The cashew processing industry in Binh Phuoc Province, known as the "capital of cashew" in Viet Nam, faces challenges because of a shortage of raw materials and capital. — VNA Photo Dinh Hue

Binh Phuoc Province, known as the "capital of cashew" in the country, is facing problems processing cashews due to limited raw materials and capital.

The province has around 134,000 hectares of land for cashew, and over 1,400 processing and exporting businesses that sell to markets such as the US, Australia and China.

Only 30 of them are able to import raw cashews for processing. The rest are small and micro businesses.

Processing businesses need around 600,000 – 800,000 tonnes of raw cashew annually, but the province is only able to provide 200,000 tonnes. Imports, which come from African countries, Indonesia and Cambodia, have high costs, which reduces profitability.

During the first two months of the year, the province exported US$61.7 million worth of cashews, and the value of each tonne of cashews was 23.1 per cent lower than that of the same period last year.

Vu Manh Tung, owner of a cashew processing facility in Phu Rieng District, said there was a shortage of raw materials because businesses were not investing enough in material production zones, and co-operation between businesses and farmers was weak.

Other cashew processing facilities in the province are also receiving fewer orders compared to last year due to COVID-19, and some small businesses have had to close down.

In addition, lack of access to capital is a major concern, said Nguyen Anh Hoang, director of the Department of Industry and Trade.

Many businesses have had to take out loans, and when there is market turbulence, banks issue fewer loans or tighten loan conditions, making it harder for businesses to get loans.

The province is working on a plan for concentrated cashew production areas that will improve value chains and link farmers to businesses. It is also facilitating investment in hi-tech, traceability, and geographical indicators.

Businesses have been encouraged to diversify their products and improve marketing to their consumers. — VNS