Cashews a hard nut to crack

Vietnam Cashew Association (Vinacas) chairman Nguyen Thai Hoc said around 300 firms were currently exporting cashews. Many of them are outside the cashew industry and do not have specialised processing workshops. They just gather kernels from small processing establishments for export with unstable product quality, ruining the prestige of Vietnam’s cashews in the global market.

“Vinacas has warned export firms of product quality. We also asked the Ministry of Agriculture and Rural Development (MARD) to devise a specific decree on conditional cashew export processing to tighten export requirements,” said Hoc.

In fact, the MARD has enacted a set of standards to cashew processing establishments which were not strictly followed by a number of localities. Hence, while awaiting the government go-ahead for enactment of such a decree Vinacas proposed the MARD urge agricultural and rural development departments in localities to come up with measures which could help trim substandard cashew processing units.

MARD deputy minister Diep Kinh Tan said the ministry welcomed business associations’ and firms’ restructuring efforts to boost quality meanwhile issuance of a specific decree on conditional cashew export trading would require further consideration.

Not only beset with the threat of losing prestige in the global market, cashew exports in 2012 also face a lack of export contracts and capital paucity for material procurement.

Cashew firms face overdue debts amounting VND5 trillion ($238 million) mainly at Agribank and VietinBank, according to Hoc.

To ease firm burdens Hoc proposed the MARD source central bank approval for extending payment of cashew firms’ $238 million overdue debt by an additional six months.

Besides, cashew firms wanted banks to render loans with suitable interest rates to support their efforts in material procurement.

Vinacas also urged firms to step up efforts for fulfillment of MARD targets of exporting 180,000 tonnes of kernels and 60,000 tonnes of peels to rake in $1.5 billion export value in 2012 against 150,000 tonnes of kernels for $1.4 billion export value in 2011.

In 2011 export cashews fetched an average over $8,000 per tonne. However, the export price plunged 20 per cent from early 2012 and currently stays at $6,300-6,500 per tonne.