EU wants to import more tra fish

 

Businesses at the European Seafood Exposition in Belgium have affirmed that they will import more tra fish from Vietnam in summer, according to the Vietnam Association of Seafood Exporters and Processors (VASEP).

 

In addition, the US and Brazil will continue to import Vietnamese tra fish.

 

VASEP has decided to raise export prices in the third quarter of 2011 by US$0.2-0.3 per kilo. The price will increase from US$4.2 to US$4.5 per kilo in the US market and from US$3.4 to US$3.6 per kilo in European markets.

 

However, farmers dare not expand production on account of high loan rates and input costs, as well as difficulties in accessing capital. Currently, businesses are purchasing tra fish at VND28,000 per kilo.

 

Vietnamese products showcased in Myanmar

 

Twenty-four Vietnamese businesses are displaying their products at a trade fair that opened in Yangon, Myanmar on May 13.

 

A variety of Vietnamese products are being showcased, including steel, electronic equipment, garments and textiles, construction materials, cosmetics and computers.

 

The four-day event aims to help Vietnamese products penetrate the Myanmar market and boost trade relations between the two countries.

 

Vietnam has invested nearly US$23.650 million in Myanmar since 1988 and is now one of Myanmar’s 20 biggest importers, primarily of agricultural, forestry and seafood products. Vietnam exports to Myanmar steel, electronics, pharmaceuticals, construction materials, cosmetics, garments and textiles.

 

Last year, Vietnam earned US$47 million from exports to Myanmar and two-way trade turnover in 2010 increased 60 percent compared to the previous year.

 

Viettel keen on Argentine market

 

The Vietnamese military-run telecom group, Viettel, is poised to expand to the Argentine broadband telecommunications market.

 

Viettel Deputy General Director Nguyen Manh Hung revealed this at his meeting with Argentine Secretary of Communications, Carlos Lisandro Salas, in Buenos Aires on May 12.

 

Hung highlighted the business strategies that have made Viettel Vietnam’s largest telecom enterprise and successful in certain foreign markets.

 

Secretary Salas briefly introduced the Argentine telecommunication and internet market, saying that Argentina was willing to welcome a new partner.

 

In March, Viettel was granted a licence to do business in Peru and the Viettel delegation will continue to study other markets in Latin America.

 

Rubber exports hit nearly US$2.3 billion

(VOV) - Rubber exports hit a record high of nearly US$2.3 billion in revenues, according to the Vietnam Rubber Association.

 

On average, each tonne of rubber earns US$3,053, up 94.7 percent in value and 82 percent in price.

 

Rubber has surpassed coffee to rank second only to rice in export value and is also one of the top ten Vietnamese export products.

 

By 2010, Vietnam had 740,000 hectares of rubber plantation with an average annual growth of 7.7 percent.

 

Vietnam to promote public-private partnerships

 

The Vietnamese Government hopes to successfully implement the public-private partnership (PPP) programme, said Deputy Minister of Planning and Investment Dang Huy Dong.

 

He was speaking at a seminar on promoting the PPP programme between the Vietnamese government and donors, which was held in Hanoi on May 12.

 

The programme is aimed at creating a market to attract the private sector’s investment in infrastructure projects, thus contribute to the country’s socio-economic development. It is estimated that the market will be able to attract US$70-80 billion within 10 years.

 

Deputy Minister Dong believes that the programme will enable Vietnam to take advantage of the private sector’s management skills and advanced technologies to develop infrastructure and public services projects.

 

Prime Minister Nguyen Tan Dung has signed decision No. 71 on the implementation of pilot public-private partnership projects.

 

Ministries and localities have developed 24 PPP projects including the Ninh Binh – Thanh Hoa highway with a total capitalisation of VND33 trillion and the Ben Luc – Hiep Phuoc highway with an estimated cost of VND15 trillion.

 

Credit growth stalls as interest rates soar

 

Credit growth grew by just 0.11 per cent in April, as against the previous month, bringing the total growth in credit issued through the nation's commercial banking system during the first four months of the year to just over 5 per cent, the State Bank of Viet Nam announced this week.

