Operators offer cash prizes to drum up travel demand

Many travel firms have resorted to a range of promotional tactics, especially offering attractive prizes such as cash, diamonds and motorcycles, to avert a travel slump.

Free tours and hospitality services, and inexpensive gifts like raincoats and crash helmets are no longer used as baits to boost tour sales. Instead, tour operators have deployed more practical programs with higher prize values.

Many tourism services companies in HCMC like Du Lich Viet, Vietravel, Ben Thanh Tourist, Fiditourist and Saigontourist have launched promotion programs in which those buying tours can enter lucky draws for cash, diamonds or motorbikes.

“Customers prefer cash prizes because they can find it hard to manage time to join free tours after their travels,” said Doan Thi Thanh Tra, marketing manager of Saigontourist Travel Service Company.

Following the success of a similar program in the 2013 Lunar New Year, Saigontourist this summer is putting on cash prizes totaling VND100 million. The company initially printed 80,000 sweepstake tickets and has recently printed an additional 20,000.

Meanwhile, Fiditourist lures tourists with a scratch game. Tourists are given a number of scratch cards proportional to the sum they spend to win instant prizes.

This program began in April and will last until September, with a total prize value of VND2 billion. The highest award is VND50 million.

“In a sweepstake, customers must wait, but in a scratch game, they know results immediately, making them excited and eager for more. The program is very effective,” said Tran Thi Bao Thu, marketing director of Fiditourist.

Bottlenecks in fight against sturgeon smuggling

While Vietnamese producers are suffering disadvantages due to the rampant smuggling in of substandard Chinese sturgeons, the fight against this problem has seen a great hardship given lack of coordination between law enforcement agencies.

Le Anh Duc, general director of Vietnam Sturgeon Company, told the media on Sunday that the Chinese sturgeon holds big market share in Vietnam thanks to its low prices, at just half the local product’s.

Chinese sturgeons are mostly the crossbred species farmed in fresh water. In Vietnam, it takes at least 12 to 18 months to raise crossbred sturgeons while Chinese producers spend only three to six months on sturgeon farming prior to export. Therefore, farming costs in China are much lower than in Vietnam, Duc said.

However, Duc is concerned that Chinese sturgeons contain some weight enhancer residues with this farming method.

Tran Van Hao, chairman of the Lam Dong Coldwater Fish Farming Association, said that authorities should intervene to prevent import of Chinese sturgeons contaminated with weight enhancing substances or antibiotics.

Control on these substances is beyond the jurisdiction of the association. There are around 127 weighting criteria in the world with a testing fee for each substance reaching US$1,000. Meanwhile, China has used many unknown weight enhancers, Hao said.

Duc said Vietnam consumes from 10 to 15 tons of Chinese sturgeon everyday, or 4,000 to 5,000 tons a year. The southern market consumes around 60-70% of the smuggled sturgeon volume.

Nguyen Trong Cu, director of Viet Duc Trade & Investment Company, said that State agencies should bear responsibility for the problem.

For Chinese sturgeons farmed in Vietnam, it is not hard to fight smuggling as sturgeons must be farmed in ponds or lakes and special vehicles must be used to transport the fish. Meanwhile, Vietnam has just a few places that can farm sturgeons, Cu explained.

Duc of Vietnam Sturgeon Company said that the best solution is to ward off sturgeon import by air. If the means of transport is controlled, 60-70% of smuggled sturgeon import can be detected.

Vietnam dragon fruit to go back to Taiwan

After more than four years of disruption caused by melon fly disease, Vietnamese dragon fruit exporters can now resume certain shipments to Taiwan.

Nguyen Xuan Hong, head of the agriculture ministry’s Plant Protection Department, said at a meeting in Hanoi on Monday that Taiwan had yet to totally lift the ban on dragon fruit imports from Vietnam.

Taiwan will send experts to Vietnam to inspect the process of dragon fruit irradiation before it decides whether or not the ban is entirely aborted, Hong said.

