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New rice export contracts halted
The nation's rice exports totalled nearly 5.6 million tonnes in the first 10 months of the year, earning US$2.35 billion, according to VFA vice chairman Pham Van Bay.
Rice exporters were well on their way to reaching the year's target of 6.5 million tonnes for the entire year, Bay said.
They have also already signed contracts to export up to 6.8 million tonnes of rice this year but had only 1.1 million tonnes stockpiled in reserve as of October 15.
To slow the pace of exports, the VFA has increased the floor export rice price four times in the past two months, to $445 per tonne for 25-per-cent broken rice and $475 per tonne for 5-per-cent broken rice – $75 per tonne higher than rice prices in July 2010.
Pham Quang Dieu, an economist with the Viet Nam Market Analysis and Forecasts Joint Stock Co, called these price levels suitable in light of falling in a number of Asian countries (including leading rice exporter Thailand) and growing demand in markets from the US to Indonesia, Bangladesh and the Philippines.
He agreed that Viet Nam's rice reserves and anticipated yields were insufficient to meet higher demand.
Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said the nation would harvest 40 million tonnes of rice in 2010.
"Without major changes in weather conditions, Viet Nam should be able to export an additional 1 million tonnes of rice before the end of the year while ensuring domestic food safety," said Tan.
Shares fall on both exchanges
Trading was down on the HCM City Stock Exchange, with the VN-Index dropping by 0.35 per cent against last week's value to close at 451.06.
The bourse's value declined strongly by 45 per cent to more than VND549.8 billion (US$28.2 million), with more than 22.1 million shares changing hands.
Decliners largely outnumbered advancers by 138-56.
Select blue chips rose slightly, including Vietcombank (VCB), HCM City Securities (HCM), PetroVietnam Finance (PVF), Pomina Steel (POM), HCM City Infrastructure and Investment (CII), and Phu My Fertiliser (DPM), of which the latter was the most active stock with 1.25 million shares changing hands.
On the Ha Noi Stock Exchange, the HNX-Index declined by 1.58 per cent to close at 111.08.
The market's overall value dropped by 11 per cent over Friday's figures to more than VND312.6 billion ($16 million) with 16.1 million shares traded.
Losers largely outnumbered gainers by 229-49.
PetroVietnam Construction (PVX) continued to be the most active share nationwide with 1.43 million shares changing hands. PVX fell 0.93 per cent to close at an average of VND21,200 ($1.09) per share.
Vinacomin ensures coal supply for power plants
The Ministry of Industry and Trade instructed the Viet Nam National Coal and Mineral Group (Vinacomin) to promote its activities that it has undertaken to ensure coal supplies for power plants.
Vinacomin should set up a team to work with the steering committee on importing coal for the thermoelectric projects, draft plans for importing coal and should monitor transport networks, said deputy minister of industry and trade Le Duong Quang.
Investors at power plants should actively work with the Vinacomin to create a joint strategy for importing coal and ensuring supply, Duong said.
Rubber exports increase 92% in first 10 months
The rubber industry earned US$1.67 billion from 600,000 tonnes of exports since the beginning of the year, according to the Ministry of Agriculture and Rural Development.
This was an increase of 7.7 per cent in volume and 92 per cent in value, the ministry said.
About 90,000 tonnes were shipped in October alone.
Director of the ministry's Information Technology and Statistics Department Nguyen Viet Chien attributed the increased value to high prices.
Since early 2010 the average export price has been about $2,770 per tonne, a year-on-year increase of 84 per cent, Chien said, adding that the jump was due to high demand.
"While the demand for rubber in the world market has strongly increased, the supply from main exporters such as Thailand and Indonesia has decreased due to bad weather conditions," he said.
General secretary of the Viet Nam Rubber Association Tran Thuy Hoa said the goal of $1.3 billion for the whole year had been reached.
"This year, the industry is able to get revenue of $2 billion," she added
Viet Nam currently exports rubber to various markets, including China, Malaysia, Taiwan, North Korea, Germany and the US.
To boost exports, the association continues to encourage companies to improve quality and expand their markets to the EU, the US, and Asia.
Bitexco dedicates nation's tallest tower
The Binh Minh Import Export Production and Trade Co (Bitexco) inaugurated yesterday the country's tallest building to date in HCM City, towering 262 metres.
Bitexco chairman Vu Quang Hoi said the 68-storey Bitexco Financial Tower (BFT), bordered by District 1's Ngo Duc Ke, Hai Trieu and Ho Tung Mau streets, offed grade A+ space with facilities for the most demanding tenants.
Advantages of the US$270 million tower, whose design is said to be inspired by the lotus flower, include a helicopter pad on the 50th floor.
The building is also built to withstand earthquakes that measure up to eight on the Richter scale.
Around 40 per cent of BFT's 37,000sq.m. of office space are under procedures for lease to tenants and contracts are expected to be signed in a month. The chairman said he hoped up to 90 per cent of the space would be leased out over the next 12 months.