 

In order to tighten up on liquidity and reduce inflationary pressures, the State Bank has targeted overall credit growth this year of no more than 20 per cent.

 

Interest rates charged for dong-denominated loans increased by an average of 1 percentage point over March, with average rates ranging between 14-17 per cent per year for manufacturing sectors and as high as 18-22 per cent per year for other, non-productive sectors. Some negotiated rates were reportedly as high as 25-27 per cent per year.

 

While borrowing cost for the dollar was 6.83 per cent per annum.

 

The country's broadest measure of the total money supply edged down 0.72 per cent month-on-month during April, yet was up 0.98 per cent from the end of 2010. Cash in circulation was estimated to rise 1.45 per cent over March and 4.12 per cent from December 31, 2010.

 

National Monetary Policy Advisory Council member Nguyen Thi Mui said, "Deposits at major commercial banks are sharply declining." Total Vietnamese dong deposit at commercial banks in April were down 1.84 per cent against the previous month.

 

Corporate deposits at Vietinbank, for example, fell by over 17 per cent between December and April, said a senior official of a State-owned commercial bank who asked to remain anonymous.

 

"Perhaps sources of capital in the economy are draining away, or the current interest rates are not attractive enough compared to the soaring inflation," she said.

 

The average interest rate being offered on dong deposits in the past month was unchanged at 13.4 per cent per year, although it remained widely rumoured that some commercial banks were trying to bypass the interest rate cap of 14 per cent to offer depositors effective rates of up to 17-18 per cent per year.

 

"It is of great concern when some banks illegally offer very high interest rates to attract capital away from other banks, setting off an interest war," commented the bank official.

 

Average interest rates for US dollar deposits were 2.66 per cent, down 2 per cent from March, while total dollar deposits were up 1.46 per cent.

 

Low-grade gold scam leaves local dealers holding the bag

 

The appearance of impure gold alloys on the market has jewelry companies scrambling to avoid the alloy and minimise their losses.

 

Jewelry companies in HCM City late last month began to report that some gold alloy currently on the market was of low purity despite testing equipment showing a purity rate of 99.99 per cent, according to the Viet Nam Gold Trading Association (VGTA).

 

The material began to appear in Ha Noi this week.

 

"The first victims of the huge losses from the gold impurities have been jewellery companies, definitely not consumers," VGTA expert Tran Quoc Quynh told Viet Nam News. "Consumers often sell gold where they bought it, so dealers must buy according to the certified purity recorded on their own certificates."

 

Nguyen Van Dung, chairman of the HCM City Association of Fine Arts, Gold, Jewelry and Gemstones, said that some dealers bought the alloy and processed it into jewelry, certifying its purity at huge losses.

 

"The impurities of this particular alloy will not show up on normal testing equipment," Sai Gon Jewelry Co (SJC) director Luu Quang Dien said to Viet Nam News. "If small companies or shops don't have hi-tech equipment, they should cut out samples for testing."

 

Major gold companies like Agribank Gold Joint Stock Co (AJC) and Bao Tin Minh Chau also told Viet Nam News that they had found impurities in their gold but the quantity was very small. They said they were in meetings to discuss measures to solve this problem, and the VGTA was compiling statistics related to the amount of impure gold alloy on the market.

 

"VGTA plans to set up a special institution which will test the purity of gold products and materials before they are put on the market," said Quynh.

 

The nation's 10,000 gold dealers and jewelry makers buy raw materials from a wide variety of sources, including gold supplies floating on the market or even gold smuggled into the country for use in jewelry manufacturing.

 

"The market has its rules," Quynh said. "It will manage by any means to survive."

 

SJC, Phu Nhuan Jewelry, Agribank Jewelry, and Sacombank Jewelry all reported gold prices up yesterday by VND150,000 over Thursday to VND37.4-37.5 million (US$1,825-1,830) per tael, driven by upward global prices.

