The average price of unprocessed cashews in Cambodia during the first six months of the year was over 50 percent higher than during the same period in 2014 due to increased interest from overseas buyers and reduced regional supply, according to industry experts.
Chhiv Ngy, president of the Cashew Association of Kompong Thom, said the average price of unprocessed cashews was 4,550 riel (about $1.14) per kilogram between January 1 and the end of June, up from 3,000 riel (about $0.75) during the same period last year.
Mr. Ngy said that since December, increased interest in unprocessed cashews from South Korea, Japan, Canada and Germany had given local farmers more power in negotiating prices with middlemen.
“This year, middlemen cannot lower the price when they buy cashews from farmers, which is different from last year,” said Mr. Ngy, whose association comprises 378 member families cultivating 10,000 hectares of land.
Tep Sothun, director of cashew exporter Mekong Rain Natural Foods, said that an overall lower supply of cashews in the region had led more international buyers to turn to Cambodia for the nut, thereby enabling local farmers to fetch higher prices.
“In Asia, countries that used to produce the most cashews…include India, Indonesia and Vietnam,” he said. “After the price of rubber soared earlier, farmers in those countries mostly cut down their cashew trees and grew rubber trees instead.”
As the price of rubber dropped, Mr. Sothun said, the price of cashews rose due to high demand.
“That’s why this year, Vietnamese traders and other cashew businesspeople from other countries flocked to Cambodia to find cashews, resulting in a very high price,” he said.
Chhean Vongchhay, a cashew trader in Ratanakkiri province’s Banlung City, said that while cashews in his province were less popular due to their smaller-than-average size, demand had also risen in the area.
“There are more middlemen in the city competing…to buy cashews from local farmers to sell to Vietnamese traders at Cambodia-Vietnam border areas like Keo Seima and O’Yadaw,” he said.
Economist Srey Chanthy said the higher prices had led many Cambodian farmers to abandon rubber in favor of cashews.
“It [Cambodia’s supply of cashews] has been increasing very significantly over the past five years,” he said, noting the country still played a minor role in the nut’s global supply.