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Vietnam to export 7.5 mln tonnes of rice

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Rice exportThe total volume of exported rice from Vietnam this year is estimated to reach 7.5 million tonnes, according to the Vietnam Food Association (VFA).

The association has forecast that 2.2 million tonnes will be shipped abroad in the third quarter and 1.8 million in the fourth quarter.

The VFA presented the figures during a July 5 conference in the Mekong Delta city of Can Tho .

It said that based on stockpiles and the output of the recent crops, the total volume of rice waiting to be sold is 5.3 million tonnes.

It was also reported that the country’s accumulative amount of exported rice in the first six months of this years is nearly 3.5 million tonnes, worth 1.5 billion USD, representing a year-on-year rise of 2.55 percent in volume, but a 2.04 percent decline in value due to falling prices.

The total rice inventory is now over 1.65 million tonnes, the VFA added.

Obvious changes were seen in the rice export market during the January-June period, with a decrease in orders from traditional markets. Asia was still the largest destination for Vietnamese rice, accounting for 61.95 percent (down 6.6 percent), followed by Africa with 23.74 percent (up 1.32 percent).

In the first six months of this year, rice export was higher than recorded in the same period from 2012, but still lower than expected due to the market underperforming in June.

Consecutive drops in price also affected the first half of this year, with value decreasing from 410 USD per tonne in January to 365 USD per tonne now.

Meanwhile, Vietnam has also began implementing a plan set by the Prime Minister to hoard up to one million tonnes of rice for this year, the association confirmed.-VNA

Second commodity exchange opens in Vietnam

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The Ministry of Industry and Trade on May 3 issued a licence to the INFO Commodity Exchange (INFO) owned by Ocean Group.

The INFO exchange, the second of its kind in the country, will trade in steel, rubber, coffee and agricultural goods.

It will provide a direct channel between manufacturers and the market to end speculation of goods prices. It will regulate commodity standards, link the domestic and international markets, and integrate the Vietnamese goods market globally.

INFO will help Vietnamese businesses, in particular farmers, boost production and their competitive capacity in the global market.

The world’s first commodity exchange was established in 1948. There are 50 exchanges in the world, 30 from Asia.

Vietnam’s first commodity exchange is in Ho Chi Minh City.

VNA

Vietnam has imported coal for several years: official

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Coal vietnamCoal exporter Vietnam imported the fuel last month but it was not the first-ever shipment as previously reported by local media, an industry official said Monday.

“The 9,500-ton shipment from Indonesia in June 2012 was not the first; Vietnam started importing coal around five years ago with an annual volume between 400,000 and 500,000 tons,” Le Minh Chuan, general director of state mining group Vinacomin, said at a meeting Monday.

Chuan said it was necessary to purchase coal even though the country is an exporter itself.

“In 2011 the country is set to produce 44 million tons of coal, but local demand is 27.5 million tons so we haveto export 16.54 million tons,” he said. “If we kept the coal, there wouldn’t be enough storage space for it.”

Explaining the imports, he said the country needed to purchase coal to “make acquaintance with trading partners and prepare for infrastructure.”

It was not the first time Vinacomin has defended its coal purchase over the past few weeks. Since the shipment from Indonesia arrived on June 13, critics have said the group should have halted exports to ensure local supply so that it does not have to depend on foreign sources.

Vinacomin officials, however, argued that the cheap imports would be used to power local steel and cement plants while Vietnamese coal is of higher quality and thus better suited for export.

Chuan said at Monday’s meeting that the company would continue to import the fuel this year.

According to news website VnExpress, Vinacomin plans to import about 10 million tons of coal in 2012, and this is expected to gradually increase to 100 million tons by 2020.

Vietnam is set to face a serious coal shortage in 2020, with a shortfall of up to 66 million tons.

Commodities trade may expand

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HCM CITY — Pepper, sugar and cotton fibre may be listed for trade on the Viet Nam Commodity Exchange (VNX) under a proposal by the Ministry of Industry and Trade (MoIT).

At a seminar held on Tuesday in HCM City, participants agreed that these items would satisfy the diverse needs of commodity traders.

Vu Hong Son, general director of Ocean Group, said the commodity exchange contributed against price speculation as prices were based on transparent supply and demand.

“Trading on the exchange also helps link the domestic market with the international market,” he said.

Currently, MoIT licenses VNX for transactions in coffee, rubber and steel.

Pepper, one of the commodities that should be listed in the future, has one of Viet Nam’s highest export turnover rates.

Although the volume of Vietnamese pepper can influence world prices, the price of Vietnamese pepper is based on pricing information at India’s Kochi Commodity Exchange.

If pepper is traded on a domestic commodity exchange, it will help prevent price-related disadvantages for farmers and risks to businesses.

It would also help ensure the rights of farmers before world prices begin to fluctuate, and it would increase the prestige of Vietnamese pepper with its global partners.

The seminar, held by MoIT’s Domestic Market Department, in collaboration with EU-Viet Nam Multilateral Trade Assistance Project III, was attended by ministry officials, associations, research institutes and HCM City’s Department of Planning and Investment and Department of Industry and Trade.

For the important textile and garment sector, the amount of domestic cotton and raw fibre materials has not met production demand.

Seminar attendees said if these goods were listed on the commodity exchange, industrial development would be promoted.

Son said the listing would help minimise price risks and thus encourage farmers to grow and expand their cotton areas, providing much-needed materials for the textile and garment sector.

In addition, the commodity exchange would limit farmers’ dependence on small-scale purchasing agents, and would ensure long-term benefits for farmers and businesses as well.

For sugar products, the most challenging problem is the difficulty of finding buyers, which discourages sugar investors from increasing capacity.

