Vietnam's premier approves coffee stockpiling

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Vietnam's Prime Minister Nguyen Tan Dung has agreed to give low-interest loans of 6 percent to growers and exporters to stockpile as much as 200,000 metic tons of coffee, the central bank said.

The State Bank of Vietnam has been asked to work with commercial lenders to give loans to coffee companies to stockpile beans from the 2009-2010 crop and to help farmers finance a new crop, the bank said on its website. Companies will buy coffee for stockpiling between April 15 and July 15, the bank said.

The Vietnam Coffee and Cocoa Association in January asked the government to provide financial support for stockpiling to help growers prevent losses as domestic and international prices fell, according to a statement from the association.

Coffee output from Vietnam, the world's second-biggest producer, may drop 30 percent in 2009-2010, the association said in January. The country produced 1.16 million tons the previous year.

Prices of Robusta coffee, the variety that accounts for most of Vietnam's production, have dropped 11.5 percent in the past year and last traded at $1,346 a ton on the Liffe exchange in London.

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