Southern sales ignite property market

The real estate market in the south is showing signs of recovery as high prestige projects get off the ground, according to independent market watchdogs.

Investors are now ready to pour money into projects that offer reasonable prices and are located in favourable sites in Ho Chi Minh City and neighbouring provinces.

Late last week, the Dong A Dat Xanh Company, for example, launched sales of 41 apartments at its Gia Phu Khang project in Thu Duc district, which sold out within one hour.

Similarly, the Nam Long Investment Joint Stock Company last week also began selling 161 apartments at its Ehome 3 Tay Sai Gon project in Tan Binh district, with each selling for 710 million VND (33,800 USD).

In the morning that the company launched sales, it received deposits for 32 apartments.

The Gia Tan Huong property project in Tan Phu district sold 80 percent of the total 100 apartments put on sale within the first two weeks.

Sales of land plots at the Nhan Phu project of Phong Phu Company have seen all 51 products ordered.

Projects in neighbouring provinces have also been selling well.

In Binh Duong province, Mecamex IJC and Tac Dat Tac Vang companies together recently launched the sale of street houses in the Prince Town Project. All 50 houses were ordered immediately.

The Kim Oanh Real Estate Company has also sold nearly 1,000 land plots in Binh Duong province.

Market analysts said projects that are selling well have shown good construction progress, with many finished products.

These projects have also attracted investors with high prestige.

On the other hand, many other developers of property projects have tried to sell their products by offering attractive promotions, but most of them remained unsold.

Hoang Anh Tuan, general director of Tac Dat Tac Vang Company, said the property market is recovering but still has problems.

Many investors have lowered prices and even taken losses, but customers are reluctant to buy because they lacked confidence in them, Tuan said.

Vietnamese businesses seeks stronger foothold in Lao market

Among the countries neighbouring Vietnam , Laos has been named as a particularly attractive destination for Vietnamese investors who are looking to do long-term business in the region.

The HCM City Investment and Trade Promotion Centre (ITPC) and the Lao Consulate in HCM City recently held a conference to introduce investment opportunities in the Lao market and promote trade and tourism in the city.

Vietnam has a lot of potential to penetrate the Lao market, as a great number of overseas Vietnamese live and work in the friendly country, said ITPC Director Pho Nam Phuong.

She cited the fact that two-way trade between Vietnam and Laos was estimated at 520 million USD in the first half of this year, representing a year-on-year increase of 11.6 percent. However, Vietnamese exports to Laos only account for 16.4 percent of the country’s imports, and include steel and iron, petrol, vehicles, machinery, spare parts, coal and textiles, a ccording to Vietnam ’s Trade Mission in Laos.

The ITPC will organise the 2013 HCM City Investment, Trade and Tourism Exhibition from July 22-26 and a survey trip to Laos from July 22-25.

The programmes prioritise businesses operating in the garment, cosmetics, household products, food, electronics and construction materials sectors.

Besides trade, Vietnamese businesses also chose Laos as destination for their investment.

Lao Government statistics show that Vietnam has 224 valid investment projects in Laos , with a total registered capital of over 4.2 billion USD.

Ministry projects cross-sector growth

Viet Nam's GDP was forecast to rise 5.5 per cent next year while CPI was to increase 7 per cent, the Ministry of Planning and Investment said.

In a document containing guidelines on setting up socio-economic development plans in cities and provinces next year, the ministry forecast a number of economic indices in the second half of the year.

This year, accordingly, Viet Nam would run a US$9 billion trade deficit as it was expected to reap $127 billion from exports, up 10.9 per cent over last year, and it was foreseen to spend $136 billion to import goods and services, up 19.5 per cent.

Index of Industrial Production (IIP) was expected to surge from 5.5-5.7 per cent this year, driven by stable growth of petroleum, electricity, cement, steel and iron, fertiliser, garments and textile sectors.

The agriculture, forestry and fisheries sector was seen to have continued facing many difficulties this year but it would meet the set target of 2.8 per cent growth, including 2.7 per cent growth of agriculture, 5.8 per cent growth of forestry and 2.7 per cent increase of fisheries.

Services and retail sales are expected to increase by 6.3 per cent and 16 per cent this year respectively.

Under the ministry's calculation, total public development investments this year would be equal to 29 per cent of GDP.

