Post-harvest management of rice urged

Viet Nam needs to focus on improving post-harvest practices in order to garner greater benefits for farmers and make Vietnamese rice more competitive in the world market, experts said at a conference in the Cuu Long (Mekong) Delta province of Soc Trang on Thursday.

Apart from the rice strains that are cultivated, post-harvest processing has a large bearing on rice quality, they said.

Several speakers at the conference noted that rice quality has indeed improved in Viet Nam in recent years because of improvement in rice strains and the application of modern technology in farming and post-harvest activities.

If farmers can better access the best practices in rice production, there will be an increase in production as well as the quality of the rice, they said.

Previously, Thailand accounted for 80 per cent of the rice imported by Hong Kong, but since 2010, this has dropped to 60 per cent. The market share of Vietnamese rice, meanwhile, has increased to 18 per cent from three per cent. One of the reasons for the growth is the improvement made in rice quality, speakers said.

Pham Van Tan, deputy director of the Southern Institute for Agricultural Engineering and Post-harvest Technology (SIAEP), said with low quality rice, the market would be smaller.

He said the rice supply chain should be shortened to improve quality.

Post-harvest treatment has a great bearing on the quality of rice. However the task has not been done well by Vietnamese farmers. The downgrade of Vietnamese rice is often made during the post-harvest period, Tan said.

"Storage and drying are the two weakest activities in Cuu Long (Mekong) Delta," he said. He said there was a need to train various parties in the rice supply chain and other supporting agencies in post-harvest technologies to reduce post-harvest loss and improve rice quality.

Rice quality also decides the income of both farmers and traders, T?n said. He noted that Vietnamese rice is always cheaper than Thai rice for the same variety. The price of Viet Nam's rice is US$30 to $100 per tonne cheaper. Grant Singleton, Coordinator of the International Rice Research Institute's Irrigated Rice Research Consortium, which is implementing a model applying Good Agricultural Practices in An Giang for the past 12 years, said paddy cultivation in Viet Nam, especially in the Cuu Long (Mekong) Delta, had great potential.

But challenge is how farmers can improve quality and earn greater incomes, Singleton told Viet Nam News, adding that they needed to improve their production practices and make them much more efficient.

"In order to produce premium quality rice, we need to establish better linkages between farmers, service providers, traders and others to facilitate adoption of best practices for production and post-harvest management of rice," said Singleton. Production efficiency lays the basis for improvement in rice quality, he said. "In the past, a farmer would produce high quality rice, and the neighbouring farmer would produce ordinary rice, and the buyer would buy both and mix it. This does not benefit them."

He suggested farmers make themselves aware better of the market and price variations, which means they would have to meet and work together in negotiating with buyers.

Importing countries also want to have clear indications that rice is produced under environmentally sustainable methods, Singleton said.

Rice is farmers'major source of income but their rice cultivation land are very small,participants said at the conference.

Farmers with less than one ha or less than two ha do not get enough income from rice. So they need to find other jobs.

There are a large number of families having less than one ha of land to farm. In the Song Hong (Red River) Delta, the number of farmers with less than half a ha of land is very high.

They should group their farms together to make production more efficient, which in turn would improve the quality of rice, participants said.

Investors eye Vietnam as rest of Asia loses sheen

With labor costs soaring in China and Japan and Thailand suffering from natural disasters, Vietnam is likely to see investments flow in from these countries, newswire Dan Tri reported.

Greg Ohan, national head of Industrial & Logistics Services and Global Corporate Services of investment research company CBRE Richard Ellis, speaking at conference held by the American Chamber of Commerce in Vietnam, said: “Pressures from the increased wages and other costs have reduced the competitiveness of the Chinese industrial sector and many international manufacturers establishing plants in China plan to transfer such production facilities to other countries.

“They want to move to a country with more convenient conditions such as labor costs, land prices, and traffic infrastructure, all of which can be found in Vietnam.”

For instance, Canadian textile manufacturer Vintex was eying Vietnam for its US$150-million project while Taiwan’s Foxconn Technology Group also had similar plans, he said.

“Camera manufacturer Olympus also plans to combine its two plants in China into one and build it in Vietnam in a project worth $88 million.”

Other markets had also become volatile, offering opportunities to Vietnam, he said.

One of them was Japan, which was ranked the fourth largest investor in Vietnam and had invested around $21.6 billion in 1,560 projects in the first half of this year, he said.

“The earthquake disaster has forced many manufacturers to consider moving to Vietnam as a safer destination.”

