Vietnam’s January seafood exports reach US$320 million

In January, Vietnam’s seafood exports gained a revenue of US$320 million, rising 2.3 percent against the same period in 2010.

Exports consisted of mainly frozen shrimp, tra fish and tuna, the Ministry of Agriculture and Rural Development (MARD) said.

The US, Japan, the Republic of Korea, China, Hong Kong (China), Germany and Spain continued to be the largest markets for Vietnam’s seafood products.

Experts predicted the global demand for seafood products will continue to increase sharply. By the end of this year, Vietnam’s seafood exports are expected to reach a record at US$5 billion in revenue. 

World Bank funds housing for 10,000

New houses, roads, lighting and water systems have been built for around 9,400 families in HCM City under a project that received a World Bank (WB) loan of US$426,8 million.

Le Thanh Liem, the project’s director, said 45 apartment buildings in 33 poor areas in HCM City were built for low-income families and fire-prevention programmes were also set up.

He said that when the project was completed, around 1.7 million residents would benefit.

Le Thi Tuyet Mai, a resident of the city’s District 6, said the new infrastructure, as well as a loan from the WB project, had increased her restaurant’s earnings.

Le Hoang Quan, chairman of the city People’s Committee, has told agencies to deal with site delays in order to complete the project by the deadline in 2014.

The WB also offered Can Tho, Da Nang and Hanoi loans to carry out similar projects.

Agribank becomes One Member Co., Ltd

Vietnam Bank for Agriculture and Rural Development (Agribank) will operate as a State-owned One Member Co., Ltd under a decision issued by the State Bank of Vietnam (SBV).

Under the decision, the bank’s charter capital (VND20,708.7 billion) will be wholly owned by the State. Agribank has its own bank account, seal and legal entity under law. Its headquarters is moved from No.2 Lang Ha Street, Ba Dinh district, Hanoi to Lot 2B.XV, My Dinh 1 new urban area, Tu Liem district, Hanoi.

The SBV Governor has asked Agribank to complete necessary procedures and adjust a number of regulations in accordance with the Law on Credit Organisations and relevant laws.

Garment exports total US$900 mil

Export turnover of garment and textile products reached US$900 million in the first month of this year, a year-on-year increase of 10.6 percent.

The Vice Chairman of the Vietnam National Textile Garment Group (VINATEX) Pham Xuan Hong, said it was impressive that export turnover of garments and textiles hit such a high level in the first month while, apparel exports were generally moderate in the first quarter of previous years.

The garment industry had targeted to beat its export milestone of US$12.5 billion this year. 

Viettel jumps into Peru telecom

The military-run Viettel Group has been chosen over the Russian Wynner Systems, Chilean Americatel and Brazilian Hits Telecom Holding to become the fourth telecommunications operator in Peru.

The group was granted a licence by Peru's Private Investment Promotion Agency late last month, allowing Viettel to operate beside Claro from Mexico, MoviStar from Spain and Nextel from the US.

Viettel has unveiled its target to provide free internet services to 4,000 schools in Peru within 10 years, doubling the agency's request. Viettel has also invested in Cambodia, Haiti, Laos and Mozambique.

HCM City extends programme to stabilise prices

The programme to stabilise prices of some staple goods in 2001 will be extended, said the Ho Chi Minh City Department of Industry and Trade.

The 2011 programme will be in effect two months longer than last year and will run from April 1, 2011-March 31, 2012.

Fourteen businesses in Ho Chi Minh City and businesses from other cities and provinces across the country will join the plan for pricing rice, meat, sugar, cooking oil, vegetables and seafood.

Also in 2011, the Ho Chi Minh City People’s Committee will arrange a conference to review the eight years of the programme’s implementation.

Free trade brings benefits and challenges

The Free Trade Agreement (FTA) is a double-edged sword as it brings both opportunities and challenges to Vietnamese exports, said economic experts.

Dr. Nguyen Minh Phong from the Hanoi Institute of Socio-economic Development said that the FTA signing has provided Vietnam with an equal position on all aspects with member countries in the agreement and as a result, the country’s exports have seen remarkable improvements in turnover, products and markets year by year, except 2009 when the world suffered an economic crisis.

According to the Ministry of Industry and Trade (MoIT), Vietnam’s total export turnover reached nearly US$63 billion in 2008, doubling the figure of 2005, and increased to over US$71.6 billion in 2010.

The FTA has not only affected Vietnam’s export turnovers but also helped create impressive developments in economic cooperation between Vietnam and other countries.

The impacts of the Vietnam-US Bilateral Trade Agreement (BTA), an agreement similar to the FTA, on the two countries’ economic relations were cited as an example.

In 1995, two-way trade between Vietnam and the US reached only US$450 million but rose to US$18 billion 15 years later. Vietnam’s exports to the US earned over US$12 billion in 2009, ten times higher than the figure of 2002 when the BTA took effect. At present, the US is Vietnam’s largest export market and investor.

After the US, Vietnam’s export to ASEAN has also remarkably increased with US$11 billion in 2010, up 19 percent over the previous year. The result was attributable to a tax reduction to 0-5 percent for almost all commodities exported to the ASEAN market as committed in the ASEAN-China Free Trade Agreement, which became effective in early 2010.

