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Exporters losing opportunities, lack necessary capital
Exporters are complaining that they cannot access bank loans, because of which they have missed opportunities to purchase materials at low prices and may also miss chances to earn high profit when export prices increases.
Exporters have many export contracts, but lack capital
Analysts said that besides rice and sliced cassava, all other kinds of farm produce can be exported for good prices. In 2010, crops have been bad due to unfavorable weather. Chief Secretariat of the Vietnam Pepper Association Tran Duc Tung said the world’s pepper output has decreased by 20-25 percent this year, while Vietnam’s output has fallen off by 20 percent. In addition, the cashew output in 2010 also dropped by 20-30 percent.
Due to the lower output, export prices of all kinds of farm produce have been staying firmly high. A representative of the Vietnam Cashew Association said the export cashew nut price in the last six months of the year may increase by another 14 percent. Many export companies have signed export contracts at good prices.
Nevertheless, exporters’ associations say, despite the good prices, since exporters cannot arrange enough capital, enterprises cannot collect enough materials for making products for export.
Pham Van Cong, Deputy Chairman of the Vietnam Cashew Association, said that because bank interest rates were too high, enterprises have been able to purchase 300,000 tonnes of raw cashew nuts from domestic sources and have imported 100,000 tonnes. Cashew nut exporters now need some 1100 billion dong to purchase the cashew nuts now being kept among farmers, estimated at 50,000 tonnes, and need another 5700 billion dong to import 350,000 tonnes of raw cashew for domestic production in the last six months of the year (The cashew import price is about 1100 dollar per tonne). To date, enterprises have nearly used up all the materials they have collected.
In the coffee market, since enterprises did not have sufficient funds, they could purchase only 7-8 percent of the 200,000 tonnes of coffee they planned to purchase, even though the price went down this year.
In general, domestic enterprises do not have much capital and they have to borrow 95 percent of total capital needed. As they do not have enough money, they cannot purchase materials and sell products when they want. Meanwhile, foreign invested enterprises always have profuse capital. They force prices down and collect materials when prices are low. By the time domestic enterprises can arrange capital, materials have run out already.
The last six months of the year are the main business time for wooden furniture producers. However, these producers also do not have ample money to import materials for domestic production. Meanwhile, timber materials in both the world and domestic market are very scarce.
Tung said that to date, Vietnam has exported 72,000 tonnes of pepper, or nearly 80 percent of total output. Tung is worried that exporters may not be able to export 145,000 tonnes, the target set before by the Ministry of Industry and Trade.
vietnamnet, TBKTVN
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