However, Vietnam will have to cover the VND500 million cost of bringing the Taiwanese experts here for a three-week inspection. The cost would be mobilized from four Vietnamese providers of dragon fruit irradiation services.

“The department will ask the four enterprises to share the cost to take Taiwanese experts here as soon as possible,” Hong said.

According to the department, Vietnam can export up to 13,000 tons of dragon fruit to Taiwan a year.

Speaking to the Daily, Nguyen Van Nga, director of the Zone 2 Plant Quarantine Sub-department, said China was a big dragon fruit importer of Vietnam besides Indonesia, Thailand and some European countries. In addition, Vietnam’s dragon fruit has made its way to some selective markets like Japan and South Korea.

According to statistics of the sub-department, Vietnam’s quarantined dragon fruit export reached 139,000 tons in the year’s first half, with year-on-year increases of 50%, 40% and 80% in Japan, the U.S. and South Korea respectively.

Vietnam’s dragon fruit export to Taiwan was completely suspended in March 2009 as Vietnam, Thailand, the Philippines, India, China, Myanmar, Nepal, Pakistan and Sri Lanka were the nine countries infected with melon fly disease.

Pepper exporters running out of stock

January-June pepper exports totaled 85,000 tons worth a combined US$552 million as reported by the Ministry of Agriculture and Rural Development, meaning the country has almost no pepper left for export based on the total yield earlier estimated by the Vietnam Pepper Association (VPA).

In April, after doing surveys in Dong Nai, Ba Ria-Vung Tau, Binh Phuoc, Dak Nong, Daklak and Gia Lai provinces, VPA forecast this year’s pepper yield at 88,000-90,000 tons, a contraction of 20% year-on-year. The association ascribed the fall to unfavorable climate conditions and poor productivity of aging pepper farming areas.

As such, with the total volume calculated based on yield and export volume, local farmers only have around 3,000-5,000 tons of pepper in stock now. Meanwhile, local pepper demand is 5,000 tons annually, and the nation won’t have pepper stocks for export in the next few months.

Regarding this issue, Tran Duc Tung, office manager of VPA, said the agriculture ministry’s figure is wrong.

However, according to statistics of the General Department of Customs, pepper exports had reached 62,223 tons as of May 15, bringing home nearly US$409 million, while the figure was 68,000 tons valued at US$446 million, up roughly 14% in volume and 9.6% in value year-on-year as per the five-month report of the agriculture ministry.

The average pepper export price stood at US$6,554 a ton in the first five months, shrinking over 4% year-on-year. The agriculture ministry’s statistics show that export volume surged despite price falls in the last six months.

The same situation also happened to cashew, with exports stronger despite low prices. Vietnam exported more than 115,000 tons of cashew nuts in the year’s first half with a total value of US$723 million, increasing some 16% in volume but only 5.7% in value. The five-month export price averaged out at only US$6,185 a ton, dipping 10.5% over the US$6,913 a ton in the same period in 2012.

But it is different with a number of other farm items, whose price drops hit exports, such as rice and rubber. The January-May export rice price averaged out at US$445 a ton, tumbling 7.7% year-on-year, bringing down local paddy prices to only around VND4,000 per kilo at times.

The five-month average export rubber price was US$2,595 a ton, a decrease of more than 15% over the year-ago period, with natural rubber prices hovering around VND40-42 million a ton.

FIEs suffer from dismal supporting industries

Supporting industries in Vietnam have made no significant progress in the past ten years, causing a lot of hardships for foreign-invested enterprises (FIEs), said Kazuhiko Osato, director of the Japan External Trade Organization (JETRO).

He said, “It is extremely difficult for businesses from our country to find suppliers of items like electronic components and screws for mechanical engineering, automobile manufacturing and information technology.”

Most Vietnamese firms cannot satisfy the high requirements for product quality and delivery set by Japanese enterprises, said Osato at a forum on how to develop supporting industries held in HCMC on Monday.

Vietnamese enterprises active in supporting industries are mainly assemblers. They have yet to create value added components and meet quality standards, he said.