Similarly, commitments on tariff preferences in the Vietnam-Japan Economic Partnership Agreement, which come into effect in October 2009, helped Vietnam earn US$1.2 billion from garment exports to Japan for the first time in 2010, an increase of 20 percent against the previous year.

Regarding challenges for Vietnam, Phong noted that the first challenge Vietnam is facing is the risk of an increasing trade deficit due to weak competitiveness and restrictions on price, technology and product structure.

In 2008, Vietnam’s trade deficit was US$17.5 billion, quadrupling the figure of 2005, and mainly from China, which accounts for over 90 percent of Vietnam ’s total annual trade deficit since 2005.

In the coming time, Phong said that FTAs will have greater influence on Vietnam’s export activities as the agreements’ deep tax reduction roadmaps are approaching deadlines, trade liberalisation will be clearer and technical barriers will become more diversified and complex.

To overcome this challenge, Vietnam should speed up its economic restructuring, develop supporting industries, areas and products where it has a competitive edge, and improve its import-export structure and position in the global value chain, he stressed.

According to MoIT, Vietnam hasn’t yet signed a FTA with any single country but joined ASEAN to sign and implement a series of FTAs with six partners in East Asia, including the ASEAN-China FTA (ACFTA), the ASEAN-Korea FTA (AKFTA), the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP), the ASEAN-India FTA (AIFTA), and the ASEAN-Australia-New Zealand FTA (AANZFTA).

At present, Vietnam is joining in negotiations on several other FTAs, including the Trans-Pacific Partnership Agreement (TPP), the ASEAN-EU Free Trade Agreement, the Comprehensive Economic Partnership Agreement with Japan, the Vietnam-Chile Bilateral FTA and the Vietnam-EU Bilateral FTA.

Prospects of Vietnam’s retail market

Since 2009, Vietnam has opened its distribution market to foreign investors based on its WTO commitments and domestic retailers are trying their best to stand firm on their own turf.

Experts said Vietnam has great potential for retail and service markets. This sector is expected to create US$20 billion and increase by 30 percent per year.

Recently, administrative agencies and businesses paid much attention to building a retail distribution system, which was regarded as the core of an economy. This was discussed before and after Vietnam’s entry to the World Trade Organisation (WTO). 

At that time, economic experts said domestic retail businesses should dump goods to control market before foreign distributors’ entry when Vietnam entered the WTO.

So far, some of Vietnam’s retailers have built their own trade names and raise their capacity to compete with international partners. However, they still face a number of snags in their operation, particularly in rural areas.

Expert Pham Chi Lan said: “The business infrastructure is very important. It is a directly competitive factor in domestic trading”.

Vietnam is among the most attractive retail markets in the world. The huge retailers, such as Walmart (the USA), Carrefour (France) and Tesco (the UK) are very interested in Vietnam’s retail market prospects.

It is urgent to establish a strong retail network to stop the flow of bad quality and fake goods illegally smuggled through the borders into Vietnam, they argued.

Nguyen Thi Hong Huong, General Director of the Vietnam Textile and Garment Group (Vinatex) shared her idea about an effective distribution system. “We have tried to combine domestic producers with the trade names and pledged to improve our product quality and reduce prices through a series of promotional campaigns”, she said.

Tran Tuan Anh, Deputy Minister of Industry and Trade said: “The domestic retail market has different scales and demands based on local development levels and requirements. So, to ensure sustainable development of the retail market as well as investors’ benefit, we must take local requests into consideration”.

Vietnam’s retail sector accounts for 20-22 percent of the nation’s total retail market (compared to 55 percent in Thailand, 60 percent in China and 60 percent in Malaysia). Economic experts said 2011 will see a booming retail market in Vietnam.

Coffee price exceeds VND40,000 per kilo

The coffee price on the Central Highland provinces reached VND40,200 per kilogram on February 4, up VND1,000 compared to the days before Tet and a record price for recent years.

The price of robusta coffee in the London market was US$2,239 per tonne on February 3, the highest since the beginning of this year, and this made the world coffee market hotter.

In Vietnam, coffee buying and purchasing were delayed because farmers are taking time off for the Tet holiday. This impacted the coffee exchange in London and partly contributed to raising the price.

Entrepreneurs said the record high price of coffee, along with the farmers’ expectation of a higher price will make the coffee supply scarce, while the exporters’ demand remains high, thereby raising the price of coffee.

FDI attraction to focus on project quality in 2011

The Ministry of Planning and Investment (MPI) has set a target to attract US$20 billion in foreign direct investment (FDI) and increase FDI disbursement to US$11.5 billion.

The country attracted only US$187.6 million in January, equivalent to 15.7 percent of that in the same period in 2010. The processing and manufacturing industries took the lead with US$70 million invested in 15 projects, followed by construction with US$63.6 million invested in 9 projects.

According to the MPI, Vietnam will focus on improving the quality of FDI projects.

In 2010, Vietnam attracted FDI of US$18.59 billion and disbursed US$11 billion.