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Falling coffee prices hit liquidity
The price of Vietnamese export coffee has fallen by 34.7 per cent from its peak last year, making it difficult for small and medium exporters to raise loans for further production and expansion.
Last year, the average export price was at US$2,044 per tonne, 31 per cent higher than that in 2007 while the export price for Vietnamese coffee reached $2,230 per tonne in July and August.
The local price had fallen to $1,500-1,505 per tonne by the middle of last month, due to speculation and the effects of the world crisis, said the Viet Nam Coffee and Cacao Association.
World export price on the London market fell on March 11 to a record low of $1,436 per tonne for coffee delivered in May.
The association said the decline was not due to an imbalance of supply and demand.
Tran Quang Dinh, director of the Coffee Import-Export Company 331, said the low export coffee price had made it more difficult for the 140 domestic coffee exporters to raise bank loans for production and business.
They were small and medium-sized enterprises with limited capital, Dinh said.
The pressure down on prices had forced many farmers in the Central Highland region to sell their coffee beans early to solve immediate financial difficulies.
But selling early added to the pressure on the domestic coffee prices, causing them to drop further.
The farmers needed support from the state to encourage them to keep coffee in stock to avoid the price fall, he said.
Vu Ngoc Hieu, director of Gia Lai Coffee Company, said farmers should rent warehouses of coffee companies to store their coffee beans until the export price reached a reasonable level.
Viet Nam expects to export 980,000 tonnes of coffee in this year, earning $1.76 billion with an average export price of $1,800 per tonne, the Viet Nam Coffee and Cacao Association said.
The volume would increase 1.36 per cent over that last year but the value will reduce 10.7 per cent. The average export price for Vietnamese coffee is expected to decline 11.9 per cent compared with the average price last year.
VietNamNet/VNS
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