<p></p><p>It now seems to be the most difficult period for cashew exporters. The export prices have plummeted, while the export markets have been narrowed, and enterprises do not have money to collect materials in the harvesting season.The cashew nut export prices have been decreasing dramatically since late 2011, from 8000 dollars per ton in the fourth quarter of 2011, to 6500 dollars. In the domestic market, the raw material price has been halved to 20,500 dong per kilo.</p> <p>The Vietnam Cashew Association (Vinacas) said there have been very few transactions with European and North American importers. Meanwhile, China, one of the biggest consumers, has closed its doors over the last month. It is now the harvesting season, but enterprises do not have money to collect materials.“It is very difficult for us to access bank loans,” said Nguyen Thai Hoc, Chair of Vinacas.Commercial banks refuse to provide loans to cashew companies, partially because of the high unpaid debts of the enterprises. By early March 2012, the outstanding loans provided to cashew companies had reached 3 trillion dong. The sum of money is still “buried” in the big inventory volume of 200,000 tons. </p><p>In 2011, since the cashew nut price increased sharply, enterprises tried to seek capital from all possible sources to collect materials, hoping that they would make fat profits when the prices go further. However, in the fourth quarter of 2011, the export cashew nut price unexpected dropped dramatically, from 8000 dollars per ton to 7000 dollar at the end of the fourth quarter of 2011, and to 6500 dollars per ton in early March 2012 (FOB, HCM City port).The prices decreased so rapidly that enterprises could not take any actions to respond. “The material price was 35,000-40,000 dong per kilo on average in 2011. However, no one could imagine that the prices would plunge to 20,000 dong per kilo only,” Hoc said. </p><p>Cashew exporters now have to keep hundreds of thousands tons of cashew in their stocks, while the prices are on the decrease, which has put them on the tenterhooks. However, many of them decide to hold out and not to bargain away cashew nuts at this moment to stop loss.As a result, their proposal to borrow more money to collect materials has been refused by commercial banks.A senior executive of Vietinbank said that if businesses want banks to restructure the debts and provide new loans, they have to prove the efficiency of their business plans.“In such conditions, I think that cashew companies need to stop loss by selling inventory products,” he said.Vinacas has estimated that from March to May, 2012, cashew companies would need 10,000 billion dong to collect 380,000 tons of raw cashews from farmers. Besides, the enterprises would also need at least 250 million dollars more in the months from April to September, to import 300,000 tons of raw materials for local processing. </p><p>Meanwhile, the sky high interest rates have been putting big difficulties on cashew exporters, In fact, they also had to borrow money at high interest rates in 2011. However, the high interest rates could be offset by the high export prices. While the interest rates were at 22-23 percent, the export prices increased by 30 percent, which allowed exporters to make profits. Meanwhile, the prices have been decreasing sharply so far this year, but the interest rates are still at high levels.<br></p><p></p>