VietNamNet Bridge – The Government will extend its loan assistance period for coffee export activities from 12 to 36 months, providing a timely boost for coffee traders against a backdrop of plunging prices.

The State asked the Ministry of Agriculture and Rural Development to work closely with relevant sectors to evaluate present difficulties for exporters and determine which firms require financial assistance.

The central bank, meanwhile, was required to guide banks in devising financial measures to help exporters of coffee and other agricultural products overcome business obstacles.

The Ministry of Finance (MoF) had previously lobbied the Prime Minister to extend the loan period to 36 months.

Falling coffee prices in both domestic and export markets had caused traders to suffer heavy losses, according to MoF. In Central Highlands provinces, the price slipped from VND46,000 per kilo in March to the current price of VND39,000-40,000.

The export price for Robusta coffee dropped from US$2,200 per tonne in March to $1,850 now. For Arabica coffee, the price tumbled from a 2011 high of $6,800 per tonne, to $2,800 today.

By the end of May, Viet Nam Development Bank (VDB) loans for coffee export activities totalled VND696 billion, according to MoF. Meanwhile, the total bad debt of the coffee industry stands at VND6.33 trillion, including debts owed to both commercial banks and VDB.

General Statistics Office figures revealed coffee exports in June saw a year-on-year decline of 29 per cent in volume (dropping to 100,000 tonnes) and 31 per cent in value (falling to $210 million.)

The figures represent an increasingly bleak picture for coffee exporters, with 2013 likely to be a year they'll wish to forget. In the first half of this year, exports fell 23.4 per cent in volume to 804,000 tonnes and 21.9 per cent in value to $1.72 billion.

Source: VNS