The cashew industry saw an unusual trade pattern in the first two months of 2023 as Việt Nam net-imported nearly US$7 million of the nut. Trade data shows that Việt Nam purchased 272,000 tonnes of cashew from abroad in January and February, most of which came from Cambodia. The General Department of Customs (GDC) said this trade deficit is unusual given that the country is an exporter of cashew, having net-exported about $400 million of the nut last year. It is not the first time that unusual trade patterns hit the sector. In fact, the industry also suffered a trade deficit of around $500 million in 2021, the first deficit in three decades. The customs authority looked into the deficit and uncovered a number of trade frauds behind the atypicality. Two fraudsters were brought to court and all of their imports were subjected to inspection. GDC was concerned that the unusual trade pattern in early 2023 may be linked to similar frauds that caused the deficit two years ago. According to the Deputy Chairman of the Vietnam Cashew Association (VINACAS) Bạch Khánh Nhựt, the boom in cashew imports in the first two months of 2023 could be attributed to the abundant cashew supply in Cambodia where the nut was in season. The geographical proximity of Cambodia to Việt Nam allows Cambodian traders to incur fewer costs exporting cashew to Việt Nam than to other countries, such as India. This has led to a staggering 99 per cent of Cambodian cashew ending up in its neighbouring country. "With a higher profit margin and easier payment options, it is no surprise that most of the Cambodian cashew was exported to Việt Nam," said Nhựt. The deputy chairman believed that the trade deficit in the early months of 2023 was not atypical because Vietnamese traders tend to increase their cashew purchases from Cambodia when the supply is abundant. Meanwhile, many cashew importers, including Tanzania and Mozambique, have yet to enter into contracts with Vietnamese traders during this time. As such, it is too soon to draw any conclusion about the overall trade pattern for 2023. Regarding trade fraud, he did not rule out the possibility of cashew smuggling in January and February. He revealed that smugglers may have used vehicles with a loading capacity of fewer than seven tonnes to manoeuver cashew into the country. However, the extent of the problem remains unclear because Nhựt did not have sufficient data to tell how much of the imported cashew was contraband. With an aim to secure a higher position in the global supply chain, VINACAS is building a roadmap that envisions a broad-based switch toward extensively-processed cashew and the cultivation of more high-quality nut farms. The move is expected to reduce the industry's reliance on imported nuts and enable producers to add more value to their cashew, thereby gaining greater international recognition. According to trade data, Việt Nam exported 61,500 tonnes of cashew in the first two months of 2023, raking in around $353 million. The figure was 7.4 per cent lower than that in the same period last year. The US was the largest importer with 15,858 tonnes, followed by Holland with 5,714 tonnes and China with 5,118 tonnes.