Vinacas petitions $800 mln credit package to buy raw material

The Vietnam Cashew Association (Vinacas) said it petitioned an $800 million credit package from commercial banks to buy 500, 000 tons of raw materials for exports.

Vinacas petitions $800 mln credit package to buy raw material

Vietnam is the world’s leading cashew nut exporter, but the industry relies heavily on imported materials.
However, due to shortage of raw materials to process, many firms have even suspended their operations.
Thus, cashew processors want to take more credit from banks to import raw nuts in hope of increasing production for export.
While 80 per cent of companies, mostly medium and small enterprises, in the southern province of Binh Phuoc stopped operations, 12 out of 33 processing firms in the Mekong delta province of Long An suffered the same fate.
As cashew slid down drastically in a short time, banks are reluctant to disburse loans which forced firms to sell cashew at low price to maintain capital.
Vinacas warned importers not to quit security money damaging Vietnam's prestige in the world, they should negotiate with African exporters to get discount of $150-200 a ton.
As a result, Vinacas petitioned the government to intervene so that banks will provide a US$ 800 million credit package to buy around 500,000 tons of raw materials for future processing.
In the first half of the year, the cashew sector sold 176,000 tons earning $ 1.4 billion, increasing in volume and value.
In June only, Vietnam sold 33,000 tons with revenue of $300 million yet it forecast that the turnover will decrease in July because of shortage of materials.

By CONG PHIEN - Translated by UYEN PHUONG

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