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Kingdom’s cashew deal with VN could be hard to crack: insiders

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A worker picks cashew nuts in Kampong Cham province.

Kingdom’s cashew deal with VN could be hard to crack: insiders

The Kingdom’s cashew nut industry is still struggling to maintain a stable market as community representatives say relying on local brokers is hurting farmers.

Cashew Nut Association director in Kampong Thom province Chhiv Ngy said on Monday that the body is still searching for reliable buyers to ensure stable prices.

The price, he said, currently fluctuates from broker to broker and that many were buying at around $2.50 per kg.

“The current price doesn’t mean we are suffering a loss, but it we don’t make much when the price depends on local brokers. We don’t have money on hand to stock the cashew nuts,” he said.

The association has held discussions with over 30 companies this year – from China, Korea, the US, Japan, Germany and India, but hasn’t been able to ink any deals thus far.

Cambodia and Vietnam signed an agreement earlier this year to greatly expand the Kingdom’s cashew exports by 2028, though no concrete plan has emerged to meet the target.

The Ministry of Agriculture and the Vietnamese Cashew Association (Vinacas) signed a Memorandum of Understanding (MoU) to increase Cambodia’s exports to one million tonnes by 2028.

Exports stood at just 73,000 tonnes last year. Vinacas also gave the ministry a $66,000 grant to increase production.

The ministry’s director-general at the general directorate of agriculture Hean Vanhan said officials were studying farming methods in Vietnam, but planting in the Kingdom hasn’t begun as yet.

“The MoU with Vietnam is the first step in the process. The ministry is examining processing factories in order to add higher value to the product rather than exporting raw materials,” he said.

Recent data from the ministry showed that yields of raw cashews were generally one tonne per hectare in the Kingdom.

At that rate, around one million hectares of land – roughly the size of Ratanakkiri province – would need to be cultivated to meet the terms of the MoU.

Specialized Cambodian Produce factory manager Tep Lyhean who has had discussions with the cashew association, claimed it was hard to meet contract farming conditions as prices on the international market fluctuated.

Additionally, she said ensuring a quality product from farmers was difficult.

“We prefer to buy cashews directly from farmers rather than the association as the price is more affordable."

“We need to ensure the price and the quality of cashews as we have to compete on the international market, so it is hard to do contract farming,” he said.

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