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Mills cut capacity as coconuts fell short from exports
In Ben Tre province, known as the land of coconuts, many coconut manufacturers have reduced capacity down to 20-30% since mid 2010 as they could not obtain inputs for processing when most coconuts have found their way to China.
A big shortage
Le Thi Cam Van, the Manager of Ben Tre Coconut Import and Export Joint Stock Company says that her 4 coconut manufacturing factories need 600,000 dry coconuts a day to produce 100 tons of output products.
“But since July, 2010, we have to reduce capacity to only 20% because there are no coconut inputs. That means 80% of the workers have to lose their job,” she says.
Similarly, coconut manufacturing factory Thanh Vinh also needs 400,000 coconuts a day but has had to work at 30-50% capacity recently, says Cu Van Thanh – the director.
Tran Van Dau, Deputy director of Ben Tre Department of Industry and Trade says that all domestic coconut manufacturers only obtained an input of 250 million coconuts in 2010, falling short of 100 million.
One of the main causes for such a shortage, according to Dau, is the mass exportation of coconuts.
Only in the year 2010, Ben Tre exported a total of 100 million coconuts into China. Other destinations include Thailand and Cambodia.
Coconut export tax applicable next month
The shortage of coconuts as raw material has been occurring for years, says Dau.
But good news at last.
The Ministry of Finance has imposed a new 3% tax on coconut exports starting May 20th.
Le Thi Cam Van says each of the coconuts exported will merely benefit the sellers. But once manufactured, its value will be much increased than unprocessed coconuts.
“Exporting raw coconuts only earns 10 dong per coconut, and this all goes to the sellers. But if the manufacturers make it into different products, they will earn hundreds of dong per coconut,” Van explains.
Many coconut growers say that coconut export tax is necessary to save the coconut manufacturing industry, but also worry that this will reduce the price, bringing disadvantages.
However, Van says that most of the manufacturing factories in Ben Tre are designed to work with high capacity and will operate in full capacity if they have sufficient inputs.
Besides, many manufacturers, including Ben Tre Coconut Import and Export Joint Stock Company, have planned to make new products like coconut powder milk, charcoal to enhance coconut’s values.
Therefore, coconut price is unlikely to go down.
In early 2010, 12 coconuts were sold for VND40,000. This peaked to VND110,000 per 10 coconuts at the end of the year.
Some manufacturers shifted to exporting raw coconuts for a higher income.
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