The devastating floods in Thailand were also worrying investors, he said.

With the waters yet to recede, Thailand has shut down seven industrial zones, where the plants of many major manufacturers like Canon, Toshiba, Lenovo, Apple, and Toyota were located.

Consequently, they were eying other Southeast Asian countries, Ohan said.

“Vietnam has attracted the attention of many auto and motorbike makers including Yamaha, Piaggio, and Honda.”

Other speakers at the conference also said the Vietnamese industrial sector was expecting a breakthrough with its many new policies to attract investors, improved infrastructure, and 177 industrial zones available countrywide.

The large workforce, reasonable wages, and stable polity also helped make Vietnam a more appealing destination, they said.

Central bank makes banking system more transparent

The State Bank of Vietnam has made public several indicators of financial soundness for banks set by the International Monetary Fund to increase transparency in the financial system.

Dao Minh Tu, chief of the central bank’s secretariat, told Tuoi Tre that the central bank would initially make public five out of the 12 core indicators that the World Bank and international investors especially focused on.

They were capital to risk-weighted assets, non-performing loans to total gross loans, sectoral distribution of loans to total loans, return on assets, and return on equity, he said.

“With such information, the public and investors will have a clearer look at the quality of the banking system.

“Good [numbers] will increase public trust while bad ones will put banks under pressure to win back the trust, improve competitiveness, and continue development.”

He said other information about the monetary and the banking systems would also be made known to the public.

The central bank would announce information about the development of the banking system and banks’ opening, merger, dissolution, and bankruptcy, he added.

Corporate income tax likely to be cut by 5 pct

The National Assembly’s (NA) Finance and Budget Committee has suggested further corporate income tax cuts to 20 percent, much lower than that at many regional countries, the chair of the committee told Saigon Tiep Thi newspaper.

Taxes are on a decline in general, said the chairman Phung Quoc Hien, adding that corporate income tax which stood previously at 32 percent has been lowered to 28 percent and 25 percent recently.

The adjustment is expected to come in 2012 or 2013 during the roadmap of law making.

The total tax collection for the state budget is projected to gain VND612 trillion this year, up 16.7 percent over 2010’s estimates, mostly thanks to increased collection from land, non-state sector and export-import taxes which have significantly picked up by the year-end, according to the Ministry of Planning and Investment.

But since 2011 has been a tough year for the majority of businesses, especially small and medium-sized ones struggling with a variety of hardship that could last through 2012, increasing state budget collection would then mean dealing with state budget losses and smuggling rather than taxation on businesses, Hien said.

Regarding other types of taxes, he said that value added tax would be adjusted so as to be in line with the international practices.

Also, personal income tax should be calculated on the minimum wage rather than fixed family allowances for dependents. As such, family allowances would be easily adjusted so as to reflect the reality on adjustments of minimum wage.

These basic changes are expected to come early so as to facilitate the restructuring of the economy.

For instance, apart from corporate income tax relaxation, the policy on tax exemption and reduction should be applied to disadvantaged areas to redirect investments to those places.
Budget collection from the non-state owned enterprises needs enhancing due to substantial budge losses incurred from this sector.

However, the results of investigation and auditing in many large state-owned enterprises and corporations revealed similar considerable amounts of reclaimed taxes.

Unlike the non-state sector, accounting activities are fairly complete in state-owned businesses. Moreover, auditing and investigation have been carried out in state-owned enterprises only.

In fact, state-owned enterprises' contribution to state budget is limited, yet has increased significantly recently.

The Vietnamese Ministry of Finance has recently said that fuel tax should be regulated flexibly and the fuel tariff in 2012 may be range between 0-40 percent in accordance with World Trade Organization's (WTO) commitment.

The Price Management Department under the finance ministry has recently sent document replying to general Department of Vietnam Customs about planning the tariffs for some goods subject to preferential tariffs in 2012, including petroleum.

Particularly, the Customs agency said that the tariff for petroleum products in 2012 would be kept stable like currently at 0.5 percent.

However, price manager said that fuel tax should be adjusted flexibly.

In addition, the tax rate is applied for the whole year 2012, so the plan should range between 0-40 percent as committed with WTO.

‘Dual price’ dollar persists on ineffective ceiling forex rate

The interbank forex rates quoted daily by the State Bank of Vietnam and other commercial banks exist on paper only, as businesses have to pay a higher price to buy the greenback, according to Dau Tu Chung Khoan newspaper.

The firm has been charged with an additional 1 percent of this price as fees, though the selling price was posted at VND 21,011 per dollar, said a manager of an animal feed firm in southern industrial hub of Binh Duong.