Earlier, the World Bank forecast Viet Nam's GDP would reach 5.3 per cent while HSBC saw the country's GDP rising to 5.1 per cent and City Bank predicted GDP growth would be 5.2 per cent this year.

The ministry said the country would focus on restructuring the economy to increase its effectiveness, ability and competitiveness in the months to come.

To the end, the ministry would submit the plan to the Government this September. The Prime Minister would assign duties for ministries and localities based on the approved plan before November.

Kienlong Bank moves to new headquarters

The State Bank of Viet Nam has given permission to the Kienlong Commercial Joint-Stock Bank (Kienlong Bank) to move its head office.

Accordingly, the bank's new address is now No 16 – 18 Pham Hong Thai Street, Vinh Thanh Van Ward, Rach Gia Town, southern Kien Giang Province.

The bank is required to carry out the procedures for changing its head office in line with the Law on Credit Institutions.

MobiFone offers discounts for roaming fees

MobiFone Viet Nam started cutting its tariffs on roaming services in 58 countries and territories on July 1, to meet its customer's growing demand for services whilst overseas.

The new tariffs offer discount rates from 5 up to 45 per cent from the current roaming charges. For example, the roaming service in Hong Kong, Taiwan and the UAE has seen a cut of 45 per cent, Russia: 35 per cent, Switzerland: 27 per cent, Malaysia and the Philippines: 22 per cent, the United States: 12 per cent, Japan and France: 9 per cent and Cambodia and Laos: 5 per cent.

MobiFone also offers three unlimited data packages for mobile internet services in nine countries and regions. To date, MobiFone is a partner with nearly 400 networks in 140 countries and territories.

53,000-tonne cargo vessel signed over to Thai company

The Ha Long Shipbuilding Company handed over a 53,000-tonne cargo ship to Thai shipping services company, Thoresen Thai on Thursday.

The cargo ship, named Thor Breeze, is the last in a series of ten king-sized vessels that the Vietnamese shipyard has been building for its foreign partners. It is 190m long and capable of travelling at 14 nautical miles per hour. Designed by Danish firm Carl Bro, the ship is equipped with modern facilities to meet regulations of the international register of shipping and latest international maritime conventions.

Domestically-made gantry crane gives port a lift

A giant rubber-tyred gantry crane domestically-produced by Doosan Heavy Vina has swung into action at Da Nang port.

The 145-tonne crane, which is 27 metres high, 25 metres long and 11 metres wide, is capable of moving cargo containers weighing up to 40 tonnes. The Vietnamese crane was designed and manufactured by Doosan Vina under the Government's policy to localise mechanical products.

This is the third crane produced by Doosan Vina. The first two - with the same tonnage - were installed at Sai Gon port.

Information disclosure set to go digital

The State Securities Commission has started training courses on the use of its Information Disclosure System (IDS) for public companies in the north.

IDS is part of the Viet Nam capital market development project sponsored by the Luxembourg government and implemented by Viet Nam's Ministry of Finance and State Securities Commission (SSC).

The IDS will receive reports from public companies sent to the SSC in electronic form and analyse the data.The system has three main functions of receiving, processing data and generating statistics.

SSC vice president Nguyen Thi Lien Hoa said, "Information disclosure to the commission used to be done on hard copy with a huge amount of data, causing the companies a lot of difficulties."

IDS would help businesses reduce procedures, costs and avoid delays in disclosing information, she added.

In addition, the system will strengthen the SSC's capability of monitoring what happens in the market and improve its forecasting ability to save investors from losses.

"The application of information technology in the stock market is crucial for the Vietnamese market to practise international standards," the SSC stated.

Public firms have a week from today to register with the IDS, and the commission will issue accounts and information on how to use the system from July 22 to July 26.

In case an error occurs inside the system, both the SSC and the companies will work to resolve it via conventional methods of email, fax or post.

Currently, the Ha Noi Stock Exchange owns an online information management system called CIMS.

The SSC explained that the IDS was not compatible with the technology used by CIMS and they could not be combined.

However, it pledged that companies would only have to disclose information to one agency once the IDS was up and running.

HCM City land auction expected to drag prices downward

The price of land plots in HCM City, especially in District 2, will likely continue to fall as more land is put up for auction, according to a source from the city's People's Committee.

