Coffee exporters cry for foreign currency loans
10-11-2012 13:28:51+07:00
Coffee exporters cry for foreign currency loans
Coffee export companies have insisted on the permission to borrow money in foreign currencies, which they say would be the effective solution to ease the capital shortage.
The companies have complained about the lack of capital for the 2012-2013 coffee crop. Meanwhile, borrowed money would decide the success of coffee exporters, 90 percent of whom have been living on bank loans.
Nguyen Tien Dong, Deputy General Director of Agribank, has said that Agribank has disbursed 9 trillion dong for the coffee industry. Of this, 5 trillion dong has been provided to support the cultivation, 4 trillion dong to coffee processors and exporters.
Dong said that the bad debt ratio of coffee enterprises is 3.8 percent, which he believes “acceptable” if compared with other industries. Therefore, Agribank plans to disburse another 5 trillion dong for the industry.
It is expected that 3.5 trillion dong would be reserved for processing for export which would be handled directly to the enterprises financially capable enough to collect materials and export products. Besides, one trillion dong would be injected in medium and long term investment projects (storage and processing development). And the remaining sum of capital would be invested in accordance with the Vietnam Cocoa and Coffee Association initiated coffee sustainable development program.
Le Duc Thong, Director of 2/9 Dak Lak Import-Export Company, which exported 130,000 tons of coffee beans in the 2011-2012 crop, said that he was lucky enough to get loans from banks to collect coffee materials for storage. The company’s outstanding loans sometime reached 2 trillion dong.
However, what coffee companies are now interested in most is the capability to access bank loans in foreign currencies. A senior executive of Intimex Nha Trang said thanks to the foreign currency loans, it had successfully exported 700 million dollars worth of coffee products by the end of September 2012.
Sharing the same view with him, Le Duc Thong said with the interest rates of 7-8 percent, it would be much more attractive to borrow in dollars than in dong (18-21 percent per annum).
Most of the coffee exporters have expressed their worry about the deadline of December 31, 2012, after which, enterprises would not be able to borrow money in foreign currencies any more.
Vicofa, which represents coffee exporters, has proposed the State Bank of Vietnam to continue allowing coffee exporters borrowing in foreign currencies after December 31, 2012.
Thong said that it would not be risky to provide loans to coffee exporters, who have the income sources in foreign currencies to pay bank debts. Since exporters can get payment in dollars, they would not have to buy dollars in the market to pay bank debts, which means that they would not face the exchange rate fluctuation risks.
He went on to say that providing loans in dollars to coffee exporters is a necessary thing to help domestic enterprises become more competitive.
At present, domestic enterprises have to compete fiercely with foreign enterprises in the home market to collect coffee materials from farmers. Foreign enterprises have been holding the upper hand over domestic ones, because they can access bank loans at the low interest rates of less than 4 percent per annum.
“With such an interest rate, foreign enterprises just pay 150 dong in interests per kilo of coffee, while domestic enterprises pay 600 dong,” Thong said, adding that this is the main reason that has put big difficulties for domestic enterprises.
vietnamnet
