Vietnam: Cashew Industry Seeks Government Assistance
[2009-01-15]
The Viet Nam Cashew Association has turned to the government for credit support to help processing businesses and farmers cope with falling global prices and slowing consumption.
In a petition to the prime minister, the association, also known as VINACAS, asked for banks to lend cashew farmers and businesses VND6.7 trillion (US$375 million) for the domestic production of 450,000 tons of raw cashew, which is equivalent to 100,000 tons of cashew nuts.
VINACAS proposed that the government subsidize interest payments for VND2 trillion of the funds, which it would borrow from the state-run Vietnam Development Bank.
The rest of the funds would be borrowed from commercial banks, VINACAS said, asking for preferential interest rates that banks set aside for businesses that export farm products.
Nguyen Duc Thanh, the acting chairman of VINACAS, said he expected the price of cashew nut exports to fall to $4,500 a ton, which is $1,000 less than last year, due to the global economic downturn.
Since demand is down alongside the slump, farmers and businesses are holding about 30,000 tons of cashew nuts in storage, and many of their bank loans are overdue, he said.
Vietnam's cashew nut exports reached $908 million last year, a 38.8% increase year-on-year.
In a petition to the prime minister, the association, also known as VINACAS, asked for banks to lend cashew farmers and businesses VND6.7 trillion (US$375 million) for the domestic production of 450,000 tons of raw cashew, which is equivalent to 100,000 tons of cashew nuts.
VINACAS proposed that the government subsidize interest payments for VND2 trillion of the funds, which it would borrow from the state-run Vietnam Development Bank.
The rest of the funds would be borrowed from commercial banks, VINACAS said, asking for preferential interest rates that banks set aside for businesses that export farm products.
Nguyen Duc Thanh, the acting chairman of VINACAS, said he expected the price of cashew nut exports to fall to $4,500 a ton, which is $1,000 less than last year, due to the global economic downturn.
Since demand is down alongside the slump, farmers and businesses are holding about 30,000 tons of cashew nuts in storage, and many of their bank loans are overdue, he said.
Vietnam's cashew nut exports reached $908 million last year, a 38.8% increase year-on-year.
Source: vnbusinessnews.com
Keywords:Cashew
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