The auction will include at least 1,054 land plots, formerly reserved for residents who had to resettle because of the new Thu Thiem Urban project in District 2.

The plots are those that were left over after resettlement of residents was concluded, according to a report in the Lao Dong newspaper.

The People's Committee's decision is expected to lower prices on the entire market.

Of the total, 202 land plots that cover 5.7ha in the 50-ha resettlement area in the Cat Lai Ward will be sold by the Thu Thiem New Urban Area Investment and Construction Board.

The remaining 852 land plots are in the 30-ha Nam Rach Chiec Resettlement Area in An Phu Ward. They will be auctioned by the District 2 People's Committee.

These two resettlement areas had been built to serve more than 12,000 families whose houses were torn down for the development of the Thu Thiem project.

Market analysts said the sale of more than 1,000 land plots concurrently would influence market prices for land.

In addition, analysts said that because of the sluggish property market, prices would also have to be very soft.

The price of land plots in District 2 has fallen sharply over the last few years.

For example, one square metre was priced at VND90 million in 2008. The same price will now get buyers a little under VND50 sq. metres in the An Phu-An Khanh Urban Area.

Even so, such prices have not attracted many buyers and land sales remain stagnant in District 2.

Dong Nai targets $6.7b in exports for H2

Southern Dong Nai Province's Department of Industry and Trade has reported that the local export turnover surpassed US$5.3 billion in the first half of this year, or a year-on-year rise of $200 million.

Exports recording high growth included computers, electronics, footwear and garments and textiles.

However, most agricultural products declined in revenue year-on-year, especially coffee exports which were down 52 per cent. Provincial major export markets were still the US, Japan and China.

During the first six months of the year, Dong Nai imported products worth over $5.4 billion, mainly were tobacco materials, plastics, machinery, iron and steel.

For three consecutive months since January, Dong Nai ran a trade surplus; and in the past three month, it saw a trade deficit.

According to the provincial Industry and Trade Department, Dong Nai had more than 1,000 operating foreign-invested enterprises which contributed more than 70 per cent of the total provincial industrial production value.

To achieve the target of total export turnover for the year, which was an increase of 12-15 per cent compared with 2012, the province would have to earn more than $6.7 billion in the second half of the year, the department said.

Dong Nai will continue to boost trade and investment promotion as planned, speed up exports of key agricultural and processing products, and focus on emergent markets like India, Sri Lanka and Myanmar.

The provincial Industry and Trade Department helps local businesses to participate in international fairs and trade workshop in Laos in July, a trade fair in Cambodia and a wood products and handicrafts fair in Germany in September, as well as trade promotion activities in Dubai this year.

Steel production lacks mettle

The sluggish real estate market continues to seriously affect domestic steel production, according to the Ministry of Industry and Trade.

The steel market in the first half of this year remained stagnant, with only 1.4 million tonnes produced, a decline of more than 11 per cent year-on-year, the ministry has reported.

Of the total, nearly 745,000 tonnes were produced by the Viet Nam Steel Corporation.

In addition to the weak property market, the ministry attributed the decline in production to cheap imported steel.

Locally produced steel faces stiff competition from steel imports, which are low quality and inexpensive, according to the ministry.

The ministry said the shortage of high-quality iron ore had also caused a slowdown in production.

Prices have fallen by 2-5 per cent compared to one month ago, the ministry said.

Steel bars are priced at about VND13 million (US$620) per tonne, while prices for rolling steel are now VND12.7 million ($604) to VND13.6 million ($647) per tonne.

The ministry predicted that steel production would continue to remain sluggish in the third quarter because of rainy weather in the southern region, which has delayed construction projects.

To help spur domestic steel production, the ministry has urged authorities to strengthen their investigations into illegal steel imports and iron ore exports.

The ministry also plans to work more closely with associations to develop more suitable production and sales plans for local companies.

In addition, the ministry advices companies to find ways to lower prices and improve competitiveness with imported steel.

EU awareness key to export success

Vietnamese exporters should learn well the new European Union rules relating to the bloc's Generalised System of Preferences (GSP) in order to extract maximum advantage, experts said at a seminar held in HCM City yesterday.

The seminar, titled "EU's new regulations on GSP – opportunities for Vietnamese businesses," informed participants of the new rules and their potential impacts on Viet Nam.