Therefore, he suggested forming an alliance between businesses of Vietnam and Japan. This alliance should aim at four basic industries – molding, metal processing, mechanical engineering and information technology.

JETRO will serve as a bridge between businesses of the two countries, providing Vietnamese companies with information on supply and demand of Japanese firms, sharing market information and organizing business meetings.

From October 10 to 20 this year, JETRO will hold a meeting between Vietnamese and Japanese entrepreneurs.

Peter Opdahl, president of ITO Corporation, specializing in semiconductor technology, circuit board connection and welding technology, said the factory is not the starting point, but it is just in the middle of the process of bringing products to end-users.

When finding chances to launch their products into the market, small enterprises in Vietnam must cooperate with larger companies to join the supply chain by studying their technology, quality and price control, he said.

He hoped the formation of a business alliance would help Vietnamese businesses further engage in the supply chain of ITO as well as other Japanese firms.

Speaking at the forum, many experts said supporting industries in Vietnam were still heavily reliant on processing and assembly due to insufficient investment in research and development and low human resource quality. In addition, State policy support for businesses is not enough, hindering the development of supporting industries.

Le Bich Loan, deputy head of the Saigon Hi-Tech Park management board, said the policy for attracting investment in supporting industries remained unclear and had not addressed the needs of enterprises. Besides, inadequate investment in product quality and limited financial and human resources are the problems that need solving drastically.

VinaPhone, Viettel launch mobile money transfer

Mobile carriers VinaPhone and Viettel have launched a new service that allows users to transfer money by texting.

VinaPhone, Bank for Foreign Trade of Vietnam (Vietcombank) and M-Service began the service on Tuesday, using the existing mobile network of the former. Meanwhile, military-run telecom company Viettel had launched it earlier.

With the MoMo money transfer service in place, beneficiaries can receive money at the nearest MoMo transaction points of VinaPhone. Customers are always updated about all transactions by text messages.

From July 15 to September 30, customers can use the service for free, which is being piloted in southern Vietnam, including HCMC, Binh Duong, Dong Nai, Ba Ria-Vung Tau, Long An, An Giang, Kien Giang, Ca Mau and Dong Thap.

Some 900 MoMo transaction points are already in service in the nine provinces. After the trial period, VinaPhone expects to expand the service to all southern provinces and then central and northern provinces, with the service priced at VND10,000 for a transfer transaction of VND1 million.

Ho Duc Thang, deputy director of VinaPhone, said the service’s target customers are residents in remote areas who have difficult access to banking services.

Unlike money transfer in the banking system, the money transfer limit via the mobile system is VND5 million for one customer a day, without using a bank account.

Similar to VinaPhone’s service, Viettel’s BankPlus has attracted 1.3 million customers up to now. BankPlus customers can transfer money, check bank accounts and pay phone bills without having to install an app or use 3G.

Reportedly there are about 16 million migrant workers in major cities and provinces having demand for transferring money home in the country.

Quang Ninh’s largest fibre project starts second phase

The second phase of a US$300-million fibre factory was started in Hai Yen Industrial park, Mong Cai city, the northern province of Quang Ninh on July 10.

The project, invested by Texhong Ngan Long under Texhong Group, is the largest FDI project so far in the province.

The industrial fibre factory will consist of six workshops with a total capacity of nearly 140,000 tonnes per year. It will be built in three phases with the second phase expected for cooperation in 2015 and the third phase, in 2017.

Two workshops and support facilities have been built in the first phase, and two more will be constructed in the second phase to produce natural cotton and man-made fibre as well as cloth.

According to Chairman of the provincial People’s Committee Nguyen Van Doc, the factory was the first FDI project licensed after Quang Ninh held an investment promotion conference in early 2012.

Overseas remittances increase in first half

Overseas remittances to Vietnam through banks in Ho Chi Minh City hit US$1.9 billion in the first half of this year, 3 percent higher than the same period last year.

The figure for the whole year is expected to reach US$4.5-4.8 billion, higher than the US$4.1 billion figure recorded in 2012, according to the State Bank of Vietnam (SBV).

