2025 marks a significant turning point for Vietnam’s economy, with a series of new policies and public investment projects aimed at boosting strong growth, particularly in the agricultural sector. As one of Vietnam’s key export industries, the cashew sector faces both major opportunities and challenges from this new wave of policies, which focus on three key pillars:
- Upgrading Logistics Infrastructure: Investment in transportation and port infrastructure is expected to significantly reduce shipping costs—a long-standing bottleneck that has hampered the industry’s competitiveness.
- Deep Processing Revolution: The push for advanced technology and deep processing aims to increase the added value of cashew products, reducing the industry’s reliance on raw exports.
- Export Market Diversification: Enhanced trade promotion and market diversification efforts are intended to mitigate the risks associated with over-reliance on a few traditional markets.
Despite these promising prospects, the cashew industry faces significant hurdles. These include the risk of slow disbursement of public project funds, strict technical and tariff barriers in major markets like the EU and the US, and especially a heavy dependence (around 90%) on imported raw materials—a critical strategic weakness.
2024-2025 Monetary Policy: A Strong Tailwind
For the 2024-2025 period, the State Bank of Vietnam’s (SBV) monetary policy is crucial in maintaining macroeconomic stability and promoting economic growth. Key targets include:
- GDP Growth: 8%
- Inflation Control: Below 4%
To achieve these goals, the SBV has implemented several adjustments. As of July 31, 2025, the average lending interest rate for new transactions has decreased to 6.5% per annum, making it easier for businesses to access capital. At the same time, preferential credit packages for the agricultural sector have been rolled out, helping businesses reduce production and investment costs.
However, a key factor with complex and multifaceted effects on the cashew industry is the exchange rate. Cashew is a unique commodity: it exports the final product (cashew kernels) in USD while also importing the majority of its raw materials (raw cashews) in USD. Therefore, fluctuations in the USD/VND exchange rate are not just an export advantage but also create dual pressure on profitability.
Analysing the Impact of the USD/VND Exchange Rate on Business Profitability
On August 18, 2025, the reference exchange rate for USD/VND was 25,245, with common bank transaction rates fluctuating between 26,090 and 26,450. This indicates a weakening trend for the Vietnamese Dong (VND). In theory, when the VND depreciates against the USD, a business’s export revenue, when converted to VND, increases, leading to a paper profit.
However, since the cashew industry relies on imported raw materials for up to 90% of its needs, input costs also rise proportionally when converted to VND. Actual profitability depends on the difference between the export price of cashew kernels and the import cost of raw cashews.
Scenario 1: Stable Raw Material Prices
If the import price of raw cashews remains relatively stable, a depreciating VND could yield a certain level of paper profit for exporting businesses. The gross profit in USD would remain unchanged, but when converted to VND, it would be higher.
Scenario 2: Sharply Rising Raw Material Prices Not Aligned with Export Prices
This is the riskiest scenario. When the price of raw cashews increases significantly, the cost of raw materials to produce one ton of cashew kernels also rises. The depreciation of the VND would then amplify this cost when converted, eroding the business’s actual profit. In this case, the weakening VND is no longer an advantage but a factor that depletes profitability.
Therefore, cashew exporters need to manage exchange rate risks tightly. Strategic solutions like market diversification, supply chain optimisation, and investing in deep processing are crucial for the industry to overcome exchange rate challenges and maintain a competitive edge in a volatile economic landscape.
Public Investment in Infrastructure and Logistics: A Lever for the Cashew Import-Export Industry
To address the cashew industry’s biggest bottleneck—high transportation costs—the Vietnamese government is boosting public investment in transportation infrastructure and logistics systems. These projects will not only connect key production regions but also reduce the cost and time required to transport goods, especially exported cashews.
In Binh Phuoc, the cashew capital of the country, two strategic expressways are currently under development: the Gia Nghia – Chon Thanh and the Ho Chi Minh City – Thu Dau Mot – Chon Thanh routes. With a total investment of tens of trillions of VND, these expressways, once completed, will create a seamless transportation corridor directly linking the Central Highlands (Dak Nong) and Southeast (Binh Phuoc) raw material regions with major seaports like Cai Mep – Thi Vai and Ho Chi Minh City.
Prioritizing budget allocation for these key transportation projects is expected to help reduce logistics costs for businesses by 15-20%, thereby significantly boosting the competitiveness of Vietnamese cashews in the international market.
See further: How long can Vietnam maintain its dominance in the cashew industry?
Enhancing Value Through Technology and Deep Processing
In addition to physical infrastructure, the government is also tackling two core issues for the cashew industry: low productivity and low added value. The goal is to transform the sector from a raw-export-dependent industry into a more sustainable, efficient, and deep-processing one.
New policies are encouraging the application of science, technology, and smart agriculture. A prime example is the program to replant nearly 2,500 hectares of old cashew trees in Binh Phuoc with new, high-yield varieties, providing seedlings to poor and ethnic minority households. This long-term strategy aims to reduce the industry’s reliance on imported raw materials and improve the quality of domestic cashews.
Furthermore, a significant portion of the Economic Recovery Program budget is dedicated to helping businesses invest in modern production lines. The objective is to increase the proportion of deep-processed products like cashew butter and cashew milk to 30% of the total export value by 2025.
To expand markets, the government is also sponsoring the “International Cashew Conference” in Hanoi in the fourth quarter of 2025. This event will provide an opportunity for Vietnamese businesses to connect directly with potential importers from Europe and the Middle East. This strategic move aims to diversify export markets, mitigate risks, and promote sustainable growth for the entire industry.
Positive Outlook from Markets and Export Prices
The global cashew market is projected to reach a size of nearly $10 billion, with the deep-processed segment accounting for more than half of that value. This is a positive sign for Vietnamese businesses, as the country’s strategy of focusing on deep processing gains momentum. Notably, the export price for cashew kernels (specifically the common WW320 type) has seen a strong increase of 23-28% year-on-year, reaching $6.80–$7.60 per kg. This price surge not only demonstrates strong market demand but also helps boost revenue and profitability for Vietnamese exporters. The annual export target of $4.5 billion reflects the industry’s confidence despite market volatility.
In terms of supply, raw cashew production from major growing nations like Ivory Coast and Cambodia has reached record highs, at 1.3–1.5 million tons and 850,000–900,000 tons, respectively. Additionally, Vietnamese cashew exporters are actively exploring and expanding into new markets. China has emerged as a bright spot, with its import value growing by over 41% in 2025. This presents a golden opportunity for Vietnam to boost its exports, offsetting challenges in the U.S. market.
Meanwhile, the European Union (EU) remains a key market, accounting for over 70% of Vietnam’s total cashew imports. With major markets like Germany and the Netherlands, and particularly the strong growth in the organic cashew segment, the EU is not only a stable market but also a place where Vietnam can assert its position on product quality.
In summary, 2025 is a pivotal year for the cashew industry, with opportunities and challenges intertwined. Grasping market signals, optimising the supply chain, and implementing flexible market diversification strategies will be key for Vietnam’s cashew industry to maintain and strengthen its leading position in the global market.
See more: The Landscape of Vietnam’s Cashew Exports to China: Data and Trends
