in packaging and preservation methods (vacuum-sealed, recyclable packaging).

Dr. Tran Thu Quynh noted that before exporting goods, businesses should find a law firm to assist in drafting contracts, especially payment terms and dispute resolution, as well as in the transaction process to avoid risks. In addition, to ensure sustainable export of Vietnamese cashews to the market, Vietnamese businesses need to pay attention to building their own brands. Currently, cashews are mainly exported raw to the market and processed and packaged in Canada. In retail chains, Canadian and US brands are still the main ones. Vietnamese cashew brands entering the market are mainly in the form of specialty confectionery, sold in Asian stores./.

Cong Dao