Ministry wants indebted coffee industry given more time to repay loans

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Vietnam's Ministry of Agriculture has called for rolling over loans given to coffee exporters since they are otherwise under pressure to export though prices are falling to repay the debts.

It has asked the government to give them an extra one to three years to pay while waiting for coffee price gains, according to a VOV report. 

Since March prices have fallen nearly 15 percent to around VND40 million ($1,900) a ton.

Exporters are hoping prices will rally to VND44-45 million, enabling them to make profits from exports.

In the first five months they exported only 697,000 tons, down 23 percent year-on-year. Their revenues were down 22 percent to $1.5 billion, according to the Vietnam Coffee and Cocoa Association (Vicofa).

Last week seven banks sent officials to seize a warehouse in Binh Duong Province mortgaged by coffee exporter Truong Ngan after the company failed to pay VND600 billion ($28.52 million).

Nguyen Xuan Binh, the company's director, said the company posted losses due to falling prices while incurring high interest rates.

The warehouse contained 4,000 tons of coffee.

Several seizures like this has happened recently in the Central Highlands, the country's major coffee growing area.

Last year there were over 100 indebted firms in the area owing trillion dong, Vicofa said.

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