In his opening remarks, Dr. Franz Jessen, Ambassador and Head of the EU Delegation to Viet Nam, said: "The strong growth of Vietnamese exports to the EU market is partially attributed to some Vietnamese products enjoying the GSP treatment."

He said that around 49 per cent of Viet Nam's exports of footwear have benefited from preferential tariffs under the GSP regime.

From 2014 onwards, more Vietnamese products, including footwear, can gain further benefits from the new GSP regulations, he said.

The EU officially published its amended GSP regulations last October, saying they aimed to facilitate market access for goods originating from developing countries, including Viet Nam.

The new regulations will take effect early next year.

Viet Nam will remain in the list of countries eligible to enjoy the EU's GSP treatment with an enlarged number of favoured tariff lines.

Nevertheless, the new "graduation" rules may expose a number of Viet Nam's key exports to the risk of ineligibility, the seminar heard.

The GSP is the result of inter-governmental negotiations held under the auspices of the Conference of Trade and Development of the United Nations.

The scheme offers import tax preferences for goods from least and developing countries exported to GSP host countries on a unilateral basis (not reciprocal).

GSP tariffs are lower than those levied under the Most Favoured Nation (MFN) status, and can be reduced to zero per cent, depending on the regulations of the host country.

"Thanks to GSP provided by the EU, many Vietnamese products have been able to compete in these markets, especially textiles and garment, footwear, seafood and handicrafts, thus rapidly increasing Viet Nam's exports to this market," former Trade Minister Truong Dinh Tuyen said at the seminar.

In order to take advantage of the new GSP rules, Tuyen advised businesses to understand well the GSP regulations of each host country (rule of origin, competition, transportation etc) so as to avoid obstacles and potential losses.

They should further improve product quality, diversify product portfolios, and reduce production costs and prices in order to enhance the competitiveness of Vietnamese products, he said.

Vietnamese firms should also expand and further diversify their export markets, avoiding dependence on just one market, he added.

Industry associations, especially those who have a large proportion of their products exported to the EU, should disseminate timely information to their members on emerging difficulties, and work closely with their members in adopting measures necessary to maximise the performance of each business and the industry, Tuyen said.

He said local businesses should also be aware that in many host countries, the list of products and tariffs under the GSP are not fixed but adjusted periodically, thus affecting the firms' ability to penetrate the market as well as production in exporting countries.

EU-Viet Nam bilateral trade totaled US$29 billion last year, a year-on-year increase of nearly 20 per cent; and accounting for 12.7 per cent of the country's total import-export turnover.

Last year, Vietnamese exports to the EU amounted to $20.3 billion, a 22.7 per cent increase over 2011, accounting for 17.7 per cent of the country's total export value. The EU is Viet Nam's second largest export market to date, Tuyen said.

Industrial parks to get public amenities

The Ministry of Construction has proposed a pilot project to construct cultural, educational and public amenities for employees in industrial parks (IPs).

The project is expected to benefit about 20 percent of workers in IPs by 2015 and 50 percent by 2020.

The ministry has selected 14 provinces and cities nationwide to pilot the scheme including Ha Noi and HCM City.

The facilities will include schools, sports grounds, medical stations and hospitals, libraries, museums and theatres and markets and shopping centres.

According to the ministry, at the end of 2012, there were 298 IPs in 58 provinces and cities nationwide, with about 1.6 million workers and 600,000 others providing indirect services.

A survey conducted in 98 IPs with 837,200 workers showed only six percent of IPs have cultural and sports facilities. The rate of medical facilities is even lower at three percent.

Viet Nam earned US$170.18 million from tra fish exports to the US in the first five months of the year, making it the country's largest tra fish importer.

The Viet Nam Association of Seafood Exporters and Producers said the export turnover rose 16 per cent over the same period last year, more than the EU which used to be number one.

In May alone, the US imported tra fish worth $56.9 million, representing a year-on-year increase of 72 per cent and accounting for 24 per cent of the total.

The rise in tra fish exports to the US was despite an increase in anti-dumping duties on tra fish fillets from Viet Nam.

The EU now ranks second, accounting for 22.4 per cent of the total as its export to the US fell to $159 million, down 15.6 per cent over the corresponding period last year.

