The Ministry of Agriculture and Rural Development has asked the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production to consider such a proposal.
The department is looking into the current status of coffee and pepper storage before giving its official reply to the proposal made by the two associations, said Doan Xuan Hoa, deputy head of the department.
This is not the first time such a proposal has been put forward. Previously, when coffee prices went down, Vicofa sought permission for temporary storage of 300,000 tons of coffee in order to push up prices.
Similarly, in 2011, the Vietnam Sugarcane and Sugar Association (VSSA) suggested the Government offer interest rate support for temporary stockpiling 200,000 tons of sugar over six months.
As for VPA, this is the first time the association has made such a proposal.
Pepper farmers experienced a poor crop this year and harvested only 88,000-99,000 tons, a drop of 20%. If farmers continue to sell their products cheaply, they would suffer losses when pepper prices go up later in the year.
“The proposal for preferential loans for coffee and pepper retention is just the first step. Whether it is approved or rejected depends on the Ministry of Agriculture and Rural Development,” said Hoa.
In the first four months, Vietnam exported 56,000 tons of pepper worth US$370 million, up 15% in volume and 17% in value over the same period last year. The average pepper export price in the first quarter was slightly above US$6,620 per ton, down 3.4% year-on-year.
Meanwhile, around 608,000 tons of coffee was exported in the first four months, bringing in more than US$1.3 billion, down 13.4% in volume and 11% in value. The average coffee export price in the first quarter was US$2,160 per ton, up 4.4% year-on-year, according to the agriculture ministry.