Normally, overseas remittances to Vietnam climb remarkably during the remaining months of the year as the traditional lunar New Year Festival (Tet) approaches.

Overseas remittances to the country totaled US$10 million last year, the highest –four year level.

Vietnam ranked 9th on the World Bank’s list of top-ten countries that attracted the most overseas remittances last year and ranked 2nd in Southeast Asia.

Statistics show that 4.5 million Vietnamese, including more than 400,000 guest workers, are living in more than 100 countries and territories worldwide and over 80 percent of them were settled in developed nations.

ASEAN shipping conference bound for HCM City

Ho Chi Minh City will host the 11th ASEAN Ports and Shipping 2013 - the largest annual ports, shipping, and logistics exhibition and conference in the region – on July 11-12.

In addition to serving as a platform for ASEAN member states to discuss and analyse the latest global marine transport and logistics challenges and opportunities, this year’s event will focus on developing a roadmap towards highly-competitive shipping and building up a framework for maritime transport service and seaport development in the region during the global integration process.

The event will also offer opportunities to exchange experience in the formation and implementation of Public-Private Partnership (PPP) projects in port development as well as in applying the PPP model to attract investment and provide port services in some regional countries.

With the participation of hundreds of leading companies and corporations in the field, the programme aims to help the business community access information, products, equipment, and advanced technologies to develop a strong and modern system of marine transport among regional countries.

A two-day exhibition will be held to showcase containerised transport related products and services.

Mekong Delta nears half target rice stockpile

According to Vietnam Food Association, businesses have completed purchase of more than 400,000 tons of rice under the Government Rice Stockpiling Program--which is about 40 percent of the target.

Because of this speed in purchase, rice demand has also risen in recent days.

The Mekong Delta will enter peak harvest of 1.3 million hectares of summer-autumn rice in July and August with expected output of 7.56 million tons.

A kilogram of dry normal rice now fetches VND4,900-5,000 and a kilogram of dry long grain rice is priced VND5,100-5,200.

The Ministry of Industry and Trade said that Vietnam has exported more than 3.48 million tons of rice in the first half of the year.

Businesses plan to export another 2.2 million tons in the third quarter and 1.7 million tons in the fourth quarter.

Total rice export volume is expected to reach 7.5 million tons this year.

Gov’t extends loan deadline for farm exports

The Government has agreed to extend the loan payment deadline by 12 to 36 months for some farm exports such as coffee, which has been facing a lot of difficulties.

At a regular Government meeting in June, the Ministry of Agriculture and Rural Development was instructed to work with relevant sides to estimate difficulties faced by each export produce and propose suitable assistance policies.

The State Bank of Vietnam should order credit institutions to help coffee businesses resolve standing issues.

National budget revenue increases 5.5 percent in first six months

According to the General Department of Vietnam Customs, in the first six months of the year, national budget revenue reached VND96 trillion, accounting for 40 percent of the year’s target and an increase of 5.5 percent compared to the same period last year.

This is a great effort of the department as it saw a decrease of 5.25 percent and 1.4 percent in the first four months and first five months of this year, respectively.

Particularly in the first four months of this year, the department collected VND56.29 trillion, accounting for 23.7 percent of the plan, down 5.25 percent year-on-year. The figure rose to VND74.5 trillion in the first five months, accounting for 31.4 percent of the plan, down 1.4 percent year-on-year.

An increase in budget revenue was contributed by improved import and export, a recovery in automobiles import, and a rise in oil tariffs.

In the first half of this year, total imports and exports were estimated at US$125.51 billion, up 16.8 percent year-on-year.

Exporters trained in global sales skills

A training workshop for exporters to learn more about international sales skills was held yesterday at the HCM City Investment and Trade Promotion Centre (ITPC).

Co-organised by ITPC and the non-profit Hinrich Foundation, the workshop's aim was to help exporters capture more orders as the global economy recovers slowly.

