Coffee traders may get loan boost
The Ministry of Finance has submitted a proposal to the Prime Minister
to help troubled coffee exporters by extending the period when they
could receive loans.
The Ministry of Finance has submitted a proposal to the Prime Minister
to help troubled coffee exporters by extending the period when they
could receive loans.
Under the proposal, the lending period for export activities will be extended from 12 months to 36 months for enterprises that have financial difficulties as determined by the Ministry of Agriculture and Rural Development.
Declining coffee prices in both domestic and export markets have caused losses to many coffee traders, according to the ministry. In Central Highlands provinces, the price fell from 46,000 VND per kilo in March to 39,000-40,000 VND at present.
The export price for Robusta coffee dropped from 2,200 USD per tonne in March to 1,850 USD now. For Arabica coffee, the price tumbled from 6,800 USD per tonne in 2011 to 2,800 USD now.
Farmers and coffee sale agencies expected the Robusta price to stand at 44,000-45,000 VND per kilo in the domestic market and 2,200 USD per tonne in the world market. These rates will ensure profits, the ministry said.
By the end of May, Vietnam Development Bank loans for coffee export activities totalled 696 billion VND, according to the Ministry of Finance. The total bad debt of the coffee industry stands at 6.33 trillion VND, including debt owed to both commercial banks and Vietnam Development Bank.
The ministry said the Prime Minister should also ask the State Bank of Vietnam to direct credit institutions to help solve the financial difficulties of export traders, as high lending interest rates of 17 percent per year are a major challenge for them.
Another problem affecting the coffee industry is the inability of coffee growers to invest in buying seed and planting new trees. As a result, many growers rely on old trees, which have a low output.
According to the General Statistics Office, coffee exports in June saw a year-on-year decline of 29 percent in volume to 100,000 tonnes and 31 percent in value to 210 million USD.
In the first half of this year, exports fell 23.4 percent in volume to 804,000 tonnes and 21.9 percent in value to 1.72 billion USD.-VNA
Under the proposal, the lending period for export activities will be extended from 12 months to 36 months for enterprises that have financial difficulties as determined by the Ministry of Agriculture and Rural Development.
Declining coffee prices in both domestic and export markets have caused losses to many coffee traders, according to the ministry. In Central Highlands provinces, the price fell from 46,000 VND per kilo in March to 39,000-40,000 VND at present.
The export price for Robusta coffee dropped from 2,200 USD per tonne in March to 1,850 USD now. For Arabica coffee, the price tumbled from 6,800 USD per tonne in 2011 to 2,800 USD now.
Farmers and coffee sale agencies expected the Robusta price to stand at 44,000-45,000 VND per kilo in the domestic market and 2,200 USD per tonne in the world market. These rates will ensure profits, the ministry said.
By the end of May, Vietnam Development Bank loans for coffee export activities totalled 696 billion VND, according to the Ministry of Finance. The total bad debt of the coffee industry stands at 6.33 trillion VND, including debt owed to both commercial banks and Vietnam Development Bank.
The ministry said the Prime Minister should also ask the State Bank of Vietnam to direct credit institutions to help solve the financial difficulties of export traders, as high lending interest rates of 17 percent per year are a major challenge for them.
Another problem affecting the coffee industry is the inability of coffee growers to invest in buying seed and planting new trees. As a result, many growers rely on old trees, which have a low output.
According to the General Statistics Office, coffee exports in June saw a year-on-year decline of 29 percent in volume to 100,000 tonnes and 31 percent in value to 210 million USD.
In the first half of this year, exports fell 23.4 percent in volume to 804,000 tonnes and 21.9 percent in value to 1.72 billion USD.-VNA
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