Architect Carlos Zapata, whose works include the Cooper Square Hotel in New York and the Soldier Field in Chicago, designed the tower, while the US-Korean Hyundai E&C was its main contractor.
Bitexco was set up in 1985 as a textile and garment firm, and it has since developed itself into a group with diverse activities including real estate, hydropower, mining and investment.
Dong devalution hurts equipment importers
Many manufacturing enterprises in Viet Nam have faced losses recently because of the devaluation of the Vietnamese dong against the US dollar.
The chairman of Sai Gon Paper Corp, Cao Tien Vi, said his company had to pay an additional VND25 billion for US$100 million in equipment it had imported for its expansion plan.
"We have had to accept lower profits for the last three months of the year because we could not raise the prices of our products that were included in contracts signed with customers earlier this year," said Vi.
The owner of a plastic company in HCM City, who declined to be named, said in early September that he had signed a contract to import materials worth $5 million at the exchange rate of VND19,500 per US dollar.
Now he has to pay over VND20,000 for each US dollar received from the bank to pay for imported materials.
"We're sure that we'll incur losses for the products we make with these input materials that were bought at a higher exchange rate," he said.
The chairman and CEO of the Sai Gon Trade&Production Development Corp (Sadaco), Tran Quoc Manh, said the devaluation of the Vietnamese dong had caused higher prices of imported materials, transport charges and workers wages. As a result, total production costs have climbed.
Imported materials account for 30 per cent to 50 per cent of the total production cost, so profits from the increasing forex rate cannot offset the increase in input factors.
Exporters need dollars to pay for imports, so they sell dollars to banks at the formally quoted price. But they have complained that they must pay additional fees to buy dollars at quoted prices from banks.
Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry Co. (PJC), said her company earned $300 million from exports in September and sold the dollars to banks, but now she could not find dollars at the quoted price at banks to import materials.
"Banks say they can't find dollars at the quoted price for PNJ," said Cuc.
Do Duy Thai, chairman of the Viet Nam Steel Co, said the rising price of the US dollar had caused difficulties to VITAS members, as most of the materials for their production are imported.
Thai said they must pay for imported materials in US dollars and sell their products in Vietnamese dong. "To solve this problem, we can do nothing but raise prices on our products."
Animal feed prices rise
Local farmers, who are facing difficulties because of the rising price of animal feed, have not been able to find a solution to the problem, as the animal-feed processing industry has had to rely more and more on imported materials.
Phung Thi Hai, owner of a pig farm in the northern province of Bac Ninh, has been worried about the animal-feed price hikes in the past few months as her farm consumes from 18 to 20 tonnes of animal feed each month.
In September, concentrated feed prices went up by VND200 per kilogramme and mixed feed by VND100 per kilogramme, in addition to another VND80 per kg in early October.
"But it's not easy at all to raise the price for pork. So I would be very happy if I can break even for the year," Hai added.
Feed manufacturers say they have had no option but to raise prices.
Nguyen Xuan Huyen, director of Viet Tin JSC, said the price of materials rose sharply on the world market in the past two months, adding that maize went up from VND4,900/kg to VND6,200/kg while cassava rose from VND4,600/kg to VND5,600/kg.
Hai increased the prices of his products twice during the past two months, from VND7,500 to VND7,800 per kilogramme.
Huyen said higher production caused greater losses.
His animal feed processing line had been operating at 70 per cent of the designed capacity, just "to maintain the staff and the factory's operation," he added.
Exchange-rate fluctuations and material price hikes are the major reasons behind the increases in animal feed prices.
According to the Ministry of Agriculture and Rural Development's Animal Husbandry Department, 30 per cent of the materials for the local feed processing industry are imported.
He added that imported meat had slashed farmers' profits and, at the same time, discouraged the development of support industries for the country's animal husbandry sector.
Fighting to stabilise prices
The local market has encounter price fluctuations in the last quarter of the year, making it more difficult for authorities to stabilise prices of goods and services.
According to the Ministry of Industry and Trade, to keep the CPI index at 8 per cent in 2010 as required by the Government, the country must create a retail network and control prices of essential goods.
By the end of October, a sufficient supply of 12 essential goods, including food, steel, sugar, fertilisers, animal feed, fuels, paper, coal, medicine, cement and salt, had been attained to meet demand in the local market.
The deputy minister of MIT, Ho Thi Kim Thoa, said agencies under MIT and provincial authorities were asked to enhance the market forecasts in order to take proper measures for market stabilisation.
The provincial Industry and Trade departments were asked to coordinate with the departments of Finance, Health, Construction, and Agriculture and Rural Development to make plans to mobilise capital from each locality to implement price-stabilisation measures.
Strong companies and suppliers which have a big market share were expected to be chosen to take part in the price-stabilisation programmes.
Each locality, however, must rely on its particular situation and condition to identify goods that need price stabilisation.
Source: VNS
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