Participants also learned more about potential buyers and how to take advantage of their unique selling points. They also were taught how to bring buyers and sellers together.

Alexander Boome, programme director of the Hinrich Foundation, said the key components of any successful export business were marketing and skill development of staff.

Tran Xuan Trang, head of ITPC's training department, said that ITPC was focusing on offering more training to exporters so they could take better advantage of the Government's marketing platforms like trade shows in Viet Nam and abroad.

Pham Thi Nguyet Hong, of Viet Products Corp, who took part in the workshop, said the experts' advice had helped her employees gain practical, real-life experience.

Banks unite to revive Lai Chau project

A credit contract worth VND14.5 trillion (US$690.47 million) was co-signed in Ha Noi yesterday for the Lai Chau Hydro-power project in northern Lai Chau Province.

The agreement was signed by Vietcombank, Vietinbank, BIDV and Agribank with Electricity of Viet Nam (EVN).

Speaking at the signing ceremony, EVN general director Pham Le Thanh said the group needed VND100 trillion ($4.65 billion) each year to invest in electric projects.

"The credit agreement would facilitate the hydro-power project, especially after investors had struggled to access to loans," Thanh said, adding that the loan would help the project stay on schedule.

He said the banks had already loaned EVN VND40 trillion for power projects.

"For years, Vietcombank has helped EVN to arrange credit provision to meet the capital requirements for large power projects, and provided other banking services," said Nguyen Hoa Binh, chairman of Vietcombank's management board.

The plant is on the Da River in Muong Te District, and preparatory work to block off the river began in early 2011.

EVN is the main investor in the 1,200MW project, worth VND35.7 trillion ($1.8 billion). It will be the third biggest power plant in Viet Nam, just behind Son La and Hoa Binh.

The first turbine is expected to be put into operation in early 2016.

The plant is expected to provide an average of 4,670 million kWh of electricity annually.

The project will also improve irrigation in downstream areas, especially in the dry season, as well as other socio-economic factors in Lai Chau Province.

Earnings from overseas witness surge

Overseas remittances to Viet Nam through banks in HCM City reached US$1.9 billion during the first half of this year, representing a surge of 3 per cent year-on-year.

The figure for the full year was expected to hit $4.5-4.8 billion, higher than the figure of $4.1 billion for last year, according to the State Bank of Viet Nam.

Remittances to Viet Nam often climb substantially during the final months of the year, as the Tet holiday approaches.

Overseas remittances to the country totalled $10 billion last year, the highest figure for the last four years.

Viet Nam ranked ninth on the World Bank's list of top-ten countries that attracted the most overseas remittances last year and ranked second in the Southeast Asian region. Statistics showed that about 4.5 million Vietnamese, including more than 400,000 guest workers, were living in more than 100 countries and territories world-wide, and over 80 per cent of them were settled in developed nations.

Planned hydro-power projects postponed

Eighteen hydro-power plant projects in central Quang Nam Province have been postponed until 2015.

The reason behind this is a lack of capital, according to local authorities. Meanwhile two additional projects have been scrapped altogether.

The development of these 18 projects is set to continue in two years, providing sufficient investment can be attracted and fit in with local socio-economic planning, according to Director Nguyen Quang Thu of the provincial Industry and Trade Department.

At present, the province has 32 hydro-power plant projects including eight with an operational capacity of over 80 MW.

RoK firm to build textile factory in Giao Long

A company from the Republic of Korea has been licensed to build a garment and textiles factory in Giao Long industrial park in the southern province of Ben Tre.

The US$50 million project, the largest of its kind in Ben Tre, is being developed by Unisoll Vina Ltd Co under the name of Hansoll Textile Ltd.

Covering an area of 25ha, the factory is expected to produce 90 million items a year, all of them for export.

The factory is scheduled to be completed in September next year, generating over 11,000 jobs.

Since 2001, Hansoll Textile Ltd has also invested in the southern provinces of Binh Duong and Dong Nai under its policy of expanding investment in Mekong Delta provinces.

