The global popularity of cashew nuts has been growing faster than any other tree nut. Demand jumped 53 percent since 2010, industry data shows. Now the worst drought in a century for Vietnam, the largest exporter, is raising concern that supplies will be even tighter in a market valued at $5.2 billion.
A lack of rain in the once-fertile Mekong Delta and elsewhere in Vietnam, has cut output of its major agricultural exports including rice, black pepper, coffee and seafood. This year’s cashew harvest fell 11 percent, and domestic prices jumped by as much as a third to an all-time high, a growers’ group estimates. That spells trouble for buyers in the U.S., by far the biggest importer.
"There’s been no year like this year,” Nguyen Duc Thanh, chairman of the Vietnam Cashew Association , said during an interview in Ho Chi Minh City. Prices probably will remain high until the next harvest arrives early next year, said Thanh, who has been in the industry for three decades.
While peanuts, which grow underground, are by far the most popular in the nut world, cashews have overtaken walnuts and pistachios in recent years to trail only almonds in the $30 billion market for tree nuts, International Nut and Dried Fruit Council data shows. Global cashew consumption in 2014, the most-recent data available, reached a record 716,682 metric tons, up from 469,241 tons in 2010, council data showed.
Rising demand, including from China and parts of Europe, helped spark a 70 percent jump in exports over a decade, to 503,713 tons in 2014. A quarter of all shipments end up in the U.S., to be eaten as a snack or used to make foods like protein bars and cashew milk. India accounts for almost a third of global consumption and is the second-largest exporter. Ivory Coast ranks No. 2 in production, followed by Vietnam.
Cashew trees usually are grown commercially in places where they can get a lot of rain and warm weather year round, like in southeast Vietnam. But over the past year, an unusual dry spell has left 2 million people in the country with acute water shortages and 18 of 63 provinces were in a state of emergency as of May, according to the United Nations Food & Agriculture Organization. Losses in agriculture, a major source of export revenue, may prevent the economy from reaching the government’s growth target this year.
