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Khanh Trinh
Over 30 cashew nut exporters threatened with legal action
UK-based Clyde & Co law firm has sent a document to the Vietnamese Prime Minister, saying that 38 Vietnamese cashew exporters still owe export products, causing the loss of nearly $10mil to its clients. The Ministries of Agriculture and Rural Development, Industry and Trade, and the Vietnam Cashew Association (Vinacas) yesterday met with representatives of cashew processing companies to clarify the delays in export deliveries. The delays have caused bad consequences: partners from the UK and North Ireland have approached the Prime Minister and relevant ministries about the exports.
Black list includes … innocents According to Vinacas, by the end of April 2008, Vietnamese cashew nut exporters had signed contracts to export 6,000 containers of cashew nuts worth $495mil. The exporters have delivered 2,700 containers worth $251mil so far, while the remaining volume will be delivered later as agreed by the parties of the contracts.
The problem lies in the fact that 700 containers had overly low contract export prices, which prove to be lower than the input material costs, causing big difficulties for exporters. If respecting the signed contracts, local companies will incur the loss of $11mil. Therefore, local companies have been delaying the deliveries to the partners.
The UK-based Clyde & Co, authorised by cashew importers, has sent a document to the Prime Minister and relevant ministries, saying that Vietnamese companies have broken signed contracts, requesting Vietnamese companies to deliver exports as committed.
The law firm provided a list of 38 companies which still owe export products.
Importers believe that if Vietnamese companies had delivered products as committed, no parties, importers or exporters, would have incurred losses. However, Vietnamese companies, when seeing cashew prices move up slightly, decided to sell the materials they bought to process exports, hoping to buy materials later when the prices went down. However, contrary to their predictions, the prices have continued increasing, causing losses for exporters.
At the meeting, cashew companies admitted the slow deliveries, but they said that the list provided by the law firm does not truly reflect the situation.
Several enterprises said that they have never signed contracts with the importers named by the law firm, but their names are still listed.
The Vietnamese enterprises say they cannot understand why the foreign partners do not intend to re-negotiate with Vietnamese partners, and have sent a document directly to the Prime Minister and relevant ministries.
What to do? The enterprises say that as the input material prices increased by 40%, they have been facing big difficulties in fulfilling contracts.
However, Vinacas said that some enterprises have deliberately not respected the contracts, though they can fulfill the contracts. Meanwhile, Clyde & Co has stated that it will bring the case to arbitration and international institutions if Vietnamese companies deliberately do not respect the contracts.
Deputy Minister of Industry and Trade Nguyen Thanh Bien said that the delivery delays have been affecting the prestige of Vietnamese businesses and of its cashew industry. Bien said that recently, Vietnam has had to spend a lot of money to promote trade in foreign countries, including the UK, the key partner of Vietnamese cashew exporters.
Regarding the wrong number of companies provided by Clyde & Co, Bien asked Vinacas and trade counselors of related countries to clarify the issue.
Vinacas has proposed the establishment of a fund for cashew export assurance.
Luong Le Phuong, Deputy Minister of Agriculture and Rural Development, said that the ministry has proposed that the Government cut the raw cashew import tax from 5% to 0%.