The commodity exchange would help the sugar sector cut costs for storage and find more raw materials to purchase.

Do Ha Nam, chairman of the Viet Nam Pepper Association, said the country was a leading agricultural exporter but it faced too many problems in developing trade.

He said the commodity exchange for these items was vitally necessary.

“Vietnamese pepper farmers use information at India’s Kochi Commodity Exchange to regulate their prices because there is no domestic commodity exchange for them,” he added.

Commodity trading activities in the country are not that robust because of a lack of large enterprises and diversity in multi-sectors, according to Nguyen Phuong Dung, head of the Domestic Market Department’s VNX operation management office.

She suggested that State management agencies draft a Commodity Exchange Law and establish an agency that would be in charge of managing operations of the VNX.

State management agencies also need to offer training and raise awareness about commodity exchange activities to businesses and investors.

Nguyen Duy Phuong, general director of VNX, said commodity exchanges were a new concept for Viet Nam.

The prices of agricultural commodities are often driven by derivatives on the world market.

Companies expect a domestic intermediary to form an entity to regulate the market, hedge price fluctuations, and stabilise business operations.

VNX, established in 2011 with charter capital of VND150 billion, is an organised commodity exchange for all individuals and institutions.

It acts as bridge to provide information to help businesses quickly access market demands, reduce marketing costs, cut transportation costs, and link the production process with market demand.

A legal framework has not yet been completed for the commodity exchange, a topic that was discussed at the seminar.

Phuong said the ministries of Planning and Investment and Industry and Trade should issue documents to help guide foreign investors’ participation in the commodity exchange in Viet Nam, in an effort to increase the number of investors and transactions. — VNS

Vietnam-India trade hits US$1.85 bln in six months

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Vietnam TradeTwo-way trade between Vietnam and India achieved US$1.85 billion in the first half of this year, according to the Vietnam General Department of Customs.

Notably, bilateral trade deficit fell 45 percent compared to the same period last year to US$335 million.

Of the 23 types of goods Vietnam exports to India, 14 have recorded high growth in volume, including rubber, computers, electronic products, chemicals, and cell phones. 

Agricultural products also continue to show increased export volumes. 

Vietnam imports 33 items from India, of which 17 reported considerable growth. The value of imported maize increased 88 percent to US$192 million. 

Cattle feed imports showed a sharp decrease to only US$172.2 million, down 48 percent against the same period in 2011. 

Source (VOV)

Business confidence grows after economic recovery in Q2Y2012

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The Vietnam’s Business Confidence Index (BCI) in the second quarter of this year rose seven points over the previous quarter.

According to a survey conducted by World Vest Base Financial Intelligence Services Company Vietnam (WVB FISL), the index was 20 points higher than the third quarter in 2008 when it was first compiled, showing that the country’s business community has confidence in the country’s economic recovery.

The survey, which was carried out from June 15 to the first week of July, covered 154 Vietnamese enterprises operating in 11 major industries who currently take the lead nationwide in terms of total assets, turnover, brands and number of employees. More than 50 per cent of them are small- and medium-sized enterprises.

It revealed that more than 44 per cent of businesses said that Vietnam’s economy is now healthier, almost 36 per cent said it stays the same and more than 20 per cent said it is now worse than last year.

For the next 12 months, 71 per cent of respondents said they believe it will get better, while only 3 per cent are worried about further economic gloom.

Worthy of note is that nearly 71 per cent of those interviewed said that they expect to do even better in 2011, nearly 25 per cent thought the economy will remain stagnant while 4.5 per cent are worried that they will face tough times over the next 12 months.

Nearly 51 per cent have plans to keep their labour force intact, 35 per cent said they will recruit more employees, while 14 per cent said they will lay off part of their labour force.

Most of the respondents said that the procedures they have to endure to access credit, along with inadequate tax policies, are the worst difficulties they have to face with.

On top of that, many said that the amount of fake goods that are currently flooding the market is their greatest concern, because of their poor quality. This results in companies losing their prestige with consumers and their brands become associated with inferior products.

As for factors that will affect business operations in the second half of this year, many respondents pointed to inflation, economic instability, difficulties in accessing capital and falling consumer demand.

Vietnam economy to grow 5.2%-5.7% in 2012 vs. 5.89% in 2011: Prime Minister

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Vietnam’s gross domestic product will likely grow between 5.2% and 5.7% in 2012 as the government continues focusing on inflation control towards sustainable growth for the rest of this year, said Prime Minister Nguyen Tan Dung.

 This is a “reasonable” growth rate, the government chief said at a meeting on Wednesday. The country’s economic growth target was initially set by the National Assembly at 6%-6.5%.

PM Dung also admitted that the local economy expanded at a lower-than-expected rate in the first half of this year, but he attributed the situation to the government’s top priority to tame inflation.

The government targets a higher economic growth rate of between 6% and 6.5% for next year, so as to make impetus for the following years to secure an average annual GDP growth goal of 7% in the 2011-2015 period.

The GDP growth reportedly decelerated to an annual pace of 4.38% in the first half of this year, the lowest for the same period in the recent three years, as local firms faced a lot of difficulties in production and businesses, plus the rising inventories amid weak purchasing power.

The growth has started recovering since the second quarter, with the GDP growth picking up to 4.66%, from 4% in the first quarter, though it was still low compared to an estimated growth of 5.67% between April and June of 2011.

The government is seeking to boost lending at commercial banks, which dropped 0.2% in the first five months, by an average 2% a month for the rest of this year, aiming to support local firms to revive production and businesses to spur economic growth.

Vietnam’s economy expanded 5.89% in 2011, slowing from a growth of 6.78% in 2010.

(Source: VnEconomy)