Japanese group invests in major car wiring factory

Yazaki Hai Phong Viet Nam company will pour $33 million into an automotive electrical wiring factory in Dong Mai Viglacera Industrial Park in the northern province of Quang Ninh.

On Tuesday, the company, a subsidiary of Japan's Yazaki Group, signed a lease in principle for 70,000sq.m of land on which the factory will be built. The project is expected to create employment for 3,000 people.

The Yazaki group occupies one third of the world market in the car wiring sub-sector.

Fund stabilises petrol prices

The petrol price stabilisation fund stood at VND55.4 billion (US$2.6 million) at the end of June, the Ministry of Finance reported this week.

According to its first edition of quarterly statistics related to the management and use of the fuel price stabilisation fund published on its website on Tuesday, 12 petrol dealers had contributed to the fund.

Seven of those using the fund now have positive fund balances, such as the Viet Nam National Petroleum Group (Petrolimex) and the Military Petroleum Corporation.

This disclosure was pursuant to a request made by Deputy Prime Minister Vu Van Ninh on May 3, when he asked the Finance Ministry to publicise the data on the fund every quarter to provide transparency.

The Finance Ministry said the fund balance at the end of June was at VND55.4 billion ($2.6 million), a drop of roughly VND680 billion ($31.6 million) compared to last year's figure.

Since 2009, the fund balance has never been in the red and reached a high of VND1.8 trillion ($84.6 million) in 2010.

It fell to roughly VND1.5 trillion ($70.5 million) in 2011, VND740 billion ($34.8 million) in 2012 and VND55.4 billion at the end of June 2013.

The finance ministry said the fund had helped to keep petrol prices down since 2009, and retail prices would have risen VND2,000 per litre last Tet without the fund, rather than the hike of VND1,430.

However, the finance ministry said there were still many different opinions about the use of the fund so the Ministry of Industry and Trade and other relevant ministries were making amendments to Decree 84 on the trading petrol and oil.

Currently, fuel companies must extract VND300 per kilo or litre of oil and petrol to add to the price stabilisation fund.

The latest increase in petrol and oil prices on June 28 were between VND300-370 per litre to VND24,110 for RON 92 petrol and VND21,840 for diesel oil.

EU’s new tax incentives hard to gain

Vietnam is one of the countries to enjoy the most incentives offered by the new General System of Preferences (GSP) of the European Union (EU), effective on January 1, 2014, but local businesses may not be able to fully make the most of this treatment.

There will be only 89 beneficiaries of the new GSP, versus the current 176, said Madeleine Kihlberg, deputy head of the economics and trade section of the EU delegation to Vietnam. She was speaking at a seminar on the new GSP held in HCMC last week.

While some other countries in the region will witness their list of GSP-eligible products shortened, Vietnam will have more items entitled to preferential tariffs, namely footwear, hats and umbrellas.

With the new GSP, many items exported to the EU will likely bring in larger revenues, said experts at the seminar.

Truong Dinh Tuyen, former Minister of Trade, said the new GSP would have a positive impact on investment attraction because not only local companies but foreign-invested enterprises would also enjoy the incentives when exporting to the EU.

Tran Ngoc Quan, deputy head of the EU Market Department of the Ministry of Industry and Trade, said only 40% of Vietnamese goods bound for the EU had benefited from the GSP, which he said was a low rate.

There are many reasons why local exporters have not made good use of the EU’s GSP, but the major one is the strict rule on origin set by the GSP.

“Sometimes, the tariff is lowered by 3-5 percentage points, but in order to enjoy it, enterprises must satisfy a lot of requirements, so they are easily discouraged,” said Quan.

He stressed the rules on origin would not change under the new GSP, meaning they would remain stringent.

Talking to the media on the sidelines of the seminar, Franz Jessen, ambassador-head of the Delegation of the EU to Vietnam, said the new GSP would be more open and several items of Vietnam would be beneficial.

However, to make good use of the new GSP, Vietnamese companies have to add more local content to their products, he said.