 

Spot prices surrendered early gains yesterday to trade nearly flat at $1,502.89 per ounce [one tael equals 1.2 ounces], as the dollar perked up and expectations mounted for US inflationary pressures to ease.

 

Banks try to outdo each other to draw depositors

 

An interest rate race among both small and large banks is taking place among commercial banks nationwide due to the increasing demand for deposits.

 

Although the interest rate of dong deposits is capped at 14 per cent per year by the State Bank of Viet Nam, several commercial banks have still been illegally raising interest rates to improve liquidity, which is being affected by inflationary pressure and difficulties in mobilising capital sources.

 

Small banks are offering much higher interest rates than larger ones. The rate could climb to between 17 and 19 per cent per year.

 

To dodge the SBV's 14 per cent cap, promotion programmes, gifts and cash are offered by banks to encourage people to deposit their savings.

 

For example, some banks give depositors savings books with an interest rate of 14 per cent per year, as regulated.

 

But when the customer makes the deposit, the bank subtracts the difference between the regulated interest rate and the offered bank rate, and gives the customer upfront an amount of cash equivalent to the difference, depending on the length of the deposit term.

 

By doing this, it is less likely that banks' illegal actions will be discovered when inspected.

 

Dr. Cao Sy Kiem, member of the National Advisory Council for Financial and Monetary Policies, said this practice was not new but it was difficult to control.

 

Other experts agreed with Kiem, saying that deposit interest rates should be adjusted to a higher level. They said that banks needed to lure more capital to improve their liquidity.

 

Another high-ranking official in the banking and financial sector also admitted that raising the interest rate ceiling was done to regularise the real interest rate that is actually being used in the market.

 

When asked about the reasons behind the interest rate increases, a representative of a commercial bank in HCM City said commercial banks had to raise the interest rates higher than the capped rate in order to retain depositors.

 

Low interest rates would prompt people to inject money in other investment channels instead of depositing funds in banks.

 

High inflation rates have made depositors hesitate to make deposits, especially long-term ones, he said.

 

The central bank recently increased the refinancing rate and discount rate to 14 per cent and 13 per cent per annum, respectively; thus, causing the interest rate on the interbank market to rise.

 

This made it more difficult for banks, particularly small ones, to seek low capital sources at the interbank market (secondary market) to improve their liquidity. So, they were forced to offer interest rates higher the cap to attract depositors, he said.

 

The interest rate race does not appear to be abating even though there is a policy to constrain credit growth of under 20 per cent and reduce the number of loans for non-manufacturing sectors, Kiem said.

 

Kiem warned enterprises to rearrange production and business strategies to reduce their lending capital as lending and deposit interest rates would not fall as soon as expected, due to increasing inflationary pressure.

 

According to the State Bank of Viet Nam's figures, total deposits at nationwide banks by April 1 fell by 1.09 per cent month-on-month. Dong deposits alone dropped by 1.84 per cent. The country's outstanding loans rose by 0.11 per cent month-on-month.

 

Likely electric rate hikes worry industry

 

Industries are expressing concern about another increase in electricity rates expected in June, when a regulation takes effect allowing rates to be set on a market-based system.

 

Enterprises would face challenges maintaining production if power rates are drastically increased at a frequency of up to four times per year, in accordance with the recent Government decision, said Thep Viet Co chairman Do Duy Thai.

 

Government Decision 24/2011D-TTg allows electricity rates to be periodically adjusted under a market-based system, beginning June 1.

 

Under the decision, Electricity of Viet Nam (EVN) is authorised to propose rate adjustments to the Ministry of Industry and Trade whenever input cost factors such as oil prices and foreign exchange rates change.

 

Deputy Minister of Industry and Trade Hoang Quoc Vuong vowed that, before rate hikes would be approved, EVN would also have to provide an assessment of the impact of the increase on the economy and on social welfare.

 

The ministry is presently drafting two circulars to implement the decision. They would provide guidance on how rates would be established for different user groups and on how rates would be calcluated based on input costs.

 

The two circulars are expected to be completed by June when the decision takes effect, but it is widely expected that electricity rates will rise again shortly after the new regime takes effect.

