Nut Talk

Will 2007 be a good year for Vietnam’s cashew nuts?
13:07' 04/01/2007 (GMT+7)
VietNamNet Bridge – Cashew nut processors and exporters believe that 2007 will be a good year for the industry after 5-6 years full of hardships.2005-2006: suffering losses, Vinacas Chairman resigned

In 2005, the US and EU members joined forces with each other in forcing the cashew nut prices down to $4-4.3/kg of peeled nuts. Meanwhile, Vietnamese exporters, encouraged by the 2004 successful export year, signed contracts with farmers to buy material cashew nuts at high levels of VND16-18,000/kg. As a result, cashew nut exporters incurred the severe loss of VND1tril ($62.5mil).The situation was so pessimistic that Chairman of the Vietnam Cashew Exporters and Processors (Vinacas) Ho Ngoc Cam, had to resign. Mr Cam said that Vinacas once warned its members that cashew nut prices may drop in 2005, but the warning was ignored by the exporters who were so happy with the successful crop.A paradox exists that when Vietnamese cashew producers and exporters are miserable with heavy losses, Vietnam-made cashew nut is favourite by millions consumers in the world. Vietnam’s cashew nut is very delicious with high content of oil, and Vietnam’s cashew nut exports rank the second in the world, just after India.The situation became even worse, when Vietnamese cashew nut exporters, who were in critical situation as partners tried to force the prices down, could not extend the time to pay bank debts. Cashew nut exporters had no other choice than bartering the products away to get money to pay the banks. All the cashew nut exporters incurred heavy losses in 2005. The situation has been improved a little in 2006, but remains gloomy.2007, time to regain cashew industry’s strengthEncouraged by high economic value, cashews has been developing very strongly in Vietnam. In 1995, Vietnam had 190,300 ha of cashews, and the figure rose to 433,000 ha after 10 years, which can provide 350,000 tonnes of cashew nuts. There are some 200 cashew nut processing workshops, which have the total capacity of 600,000 tonnes a year. Vietnam can export 115 tonnes of cashew nut a year, which can bring $500mil worth of products.Vinacas has learned that the cashew processing industry has the development period of 5-6 years, i.e, after 5-6 years of failure, there will be a new period of development. 2007 will be the time for the cashew processing industry to regain strength.Vinacas has called on cashew enterprises to give up the old way of doing business, and to compete with Indian exports.Vinacas plans to export $700mil worth of products in 2007, which, according to Phan Van Bien, Chairman of Vinacas, within reach if local banks agreed to give support.Several days ago, Vinacas has sent documents to local banks, asking for cooperation in support in raising cashew nut exports.Nguyen Thi Tam, Deputy Director General of the Vietnam Technological and Commercial Bank, known as Techcombank, and Director of Techcombank’s HCM City Branch, said that Techcombank loaned $350bil to cashew enterprises in the last year, and will lend another sum of VND600bil in this year. She said that if everything goes smoothly, the bank can provide the loans of up to VND1tril ($62.5mil). Techcombank has also cooperated with transport and forwarding companies in an effort to support cashew enterprises.Pham Van Cong, Deputy Chairman of Vinacas, said that the association would not set the fixed prices of purchasing materials for cashew enterprises. Vinacas will let enterprises to decide the prices themselves. Vinacas will only give the information about international and domestic prices to enterprises for reference only. The information will also be given to commercial banks, so that they can decide whether to make loans to enterprises.Ha Yen