Meanwhile, there were increase in both volume and value of tra exports to Southeast Asia, Brazil, mainland China, Hong Kong, Saudi Arabia, Mexico and Colombia.

Statistics from the General Department of Customs showed export earnings from tra fish in May reached $174.09 million, up 15.7 per cent over the same month last year. However, exports in the five-month period fetched $708.89 million, down 1.5 per cent year-on-year.

Earlier, the association forecast tra fish exports would bring in $1.9 billion by year-end, surging 5.5 per cent year-on-year.

Meanwhile, experts say tra fish business should meet stricter hygiene and registration conditions to guarantee quality and improve management.

There should also be more co-ordination among tra fish farmers, processors and exporters, they said.

Banks gloomy as annual profits dwindle amid negative indicators

Banks are pessimistic about their profitability this year, with several indicators in steady decline, according to the central bank.

The State Bank of Viet Nam (SBV) recently reported that in the first quarter the banking sector's return on assets, which measures the profitability of assets, was down by half year-on-year to just 0.23 per cent.

State-owned banks saw the steepest decline in ROA – from 0.76 per cent to 0.29 per cent.

Joint-stock banks' ROA decreased by 0.04 per cent to 0.18 per cent.

Return on equity, which measures the efficiency of capital in generating returns, also went down significantly to 2.52 per cent from last year's 3.97 per cent.

Again, the State sector was the worst performer, with the ratio plummeting from 11.37 per cent to 4.23 per cent. Joint-stock banks saw ROE increase from 1.36 per cent to 1.95 per cent.

SBV officials blamed the decrease in the rations on difficulties that banks faced like weak credit growth and steady cut in loan interest rates.

The central bank's data also shows that the spread between average lending and deposit interest rates was only 1.93 per cent after deducting bad debt provisions, much lower than the 2.33 per cent achieved late last year.

As a consequence, banks saw their performance decline relentlessly, with 24 of them reporting losses and 57 others seeing profits fall from the same period last year.

There are over 60 banks in Viet Nam.

Petroleum, metals key exports to Laos

Petroleum, steel and iron account for the biggest portions of Vietnamese exports to Laos, Vietnamplus has reported.

The two-way trade between Viet Nam and Laos was estimated to have reached US$520 million in the first half of 2013, 11.6 per cent higher than expected.

In the Jan-May period, bilateral trade reached $434 million, up 5.6 per cent year-on-year.

Of this, exports from Viet Nam to Laos were worth $205.4 million, up 16.5 per cent against last year.

A total of $56.3 million was spent on steel and iron, $43.6 million on petroleum, $14.9 million on vehicles and spare-parts and $13 million on electrical wires and cables.

Exports from Laos to Viet Nam reached $228.4 million in the first five months, down 2.6 per cent year-on-year. The major import commodity was wood, worth $147.6 million and accounting for 64 per cent of the total import value.

According to Tran Bao Giam, Trade Counsellor at the Vietnamese Embassy in Laos, it is expected that Viet Nam-Laos bilateral trade will touch $1 billion this year.

He pledged that the two countries would do their best in the second half of the year to support enterprises and speed up trade promotion to reach the ambitious target.

A Viet Nam-Laos trade fair will be held from July 18-22 in Vientiane, with more than 300 Vietnamese booths displaying household electronic products; industrial machinery; agriculture, forestry and fisheries products; garments and clothes; processed food; wooden products; handicrafts; pharmaceuticals and medical equipment.

The fair will be held to promote Viet Nam's image and Vietnamese brands, contributing to further trade between the two countries.

Among the countries that neighbour Viet Nam, Laos has been named as a particularly attractive destination for Vietnamese investors who are looking to do long-term business in the region.

The HCM City Investment and Trade Promotion Centre (ITPC) and the Lao Consulate in HCM City recently held a conference to introduce investment opportunities in the Lao market and promote trade and tourism in the country.

Viet Nam has a lot of potential to penetrate the market, as a great number of overseas Vietnamese live and work there, said ITPC Director Pho Nam Phuong.

She said that despite Vietnamese exports to Laos posting a year-on-year increase in H1, the figure only accounted for 16.4 per cent of the country's imports, according to Viet Nam's Trade Mission in Laos.

The ITPC will organise the 2013 HCM City Investment, Trade and Tourism Exhibition later this month to further explore opportunities for investment in Laos.

