Cashew sector calls for 800 million USD credit package

 

HCM City (VNA) – The Vietnamese cashew sector is calling for an 800 million USD credit package from commercial banks to better serve its exports, as heard at a seminar held in Ho Chi Minh City on July 6.

According to cashew nut exporters, banks are hesitant to disburse loans due to fluctuations in cashew nut prices. Several banks disagreed to offer additional loans after maturity, forcing firms to sell up cashew nut stocks in order to maintain a floating capital.

Secretary General of the Vietnam Cashew Association (Vinacas) Dang Hoang Giang said in Long An, only 12 out of 33 cashew enterprises are functioning, while 80 percent of processing facilities have either been shut down or forced to suspend their operations in Binh Phuoc.

Not only in Vietnam, but firms in India - one of the world’s largest cashew producers and processors – are facing similar issues. In Kollam city in Kerala state – the cashew-nut capital of India – firms had to import cashew materials at high prices but sell at low prices, forcing 70 percent of enterprises to shut down and file bailout applications.

The Indian government held a meeting to discuss measures and asked its central bank to either extend loans or lower its interest rates.

Vinacas Chairman Nguyen Duc Thanh said cashew firms have renegotiated purchasing prices of cashew materials which have been cut by 150-300 USD per tonne.

Last year, Vietnam’s cashew exports surpassed 3.6 billion USD, placing it the first among farm produce for exports.

The International Nut Council forecast that the world’s cashew nut prices are rising by 6 percent per year on average. Meanwhile, the global cashew demand is rising, especially in the last half year. As inventories run out, cashew enterprises need to tap opportunities to import materials for processing and export.

Vinacas estimated that nearly 500,000 tonnes of cashew materials are on the way to Vietnam from exporting countries or are stuck in bonded warehouses. It pledged to provide a list of prestigious cashew export and import enterprises for banks to facilitate their capital access.

In the first half of this year, Vietnam earned nearly 1.9 billion USD from cashew nut exports, up 25.2 percent year on year. Meanwhile, imports plunged 40.7 percent to over 750 million USD. The US remained the largest importer of Vietnamese cashew nuts, accounting for a 35 percent market share, followed by China at 10 percent.-VNA