Domestic coffee businesses were preparing to report their bad debts to the State bank and related ministries by August 15, according to Nguyen Viet Vinh, General Secretary of the Vietnam Coffee and Cocoa Association (VICOFA).
Vinh said that the coffee industry had faced difficulties including a sharp decrease of 21-25 percent in export prices from 2,400 to 1,800 USD per tonne.
Coffee companies had been unable to turn a profit and subsequently incapable of paying off loans.
Ministries and agencies have instructed VICOFA to submit a detailed report and solutions for the problem.
VICOFA’s members often struggle with high interest rates and competition from foreign direct investment businesses.
However, this is the first time VICOFA has asked its members to report on bad debts due to severity of the situation.
It estimated the association’s total bad and outstanding debts with commercial banks and the Vietnam Development Bank stood at 6.33 trillion VND (300 million USD).
A number of large domestics coffee companies such as the Vietnam National Coffee Corporation (Vinacafe), Vinacafe Buon Me Thuot, the Thai Hoa Corporation and others have fallen into difficulties due to bad debts.
In addition, tax collection in several cities and provinces, especially in the Central Highlands province of Dak Lak which has the higher coffee output, have been affected.
According to the Dak Lak Taxation Department coffee and agricultural businesses contributed around 30 percent of the province’s total tax revenue with a total of 1 trillion VND (47.8 million USD) a year.
In some districts, tax revenues from coffee businesses contributed up to 80 percent of the total amount.
However, in the first half of the year, the province only collected 1.4 trillion VND (66.6 million USD) in taxes, a drop of 18 percent over the same period last year, and only 38 percent of the annual target.-VNA
Vinh said that the coffee industry had faced difficulties including a sharp decrease of 21-25 percent in export prices from 2,400 to 1,800 USD per tonne.
Coffee companies had been unable to turn a profit and subsequently incapable of paying off loans.
Ministries and agencies have instructed VICOFA to submit a detailed report and solutions for the problem.
VICOFA’s members often struggle with high interest rates and competition from foreign direct investment businesses.
However, this is the first time VICOFA has asked its members to report on bad debts due to severity of the situation.
It estimated the association’s total bad and outstanding debts with commercial banks and the Vietnam Development Bank stood at 6.33 trillion VND (300 million USD).
A number of large domestics coffee companies such as the Vietnam National Coffee Corporation (Vinacafe), Vinacafe Buon Me Thuot, the Thai Hoa Corporation and others have fallen into difficulties due to bad debts.
In addition, tax collection in several cities and provinces, especially in the Central Highlands province of Dak Lak which has the higher coffee output, have been affected.
According to the Dak Lak Taxation Department coffee and agricultural businesses contributed around 30 percent of the province’s total tax revenue with a total of 1 trillion VND (47.8 million USD) a year.
In some districts, tax revenues from coffee businesses contributed up to 80 percent of the total amount.
However, in the first half of the year, the province only collected 1.4 trillion VND (66.6 million USD) in taxes, a drop of 18 percent over the same period last year, and only 38 percent of the annual target.-VNA
