Vinacas drives cashew nut exporters to death?

VietNamNet Bridge – Tens of cashew nut exporters incur losses, while the Vietnam Cashew Association (Vinacas) has fallen into complete mess. It’s still unclear about the future of the Vietnam’s cashew industry.

Only 50 percent of invited members were present at the eighth conference of Vinacas held on December 21. It was a burning conference, where participants quarreled noisily, a signal showing that the members were in serious divergence.

After the speech delivered by Vinacas’ Chair Nguyen Thai Hoc, former Deputy Chair of Vinacas Nguyen Van Lang made participants thunderstruck when denying all the achievements reported by Hoc.

“The business result in 2009-2012 showed the low capability in the management and forecasting of Vinacas’ leaders, Vinacas’ Chair in person and of the 'G20 group',” Lang said.

The 2011-2012 crop was described as a “disaster” to the cashew industry, when the cashew nut price dropped dramatically from US$10,000 per ton to $7,000. A lot of enterprises incurred loss and many have been on the verge of bankruptcy, including the "G20 group", considered the group of the most powerful cashew exporters.

Vinacas once predicted that the failure of the cashew crop would lead to the increase of the cashew nut prices. However, what happened in reality was quite different. Hundreds of thousands of tons of raw cashew nuts lied idle in storehouses and were not put into processing because of the unsalability.

The long storage time made the cashew nut quality degrade. Meanwhile, more than a half of processed products were low grade which could not be sold. Cashew exporters, who bought tens of thousands of tons of materials from domestic sources and importers at the exorbitant high prices of US$1300-1500 per ton, could not sell products to get back money.

The managers of Vinacas have been accused of deliberately misinterpreting the instruction of the Prime Minister.

In April 2008, the Prime Minister decided that the state budget would prop up $35,000 to Vinacas, so that the association can join forces with other founding members (Cepci from India and Sindicaju from Brazil) to set up the world’s cashew association.

The Instruction of the Prime Minister said that Vinacas was allowed to collect one dollar from every tone of cashew nut exported from Vinacas’ members. The money would be used to pay the yearly dues to the world’s cashew association whose Vietnam is a member.

However, Nguyen Thai Hoc, Vinacas’ Chair, affirmed that Vinacas collects one dollar from every ton of cashew nut exported to raise funds for the activities to be organized.

As such, over the last many years, the money raised from cashew nut exporters has been used for “the re-investment activities of the cashew sector.”

Vinacas’ leadership has been accused of setting up the G20 group which comprises of 29 enterprises, the “big guys” in the cashew industry. The G20 enterprises have been making the corrupt use of their positions in the association to put smaller enterprises under coercion.

In early October 2012, for example, Vinacas proposed the government to list cashew export as a type of conditional business branch without consulting with the member companies.

Under the proposal, enterprises would be allowed to export cashew nuts if they have at least one processing workshop with the capacity of 2,500 tons at least.

Vu Thai Son, Director of Thanh Son Company, said that if the proposal is approved, hundreds of small and medium cashew enterprises would go bankrupted, because they don’t have money for such heavy investments.

Lao Dong