Under the new GSP of the EU, an item will be excluded from the list of GSP-eligible products when its exports to the EU exceed 17.5% of the total exports from all GSP beneficiaries. This level has been raised from 15% previously.

This will pose a challenge for Vietnam, Quan noted. Since many countries will no longer be qualified for the GSP, Vietnamese exports to the EU will occupy a greater share, leading to many Vietnamese items being easily removed from the GSP list.

Some items are predicted to exceed the threshold for preferences, or to encounter self-defense, including plastics and apparel. Meanwhile, a number of items will enjoy stable incentives, including wood and wood charcoal, textile materials, electronics and cell phones.

Nguyen Huu Nam, head of the legislation department at the HCMC branch of the Vietnam Chamber of Commerce and Industry of Vietnam, said that as many countries and items would be excluded from the GSP list, trade fraud might grow rampant, resulting in anti-dumping cases against Vietnamese goods.

EVN’s VND9.3 tril. debts to PVN, Vinacomin

Vietnam Electricity Group (EVN) still owes Vietnam Oil and Gas Group (PVN) over VND9 trillion and Vietnam National Coal and Mineral Industries Group (Vinacomin) more than VND3 billion.

PVN Chairman Phung Dinh Thuc said EVN since 2012 had fully paid PVN for the electricity it purchased. The debt of VND9 trillion mentioned above was accumulated in the years before that.

Nguyen Van Bien, deputy general director of Vinacomin, said EVN had seriously dealt with its debt to Vinacomin, reducing it from over VND1 trillion in 2012 to some VND3 billion now.

Speaking on PVN’s business performance on Monday, Thuc said the group would accelerate its power projects in 2013. It is expected that the first boiler of Vung Ang 1 thermo-power plant will start operating later this year and the plant will begin a trial run and connect to the grid in the first quarter of 2014.

PVN has chosen partners for the thermoelectric projects Thai Binh 2 and Long Phu 1 and is awaiting the final decision of the Government.

In the first six months, PVN extracted 13.64 million tons of oil. The group earned nearly VND365 trillion, 15% higher than planned, and paid VND89 trillion to the State budget.

PVN is running three ethanol projects with total capacity of 300,000 tons per year.

The ethanol plant in Dung Quat is operating at a capacity of 100,000 tons a year. PVN intends to use 3% of the ethanol output to make bio-gasoline for sale at the filling stations managed by the group.

PVN is calling on fuel companies to invest in bio-gasoline distribution channels.

Meanwhile, the plant in Binh Phuoc has been completed. However, as exports bring in losses and consumption at home is poor, the plant has been inactive.

The ethanol project in Phu Tho is still under construction. Construction costs have risen significantly, leading to disagreement between related parties, and thus the project has been halted.

Using the bio-petrol E5 will be mandatory in seven cities from December 2014 onwards, and one year later, the rule will take effect nationwide.

“We hope when the use of bio-petrol is compulsory nationwide, the ethanol plants of PVN will operate efficiently,” said Thuc.

Rice and seafood sectors struggling despite export rise

Reviewing rice and seafood export of the Mekong Delta in the year’s first half, leaders of ministries and agencies said that the two sectors were grappling with difficulties despite an increase in their export.

Speaking at a seminar in Can Tho City last week on how to solve difficulties, and boost rice and seafood production and consumption in the Mekong Delta held, Vu Van Tam, deputy minister of Agriculture and Rural Development, said Vietnam’s rice export in the year’s first two quarters encountered many difficulties due to fierce competition from India and Thailand.

According to Ho Thi Kim Thoa, deputy minister of Industry and Trade, rice inventory is still high in Thailand with around 17 million tons and in India with some 35.5 million tons while it is hard to gauge demand of Vietnam’s traditional markets. “Indonesia and Malaysia have not announced their import plans or have just imported small amounts,” she said.

Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), said an oversupply on global markets was hitting Vietnam’s rice exporters.

“Difficulties are forecast to stay in the next few years since importing countries are scaling up domestic production to self-suffice and there have emerged new rice exporting nations such as Myanmar and Cambodia,” Phong said.

