New US tariffs squeeze Vietnam as cashew demand softens
Cashew kernels face weak demand and new US tariffs on Vietnam, while raw nut prices stay firm. Outlook mixed, with limited downside but slow demand.
Prices
Vietnamese W320 kernels were offered around USD 3.08–3.35/lb FOB, with most business concluded close to USD 3.08/lb for mainstream qualities. Higher grades saw a wider premium: W240 at USD 3.45–3.60/lb, W210 at USD 4.00–4.30/lb and W180 at USD 4.20–4.60/lb. Buyers showed notable resistance to the upper end of the offer ranges and in several cases requested a one‑month delay of contracted shipments, signalling short‑term oversupply in kernel positions.
Raw cashew offers delivered to Ho Chi Minh City were reported roughly at USD 1,500/mt for Côte d’Ivoire, USD 1,530/mt for Ghana, USD 1,520/mt for Nigeria (Ogbomosho) and about USD 1,760/mt for Guinea‑Bissau. Despite weak kernel buying interest, these RCN prices stayed firm, underpinned by limited spot trading and strong inventory holding power among cash‑rich suppliers.
Indian and Vietnamese offer lists in late July show only marginal week‑on‑week changes in EUR terms, highlighting a broadly sideways global price structure: kernels ease slightly in USD in Vietnam, but RCN and alternative origins prevent a deeper correction.
Supply & Demand
On the supply side, the immediate kernel pipeline from Vietnam is comfortable. Processors have enough nearby stock to offer, but many are reluctant to discount aggressively because their raw material was purchased at relatively firm RCN levels. Financially stronger exporters are prepared to carry inventories, reducing forced selling and thus cushioning the downside for kernels.
Conversely, downstream demand is clearly subdued. US roasters and importers are reportedly buying only three to four months forward instead of six to nine months, while many European supermarket chains and packers have already covered near‑term needs. High energy costs and sticky food inflation encourage retailers to limit working capital and keep nut inventories lean, depressing incremental kernel demand despite seasonally stronger buying for year‑end programs usually starting during this period.
Fundamentals & Policy Impact
The most significant structural change this week is the US decision to impose an additional 12.5% Section 301 tariff on most imports from Vietnam, including cashew kernels. This immediately erodes the price competitiveness of Vietnamese supplies into the US against alternatives from Côte d’Ivoire, Benin, Ghana and Tanzania, which remain tariff‑free under the reported measures. For US buyers, African origins now offer a relative cost advantage at the landed level, even if FOB differentials are narrow.
For Vietnam, the tariff shock arrives at a time of already weak demand. Exporters face the choice between cutting offer prices to offset part of the tariff, redirecting volumes to Europe and other markets, or slowing sales to wait for clarity. Given the firm RCN cost base, deep price cuts are unattractive, suggesting the adjustment may instead appear as lower Vietnamese export volumes to the US and stronger competition for African kernels in other destinations.
Globally, fundamentals remain mixed: raw nut availability is adequate, but not burdensome, thanks to disciplined farmer selling and inventory concentration in financially stable hands. Kernel stocks at destination are not excessively high, yet purchasing behaviour is cautious enough to prevent any tightness. This combination explains the current stalemate: limited downside from supply, but no clear catalyst for a sustainable price rebound.
Weather & Crop Outlook
Weather in key West African growing regions and in Vietnam is seasonally sensitive at this time of year, but there are no immediate widespread crop threats reported that would justify a sharp risk premium in RCN prices. Localised issues could still affect quality and collection logistics, yet overall production prospects for the current cycle appear broadly in line with expectations.
Given the firm RCN offers already visible in Ghana, Côte d’Ivoire and Guinea‑Bissau, any significant weather‑related losses later in the season could tighten the RCN balance and further reduce the willingness of origin holders to discount. For now, however, physical availability is sufficient and logistics are functioning normally.
Trading Outlook
- Short‑term bias: Slightly bearish to sideways for Vietnamese kernels in USD terms, as buyers continue to push for lower levels and delay shipments, but firm RCN costs limit the scope for deep discounts.
- Origin switching: US buyers are likely to increase inquiries for African kernels due to the 12.5% tariff on Vietnamese product, supporting differentials for Côte d’Ivoire, Benin and Ghana in the coming weeks.
- Procurement strategy: Roasters and packers with uncovered Q4 2026 demand may consider scaling in small volumes at current levels, while avoiding heavy forward coverage until the real impact of US tariffs and any demand slowdown becomes clearer.
- Risk management: Sellers should monitor FX and freight developments closely; in a low‑margin environment, small changes in costs can determine whether additional price concessions are viable.
3‑Day Price Indication (EUR)
- Vietnam, WW320 kernels, FOB: Expected to trade broadly steady around EUR 6.20–6.40/kg over the next three days, with limited liquidity and a soft undertone.
- India, W320 kernels, FOB/FCA: Likely to remain in a slightly higher band near EUR 6.40–6.70/kg, supported by domestic costs and modest export interest.
- EU (Netherlands), WW320 kernels, FCA: Destination prices around EUR 4.90–5.10/kg appear stable in the very short term, with buyers well covered and only selective spot demand.