Market Whirlwind Hits Farmers and Speculators
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Many normally well-off farming households and small agricultural speculators are being swept into an unpredictable market storm. At the close of the pepper harvest, pepper stocks are depleted while the new coffee crop is just starting, leaving those still holding raw cashew increasingly uneasy.
Cashew Prices Flat Despite Earlier Optimism
Earlier predictions pointed to a rise in export prices for processed cashew kernels toward year-end. Yet for over two months raw cashew prices have remained flat, even showing signs of softening. Meanwhile, high interest rates continue to weigh heavily on farmers and traders who borrowed to hold stock.
Coffee’s Upward Trend Diverts Capital
Unlike previous seasons, coffee prices are climbing strongly early in the harvest. Speculators who have not yet sold their cashew stocks fear missing out on coffee’s profit potential.
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On December 7, in Dong Nai and Ba Ria–Vung Tau, significant volumes of raw cashew were sold under 30,000 VND/kg as holders dumped stock to free up capital.
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One trader admitted buying only because the sellers were long-time suppliers, while the company avoided importing new cashew since warehouse reserves remain.
Processors Avoid Large Reserves
Cashew processors now purchase only what is needed for immediate processing due to the very high cost of borrowed capital. Imported raw cashew is cheaper and less volatile, making it more attractive.
“Speculators have been holding cashew stocks on behalf of processors,” a major dealer explained. “And imported raw cashew is cheaper and more stable.”
As a result, many speculators and farmers accept losses and sell, shifting funds toward new-season coffee.
Coffee Becomes the Priority
Traders confirm they are now focused on buying new-season coffee to meet numerous export orders. Companies and processing plants have stopped purchasing raw cashew, citing:
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Abundant imported supply at low prices
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Current inventory not yet processed
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No urgency to stockpile
“Import prices are currently very low—if it’s cheap, we’ll buy for storage later, but for now there’s no demand,” one trader noted.
Concerns Over Payment Delays
A large agent in Dong Nai warned that some companies buy stock but delay payment, using their cash to buy coffee instead. This raises worries that by the time payment arrives, the coffee opportunity may be gone.
Why Processors Are Not Stockpiling
According to traders, processors see no reason to borrow at high interest to build reserves:
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Plenty of raw cashew remains with farmers and dealers.
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Many holders are eager to sell quickly, even at a discount.
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Factories can buy exactly when needed, without fear of shortage.
As coffee prices surge, the cashew market is under pressure. Farmers and small speculators are liquidating raw cashew stocks, often at a loss, to redirect capital into coffee. Processors, meanwhile, are avoiding high-interest borrowing and relying on ample raw cashew supplies to purchase only when production demands arise.