HANOI (Commodity Online) : In an effort to boost global coffee demand and price increase, Vietnam said it plans to stockpile the commodity in a large scale.

According to country’s Agriculture and Rural Development ministry, a plan to extend subsidised loans at 6 percent interest for companies to buy and stockpile coffee at 1.24 dollars per kilogram was awaiting government approval.



Coffee farmers and exporters in Vietnam, world's second largest coffee exporter after Brazil, suffer from falling coffee prices since the beginning of 2010.

The price on the London market of Vietnam robusta beans for May delivery has fallen from $1,361 per tonne on January 4 to $1,280 on March 18.

"Neither farmers nor exporters can sell coffee now," said Vietnam Coffee and Cocoa Association.

"If farmers sell now, they will suffer big losses, but if they don't, they won't have money for their daily lives or their children's school fees."

It said Vietnamese farmers, most of whom live in the country's central highlands, lacked money to invest in their crop for next season.

Vietnam planned to export between 850,000 and 900,000 tonnes of robusta beans this harvest year, which started October 1. The country has exported nearly 500,000 tonnes so far this harvest year.

The exports are believed to have contributed to a worldwide oversupply and driven prices down. Vietnam robusta coffee accounts for 14.3 percent of global output.

Coffee industry analysts expect prices to rise in the long run, as worldwide production capacity is expected to fall behind rising global demand.

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