The programmes will prioritise businesses operating in the garment, cosmetics, household products, food, electronics and construction materials sectors.

Lao Government statistics show that Viet Nam has 224 valid investment projects in the country, with a total registered capital of over $4.2 billion.

Animal feed price hike hits production

The price of animal fodder rose by 40 per cent in the first six months of this year and is the main reason why farmers are facing serious losses or stopping production altogether.

Nguyen Xuan Duong, head of the agriculture ministry's Livestock Production Department, said that the costs of animal feed in the country is 15-20 per cent higher than in other countries across the region.

Le Ba Lich, chairman of Viet Nam's Animal Feed Association, said the prices of protein and energy feeds have experienced the steepest increase, by 40 per cent, in comparison with the same period of last year.

Meanwhile, the rest are about 10-15 per cent higher, he said.

Le Quang Thanh, director of the Thai Duong Breeding Company, said that animal feeds have to be transferred through two or three intermediaries who can set any price they want before they reache the farmers.

However, the farmers cannot adjust the prices for poultry or cattle according to the rising input costs due to competing with imported products and the demand from domestic customers.

They are suffering an average loss of VND15,000 (US$0.7) on a three-kilo chicken and VND100,000 ($4.76) on a twenty-kilo pig, he said.

Duong said it is the dramatic increase in the prices of animal feeds in the first six months that is giving breeders problems.

Many of them stopped breeding altogether or have cut back their scale of production, he said.

There are a total of 304 million birds and 26.5 million pigs nationwide, more than 2 and 0.52 per cent less than the same period last year respectively, he said.

According to experts and farmers, animal feed companies and their agents are making huge profits due to the soaring prices.

Nevertheless, Lich, does not blame them, but blames the ministry for being irresponsible.

He said the ministry need to publish specific criteria on every kind of animal feed, which would remove the need for inspections by the authorities, as they contribute to the rising cost of animal foodstuffs.

Duong said the department is working with the Department of Price Control at the Ministry of Finance, to put together measures that will reveal the unreasonable prices charged for animal feeds and the mismatch of input and output costs levied by feed companies.

Deputy minister Vu Van Tam said that the ministry, in co-operation with the provinces, would restructure the country's breeding industry so that farmers are protected from unexpected changes in the prices of input materials.

HCM City mulls over housing woes

HCM City is keen to ensure apartments are sold to resolve the property market's inventory problem and enable low-income earners to acquire housing, Nhan Dan newspaper reported.

It quoted Le Hoang Quan, chairman of the city People's Committee, as saying that the inventory has declined by 14 per cent since late last year, falling from 14,490 apartments to 12,445 and a value of nearly VND22.5 trillion (US$1.06 billion).

Of the apartments remaining unsold, 3,625 are fully finished, including 1,000 that measure under 70 square metres and cost less than VND15 million ($700) per square metre.

The city has set a target of selling another 3,000 apartments in the second half of the year and liquidating the inventory in the next three years, Quan said, promising several measures to achieve the objectives.

Tran Trong Tuan, director of the city Department of Construction, agreed with Quan and said the target of selling 30-40 per cent of the remaining apartments by year-end is feasible.

This is because, according to a recent department survey, there are 308 projects that have been temporarily shelved due the lack of funds and authorities would work with developers to raise the required funds, he said.

Significantly, at the under construction projects bookings are very high — at 40 to 90 per cent — he said.

To ensure the plan's success, the department is working with developers of unsold apartments to adopt effective and appropriate solutions, he said.

One of them is a proposal for the city government to permit developers of 90 commercial housing projects with 5,882 units to convert them into low-cost housing.

The conversion process would be closely watched by the department and relevant agencies, he said.

The most important measure, however, would be to help people with low incomes get access to the Government's VND3 trillion ($143 million) preferential credit package to buy housing, he said.

Quan said relevant city departments have been ordered to study the demand for housing among government workers in the health care and education sectors and military personnel.

The construction department and district people's committees have been ordered to help people get bank loans at 6 per cent interest rate from the Government credit package to buy housing, he said.

Tuan said the department would meet with developers and banks once a month to speedily resolve difficulties faced by home buyers.

The agency would also announce the list of low-cost housing projects with their locations, prices, and names of lending to facilitate purchase, he added.

