|Processing coffee for export at Tan An Industrial Zone in Buon Ma Thuot City. The Ministry of Agriculture and Rural Development (MARD) is considering extending loans to coffee exporters as the businesses battle losses brought about by a slump in export prices. — VNA/VNS Photo Hong Ky
HA NOI (VNS)— The Ministry of Agriculture and Rural Development (MARD) is considering extending loans to coffee exporters as the businesses battle losses brought about by a slump in export prices.
The ministry said both domestic and export coffee selling prices had fallen sharply in the last three months, causing headaches for coffee firms which bought their coffee at the previously higher prices.
Statistics from the ministry showed the coffee price had fallen from VND46 million (US$2,190) to around VND40 million ($1,905) per tonne in Tay Nguyen (Central Highlands) provinces.
MARD said the country exported only 109,000 tonnes last month, earning $226 million.
Total coffee exports in the first five months of the year stood at 697,000 tonnes with a turnover of $1.49 billion. This represented a 23.2 per cent decrease in quantity and 21.7 per cent fall in value over the same period last year.
Germany and the US continued to be Viet Nam's leading coffee importers, accounting for 13.5 per cent and 11.8 per cent of total exports, respectively.
The ministry added that farmers and coffee agencies in the country had temporarily limited exports because of the low prices.
The Government issued Resolution 02/2013/NQ-CP to provide solutions that would untie businesses' difficulties in production, market and bad debts.
The resolution extends terms from 12 to 36 months for export loans, however it only applies to vegetable and seafood products, not coffee.
Nguyen Nam Hai, general secretary of the Viet Nam Coffee Exporters Club said rumours had circulated that financial investors had withdrawn from the world's three biggest floors including Arabica Ice New York, robusta Liffe London and BM&F Brazil.
Hai said this was the reason coffee prices had continued to fall in recent months.
He added that several companies which bought coffee at high prices had suffered losses because of the current low export prices.
Truong Ngan Company in southern Binh Duong Province's Di An Town was yet to repay debts totalling roughly VND600 billion ($28.85 million) to banks, including Military Bank, VIB, Oricombank, Agribank, Maritime Bank, Vietinbank and Techcombank.
Nguyen Xuan Binh, the company's director said his company had operated as a coffee exporter since 2005, exporting between 30,000 and 70,000 tonnes of coffee per year.
The company was once prosperous and enjoyed good credit relations with the aforementioned banks. However, in recent years, lagging coffee prices and high interest lending rates had seriously affected the company's operating results and driven it into insolvency, he added.
Central Highland Dak Lak Province's Department of Industry and Trade said the locality had seen 43 coffee businesses and agencies fall into bankruptcy with debts totalling VND300 billion. — VNS