Cashew industry eyes loans to store harvest

The Vietnamese cashew industry needs bank loans to stockpile its harvest to prevent a fall in prices, the head of the industry association has said.

Nguyen Thai Hoc, chairman of the Viet Nam Cashew Association (Vinacas), told a cashew purchase conference yesterday that larger businesses with deep pockets capacity should buy harvested cashew and the association would consider urging relevant agencies and banks to provide them loans.

“The industry is facing some unusual developments this year, like drying up of credit, high interest rates, and tough requirements for getting bank loans,” he said.

The cashew crop is due for harvest in Binh Phuoc Province on May 10, while in Vung Tau and Dong Nai provinces, it is May 20.

Frequent and heavy rains had adversely affected the growth of cashew plants this year, Hoc said.

With the cost of processing rising to US$1,200-1,300 per tonne of nuts, processors would only break even at $4 a pound (453gm), he said.

But many were selling at $3.7-$3.9, he said, blaming it on three reasons: Small businesses tend to buy raw cashew and process and sell immediately, loans are very expensive at 20-25 percent but still hard to get, and rainy weather has tempted businesses to sell out and buy again.

Pham Van Cong of the Nhat Huy Joint-Stock Company agreed, saying some businesses sold cashew at low prices to repay expensive loans.

He urged Vinacas to persuade banks to lend on easier terms.

Doan Xuan Hoa, deputy director of the Department of Agriculture, Forestry and Fishery Products Processing and Salt Industry, said the cashew industry was facing a hard time.

He called on Vinacas to monitor raw-cashew and export prices and the quality of cashew nuts.

There was a need to control export prices since a wrong forecast could lead to needless stockpiling of cashew, resulting in heavy losses, he added. – VNS

Tags: Vietnam Cashew industry