However, statistics about rice export released at the seminar showed that Vietnam’s rice export reached around 3.5 million tons late last month, and revenue based on FOB price exceeded over US$1.5 billion, up 2.55% in volume and down 2.04% in value year-on-year.

Regarding shrimp and tra fish exports, Thoa said lack of capital for farming, diseases, Ethoxyquin testing requirements in Japan and South Korea, and the anti-subsidy issue in the U.S. were delivering a blow to domestic exporters.

However, the export of tra fish in the year’s first half increased by 0.53% year-on-year to US$858 million while the respective figures of shrimp export were US$1.088 billion and 7.17%.

“It is forecast that exports of tra fish and seafood will continue growing as strongly as last year, with respective revenue reaching US$1.75 billion and US$2.2 billion,” Thoa said.

Despite an increase in exports of rice and seafood, farmers’ incomes declined in the period.

Dao Anh Dung, vice chairman of Can Tho City, told the seminar, “While the profit of Jasmine rice growers in the winter-spring crop of 2013 was over 62%, it dropped to 50% in the summer-autumn crop. With IR 50404 rice, profits in the winter-spring and summer-autumn crops were over 38% and 7-12% respectively.”

According to Dung, regarding tra fish, farmers were selling the fish at a loss, and with each kilogram of tra fish sold, farmers currently lose VND1,000-3,000.

Rice exporters face woes in Japan

Rice exporters to Japan encountered many difficulties in the first half while shipments to Europe grew by a staggering 127%, according to An Giang Import-Export Company (ANGIMEX).

Nguyen Van Tien, general director of ANGIMEX, said his firm exported around 30,000 tons of the food staple to Japan last year but almost nothing in January-June this year even though Japan imported some 350,000 tons.

“Japan’s agriculture ministry currently wants more rice from Vietnam. However, due to concerns over food hygiene and safety, they import mainly from Thailand,” Tien said.

According to the Vietnam Food Association (VFA), Japan imported around 700,000 tons of rice and its domestic rice demand for this year is forecast to be equivalent to that of last year.

Regarding the European market, Vietnam’s rice export to Europe in the first half reached 114,000 tons, up 127% year-on-year.

On the domestic front, after around 20 days of rice buying for a Government-approved rice stockpiling scheme, member companies of the Vietnam Food Association (VFA) have purchased nearly 350,700 tons of rice, or 35.07% of the volume assigned for this year’s summer-autumn crop.

Huynh Minh Hue, general secretary of VFA, gave the figures at a first-half export review meeting in the Mekong Delta city of Can Tho last week. The rice stockpiling program began on June 15 and wraps up on July 31.

Paddy and rice prices in the local market have become volatile since companies started purchasing rice for the program, with long-grain paddy and rice prices increasing on limited supply, Hue said. In the meantime, IR50404 paddy category fell slightly since its quality does not meet export criteria.

Fresh paddy is bought at the field at VND4,500 a kilo for long-grain types and VND4,100 a kilo for IR50404 type, according to VFA. The price of dried long-grain paddy is VND5,100 a kilo and that of IR50404 stays at VND4,800 a kilo when bought at local farmers’ homes.

Meanwhile, dried long-grain paddy alone sells for VND5,167 a kilo at companies’ warehouses, and IR50404 for VND4,914.

However, Duong Van Men, a rice trader in Dong Thap Province’s Lap Vo District, informed fresh long-grain paddy and IR50404 bought at rice fields is only VND3,400-4,400 a kilo and VND3,950-4,050 a kilo respectively, lower than the levels reported by VFA.

By the end of last month, the volume of rice contracted for export had amounted to about 5.3 million tons, up 7.21% year-on-year, Hue of VFA said, adding local exporters already delivered a combined 3.5 million tons worth more than US$1.5 billion, FOB price, in the period. VFA forecast the nation’s rice exports at a total of 7.5 million tons in all of 2013, with 2.2 million tons for this quarter and 1.8 million tons for the last quarter.

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