Similarly, importers of essential commodities, such as fertilizer, agricultural and garment and textile materials, have also born such added costs.

“Saigon Petro Co Ltd has been charged VND500 -600 more for any dollar we purchased,” general director Dang Vinh Sang told Saigon Tiep Thi newspaper.

Banks are not allowed to charge fees on dollar purchase, but the charging can be done via other kinds of related services which are negotiable between banks and customers, said a capital manager at Techcombank.

“But the situations generally reflect the imbalance in supply-demand of the greenback, the dollar liquidity shortage,” he added.

Higher forex rate on the free market than on the official market could have made purchasing and then selling at the officially quoted forex rate almost unlikely, according to banking experts.

The current forex rate has failed to reflect the real relation between the Vietnam dong and US dollar, said economist Vu Dinh Anh, deputy director of the government's Market and Price Research Institute.

The additional fee is actually a type of price.

This cost together with the official rate could even surpass prices on the free market, which reveals something wrong with the official market, he added.

"Like the management of ceiling interest rate earlier, it is the lack of timely investigation and tough penalties that give a rise to charging further in selling foreign currency", said Anh.

A substantial trade deficit that adversely hit the forex market has been the major factor bringing about the imbalance in demand-supply of the greenback, according to the central bank.

Also, the breaking of the forex cap rate by several credit institutions' and branches of foreign banks has blown a dealt to foreign currency stability as well as the business operations of other lenders.

For strict compliance with the regulations to be executed, the inspection and investigation regarding foreign currency trading with customers and on the interbank market will be carried out at some soon, the central bank said.

In fact, the additional fee is recorded under a different name on books of banks and enterprises, which could be abused to benefit some, said Dr Vo Tri Thanh, deputy director of the Institute for Central Economic Research Management.

For instance, the representative of an enterprise could retain the extra amount when selling dollar to banks. Also, further expenses could be intentionally pushed up when purchasing dollar from banks so as to enjoy the difference.

"It is important that a dialogue between the central bank and commercial banks as well as between commercial banks and customers should be conducted", said Thanh.

Apart from tough administrative measures, the central bank's further intervention into the market is still needed, according to a manager of Techcombank.

Enterprises in several privileged sectors that have direct impact on the socioeconomic picture, for instance, will be given the first priority to purchase dollar.

It may stand to reason that the central bank is stick to the ceiling forex rate, yet the lack of transparency could not stand, said a banking expert.

Stiff penalties may be required so as for strict compliance to be ensured. Therefore, the central bank should have dollar sold out so as to ease the surging demand.

Otherwise, commercial banks and enterprises should, meanwhile, be required to make clear the additional fee for more transparency, thus facilitating the central bank's monitoring.

Outstanding entrepreneurs, enterprises honoured

As many as 65 outstanding entrepreneurs and 125 enterprises nationwide were honoured at a ceremony in Hanoi on November 13.

Those individuals and units received the “Vietnam Golden Entrepreneur 2010” and “Vietnam Golden Enterprise 2010” awards for their best performances in production and business and contributions to developing the economy and ensuring social welfare.

Speaking at the ceremony, Deputy Prime Minister Nguyen Xuan Phuc expressed his belief that the awardees will make greater efforts to help boost national development.

The award is annually organised by the Association of Vietnam Small and Medium Enterprises (VINASME) to honour entrepreneurs and enterprises operating efficiently with high growth in manufacturing, business, services; strong brands; and active participation in social activities and social welfare.

Chinese potato threatens Dalat farmers

Imported potatoes from China posing as Dalat products are spreading on the Vietnamese market and cutting profits for farmers whose brand’s value has fallen rapidly this year.

Dalat farm produce market, seven kilometers from the city center, is where the “fake” potatoes originate from. Tons of basalt soil is openly used at the market as a special ingredient to transform normal Chinese potatoes into Dalat fakes in order to make huge profits.

Many stalls in the market are applying this technique freely, with the majority of this fake produce transported to HCMC under the brand of Dalat potatoes.

Traders are currently importing Chinese potatoes at VND5,000-8,000 per kilo. After covering them in basalt soil, the fake produce can be sold at equivalent prices or slightly lower than genuine Dalat potatoes.

Chinese potatoes flowing into the local market not only cheat consumers but also have a tremendous impact on Dalat farmers’ livelihood.

Le Quoc Dung, a potato grower in Dalat City, said potato prices in the previous years often surged a few months after harvesting. However, this year the prices keep dropping, from VND12,000 to VND10,000 per kilo, due to the influx of Chinese potatoes.

