Vietnam's coffee exports are expected to decline 40 percent to around US$1 billion this year as prices continue to drop, the Vietnam Coffee and Cocoa Association said.
Do Ha Nam, deputy chairman of the association, said businesses wanted to stockpile 200,000 tons of coffee to prevent further price drops, but they do not have enough money to do so.
"If the situation keeps going on like this in the next few years, local coffee exporters will be eliminated completely from the market as they don't have enough capital resources to compete with foreign importers," Nam said.
As coffee prices in the Central Highlands are now low, at just around VND23,000 (US$1.21) per kilogram, many foreign companies have begun to buy directly from farmers in large quantities.
Vu Duc Tien, General Director of Tay Nguyen Coffee Export Co., said his company used to be offered bank loans of up to VND500 billion ($26.7 million) every crop to purchase coffee from farmers. But this year banks only agreed to lend the company VND100 billion, forcing it to seek other capital sources.
The Vietnam Coffee and Cocoa Association said it has asked the government to offer interest rate subsidies to local coffee exporters to overcome the difficulties.