The term is an analogy to blood diamonds (or conflict diamonds), precious gems that are sold in order to fund armed conflict and civil war.
Time magazine reported on allegations made in a report by Human Rights Watch about the production of blood cashews in Vietnam:
First there were blood diamonds from the Congo. Then blood rubies from Burma. Could blood cashews from Vietnam be next?
That's one implication of a new Human Rights Watch (HRW) report that claims cashew nuts and other Vietnamese exports are produced by drug addicts detained in forced-labor camps across the country. Those who refuse to work are beaten with truncheons, given electric shocks, locked in isolation, deprived of food and water, and obliged to work even longer hours, the report says. Joseph Amon, director of the New York City–based organization's health and human-rights division, says what's happening at the centers "constitutes torture under international law."