Unlike Dalat potatoes whose harvest season falls between February and April, Chinese potatoes are sold all-year round, said Nguyen Dinh Di, chairman of the farmer association in Ward 8, Dalat City. The Dalat produce has thinner peel and rots after 3-4 months, while the Chinese potatoes have a longer life-span of one to two years, Di added.

Imported potatoes from China being touched up so that distributors can illegally use the Dalat brand-name has gone on for years and the local authority is well aware of this issue but it has yet to initiate measures to protect the local potato brand.

Nguyen Duc Cu, deputy head of the Dalat City’s economy department, said importers of Chinese potatoes submitted papers proving the origin of the produce when inspected. However, when the goods go to market, the traders cheat consumers by using the brand-name of Dalat potatoes.

Industrial exports expected to stall
 
The Ministry of Industry and Trade (MoIT) has warned of upcoming challenges in finding industrial export contracts due to financial difficulties in key export markets such as the EU and US.

According to a ministerial report released this week, key industrial sectors managed positive results during the first three quarters of the year.

However, textile and garment exporters said that orders had reduced by roughly 15-20 per cent last month compared to the same period last year. Many additional exporters, especially the small- and medium-sized, reported shortages in export orders over the last months of the year while predicting the situation to continue into the first quarter of 2012.

The MoIT reported that textile and garment export turnover had dropped from more than US$1.5 billion in August to only $1.3 billion last month.

"Viet Nam's two major export markets, the US and EU, are currently facing severe financial difficulties in the wake of the public debt crisis, which is expected to adversely affect domestic exports during the coming months, "the ministry forecast.

It added that domestic textile and garment exporters had made efforts in targeting other markets such as Australia, Africa, Canada and South Korea to offset the reduction in European and American orders. However, this was no easy task due to fierce competition from discounted Indian and Indonesian products.

The situation remains the same for domestic footwear exports, another key local export product, the ministry said.

After fetching a monthly export value of $570-640 million during May and August, turnover fell to roughly $400 million during the past two months due to declining orders.

In addition, domestic footwear production has been negatively affected by high input costs and a lack of skilled workers.

Wood products sector urged to foster markets

Manufacturers and distributors of wooden products need to establish close links to boost domestic consumption, a conference heard in HCM City last Saturday.

Nguyen Quoc Khanh, deputy chairman of the Handicraft and Wood Industry Association of HCM City (Hawa), said last year Viet Nam, with exports worth more than US$3.2 billion, had been the largest furniture exporter in ASEAN.

But its products remained unpopular at home since manufacturers focused completely on exports and domestic consumers preferred imports, he said.

Besides, the lack of large distributors and the absence of ties between manufacturers and distributors were adverse factors, he said.

Locally made furniture only accounted for 25 per cent of the domestic market, with imports, mainly from China, accounting for the rest, Khanh told the conference held on the sidelines of the VIFA Home exhibition.

But consumers had begun to pay more attention to the origin of imported products and their contents, especially with regard to health, he said.

Formaldehyde was commonly used by furniture makers in China's Foshan Province, and this was detrimental to people's health, he said.

Thus, with consumers gradually losing their confidence in imports, local firms should grasp this opportunity and win their trust by offering quality products at competitive prices, he said.

With cost no longer a limiting factor, they had to diversified their designs and offer customers more choice, he said.

Along with living standards, demand for interior decoration items and furniture is also rising in Viet Nam.

Many delegates pointed out difficulties in penetrating the domestic market, including a shortage of market information and high distribution costs.

Businesses did not feel secure enough to invest in a market without reliable information, Nguyen Chanh Phuong of Danh Moc Company said.

The woodworking industry needed to do market research so that producers could develop the right products, he said.

Khanh said getting money for their goods from distributors was also a big concern in the domestic market.

Many attendees called on the industry to develop products exclusively for the domestic market and not just sell excess items made for the EU and other export markets since local and foreign customers' tastes varied.

Vu Van Anh of distributor Vietmay Depot said manufacturers should work with professional distributors instead of setting up their own systems to ensure outlets for their products.

Heiko Woerner, technical advisor to the Vietnamese German Forestry Programme, component 2, said Hawa and the German Technical Cooperation Organisation would jointly survey domestic consumers' tastes to assist furniture firms.

To create links between manufacturers and distributors, Khanh said Hawa plans to soon launch an online furniture market with up-to-date information about product samples and prices.