Long-term vision essential for overhaul of agriculture

Long-term planning is needed to improve production and export of farm produce and seafood in the Cuu Long (Mekong) Delta region, Viet Nam's rice basket, Deputy PM Vu Van Ninh told a conference held in Can Tho City yesterday.

Ninh said the agricultural sector faced many obstacles because it lacked long-term planning and had failed to tap its potential.

He urged the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade to propose specific measures, both short- and long-term, to help improve and restructure the sector.

The conference was held to discuss ways to improve farm and seafood exports from the Delta region.

"Agriculture plays an essential part in our country's socio-economic development. It is necessary to re-organise the agricultural production on a demand-supply basis, restructuring crop and breeding to increase effectiveness, thus ensuring national food security," he said.

Detailed planning for each particular agricultural area is needed to improve crops, and more linkages between farmers and businesses are also needed.

Ninh said that government ministries should conduct research to set up a fund to offer financial support for agricultural production.

He also urged that hi-tech be applied to the agricultural sector to increase the incomes of farmers and businesses.

Taking the floor, Vu Van Tam, deputy agriculture minister, said that the sector had been facing many challenges since the beginning of this year, including breakout of diseases after the Lunar New Year, severe drought in the central and Central Highlands regions, and salination in the Mekong Delta.

Low demand as well as falling prices of farm produce and seafood products had affected farmers' incomes, he said.

In addition, weak purchasing power in the domestic market had caused large inventories, leading to lower prices, especially for rice and seafood products.

Export of farm produce and seafood fell by 5.4 per cent and 5.9 per cent, respectively, in the first quarter of this year compared to the same period last year, according to the ministry.

At the conference, Cao Duc Phat, agriculture minister, said: "We have both short- and long-term issues. For example, the low rice price is a short-term issue. But high rice prices and low quality and ineffective production in general are long-term problems."

Rice exports reached 3.485 million tonnes worth $1.504 billion in the first half of this year, an increase of 2.55 per cent in volume but a decrease of 2.04 per cent in value.

The export price on average fell by $20.23 a tonne, according to the Ministry of Industry and Trade.

As of the end of last month, the inventory of rice exports had reached $1.658 million tonnes.

Ho Thi Kim Thoa, deputy minister of Industry and Trade, said the world rice market would experience a further drop in price due to global oversupply of rice.

She reported that Thailand's rice stockpile had reached 17 million tonnes and India's, 35.5 million tonnes.

The demand for rice is uncertain because importing countries' plans have not been announced.

Importing countries are still waiting for prices to fall further due to oversupply of rice on the world market, according to Thoa.

China is expected to be the largest importer of rice from Viet Nam, with 3 million tonnes this year, due to a disparity in price between its local rice and imported rice from Viet Nam, according to the ministry.

Meanwhile, exports of seafood reached $560 million last month, a rise of 8.3 per cent over the same period last year.

Total seafood exports reached $2.861 billion in the first half of the year, an increase of 0.3 per cent year-on-year.

According to the Ministry of Industry and Trade, seafood exports will continue to face many difficulties due to low global demand.

The challenges are also attributed to the US's anti-dumping and anti-subsidy lawsuits on shrimp and tra fish. There are also many more trade remedies being imposed by Japan, South Korea and Mexico.

Thoa has asked commercial banks to continue to cut lending interest rates, increase loan amounts, and extend loan terms for farmers and businesses.

She has asked the Viet Nam Food Association to help businesses so they do not have to sell rice at low prices. This would ensure continuation of export activities.

She also asked exporters to improve production and competitiveness in international trade, and try to expand markets and build brands for products.

Deputy agriculture minister Vu Van Tam asked the Government to instruct relevant ministries and agencies to help with trade remedies and improve promotions.

Tam has asked the Government to draw up more policies to help farmers shift from rice to vegetable cultivation.

He also asked that the Government to advance capital to develop irrigation projects and other agricultural projects.

Also speaking at the conference, Nguyen Van Binh, governor of the State Bank of Viet Nam, said the agricultural sector was a priority of the banking system.

Binh said the banking sector would continue to provide credit to support the production and export of rice and seafood in the Mekong Delta, including the programme to buy one million tonnes of rice for the national reserve.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR