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Foreign exporters win larger share of coffee crop
High interest rates and competition from foreign exporters is causing difficulties for domestic coffee exporters.
Exporters had to pay VND500,000, about US$23, interest for each tonne of coffee when yearly bank interest rates climbed to 18 per cent and coffee cost about VND35 million (US$1.600) per tonne, said Simexco Dac Lac general director Le Duc Thong.
And the higher costs had been exacerbated by the decision of Tay Nguyen (Central Highlands) provinces to allow foreign exporters to buy directly from farmers and manufacturers, he said.
Previously, they were obliged to buy their coffee from domestic companies.
The foreign companies are stronger financially than domestic exporters.
They can borrow from foreign banks at 4-5 per cent per year or only VND100,000 ($4.7) extra for each tonne of coffee.
The result is that domestic exporters are buying up to 50 per cent less than last year of this year's coffee harvest which is now underway.
vietnamnews
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