Developers face default threat
 
Property developers are under intense pressure to repay bank loans that generally fall due at the year-end even as the property market has hit rock bottom.

Some have even asked the banks to take possession of the properties they had mortgaged.

Banks are putting pressure on their debtors to repay loans so that they can reduce outstanding loans to non-production sectors to 16 per cent by year-end as required by the State Bank of Viet Nam.

The general director of a joint stock commercial bank, who did not wish to be named, said this year his bank had just focused on collecting property debts.

Usually premature repayment attracted a penalty, but this regulation had been eased to coax borrowers into paying, he said.

But none of the efforts were working, he admitted, saying only individual customers who had borrowed by mortgaging houses were repaying.

The reason for developers' inability to pay up is clear: the market slump means most of them make no profits or even cash flows.

A deputy general manager of another bank said many developers who had borrowed right from the initial stages of their project could be "exhausted" now after paying interest for three or four years and facing a tightened credit market.

Banks had decided to join hands with the borrowers to resolve their difficulties and save themselves, he said.

They would continue to fund projects that were nearly complete so that the developers could sell them.

However, the banks would also pressure them to come up with other solutions such as offering discounts – even selling at cost – freebies, and flexible payment terms to attract buyers, he said.

A deputy general director of a joint-stock bank in District 1 said developers with assets but without the capacity to repay were being forced to transfer ownership of their projects, including apartment and office buildings and lands.

This was the reason for a big fall in outstanding non-production loans at many banks, he explained.

The chief of a sub-registry in a downtown district in HCM City said he had registered the transfer of titles to many buildings in the last few months, with the transferees being banks.

Many property firms reported big losses in the third quarter due to the market slowdown and high interest rates. Phat Dat Property Development Corporation, for instance, announced a loss of VND7.17 billion (US$336,600). The PetroVietnam Power Land JS Co and Van Phat Hung Corporation reported a loss of VND4.4 billion ($206,500) and VND3 billion ($140,800).

With the property market showing no signs of recovery and credit policy remaining tight, the ability of many developers to even pay interest on loans was questionable, economists said.

As of the end of September, Phat Dat Property Development Corporation owed a total of over VND538 billion ($25.2 million) to banks at around 21.6 per cent per year, meaning the company has to pay more than VND9 billion ($422,500) in interest alone every month. Van Phat Hung has to pay more than VND10 billion ($469,400) a month, Tuoi Tre newspaper said.

Fibre plant breaks ground in Thai Binh

Yarn manufacturer Dai Cuong Group last week inaugurated its VND500 billion (US$23.5 million) fibre plant in Tien Hai District Industrial Zone, Thai Binh Province.

The 15,000sq.m plant, reported to be the most modern facility in Southeast Asia, would be able to produce 8,000-11,000 tonnes of fibre per year with about 500,000 Swiss spindles.

Its products would be aimed at markets in Turkey, Japan, Korea, Brazil, and the US. It would earn an annual revenue of VND750 billion ($35.2 million) and generate nearly 300 jobs after opening.

VIB launches service for foreign firms

The Viet Nam International Bank (VIB) officially launched its foreign direct investment banking (FDI) yesterday.

VIB was one of the first commercial joint stock banks to offer packaged banking products and services for FDI enterprises in Viet Nam.

At the launching ceremony of FDI Banking in HCM City, VIB also signed co-operative agreements with Fubon Viet Nam Non-life Insurance Company and Lotte Coralis Viet Nam Co,Ltd that would provide the two companies with full financial packages.

Commercial bank receives medal

Sai Gon – Ha Noi Bank yesterday was awarded the Labour Order, third class, by National Assembly Chairman Nguyen Sinh Hung in honour of its 18th anniversary. On this occasion, the Governor of the State Bank of Viet Nam also acknowledged the merits of the bank.

Sai Gon – Ha Noi Bank has become one of the 15 largest joint-stock commercial banks in Viet Nam, ranking 12th among the 500 fastest-growing entities in the country.

It achieved VND720 billion (US$33.8 million) in gross profit in the first 10 months of this year, reaching 68.57 per cent of the yearly target.

Discounts galore for Viet Nam teachers

To mark Viet Nam Teachers Day, Thai Tuan Textile and Garment Co has launched two new collections of women's clothes called Sac Phuong Nam 5 and Ky Uc and a promotion from November 10 to 20.

Until 25 November, Yes24 and Hi Fashion are offering a discount of 84 per cent. From November 5 to 30 Guciano Shoe is offering a discount of 15-40 per cent at all its showrooms.