 

Power prices already accounted for 10-15 per cent of total production costs in his industry, said the deputy general director of Sadakim Mechanical and Metallurgical Joint Stock Co, Vu Van Hien. Enterprises without a specific advance schedule of electricity rate increases would have difficulty in establishing selling prices, Hien said.

 

Many overseas customers have already complained of the high prices of metal products made in Viet Nam compared to the same products made in other countries, he added.

 

Nguyen Tri Kien, director of Minh Tien Handbag Sewing Co, said his company has not yet increased product prices in response to the last electricity rate increase in March, but asserted that prices could no longer remain unchanged following another rate hike in June.

 

In March, power rates jumped by an average of 15.28 per cent over the previous year to VND1,220 per kWh.

 

The Minh Tien company has reviewed equipment and production systems to conserve power, Kien said, but significant savings would require a major long-term investment by the company.

 

Deputy Minister of Industry and Trade Tran Anh Tuan said old-fashioned equipment and technology was causing industries to use more power than necessary and incur high costs. He estimated that only 10 per cent of the enterprises in Viet Nam have updated equipment, while 38 per cent are using moderately outdated equipment and the remaining 52 per cent severely outdated equipment.

 

Vietnamese enterprises have made meagre investments in technology, Tuan said, with such investments amounting to only 0.2-0.3 per cent of total earnings. Just 2 per cent of enterprises have applied modern technology to production, compared to rates of 31 per cent in Thailand, 51 per cent in Malaysia and 73 per cent in Singapore. But obtaining the large amounts of capital needed for long-term upgrades was problematic in the current economy, Hien said, noting tight credit conditions and high interest rates for bank loans currently.

 

Zircon grinding plant licensed in Binh Thuan

 

The management board of industrial parks in Binh Thuan Province has granted an investment licence to Zircon Viet Nam Ltd. Co for a zircon grinding factory with a total capital of VND148 billion (US$7.1 million).

 

The factory will be located in the Ham Kiem 1 IP in the province's Ham Thuan Nam District, invested by the Hoang Quan Binh Thuan Real Estate Consulting-Trading-Service Co.

 

Covering an area of 15,000 sq.m, the factory will have an operational lifespan of 46 years. It is scheduled to be built in the third quarter of this year and put into operation in the second quarter of 2012.

 

Toyota production to return to normal in July

 

Toyota Motor Viet Nam Co Ltd (TMV) on Wednesday announced that its production would be increased to approximately 70 per cent of its plant capacity from June 6 and would return to normal levels from July 4.

 

TMV's production had previously been reduced to 30 per cent from April 25 to June 3 due to a shortage of parts caused by the earthquake and tsunami in Japan.

 

Lafarge Boral Gypsum expands capacity

 

Lafarge Boral Gypsum Viet Nam (LBGV), recently approved its US$20 million investment to triple its plasterboard manufacturing capacity at its current manufacturing facility in HCM City.

 

"The investment confirms our company's confidence in the future growth of the construction environment in Viet Nam and reaffirms our market leadership ambitions," said LBGV General Manager Peter Edwards.

 

The new production line, scheduled for completion by late of 2012, will increase total plasterboard capacity to more than 40 million sq.metres per year, compared with the current 10,000 sq.metres per year.

 

PetroVietnam Oil plans acquisition

 

The Material-Petroleum Company has announced an offer from PetroVietnam Oil Corp to acquire 1.5 million of its shares – a 10.62 per cent stake.

 

The buying price has been set at VND33,600 a share.

 

The acquisition, to take place by June 7, is being implemented by negotiation in the HCM City Stock Exchange. The acquisition will help PetroVietnam Oil raise its stake in Material-Petroleum to about 5 million shares or 35.12 per cent and make it a strategic partner.

 

Material-Petroleum was scheduled to earn a turnover of VND3.7 trillion (US$176.2 million), a post-tax profit of VND33 billion ($1.6 million) and make a dividend payment of 15 per cent.

 

Cotec finds strategic shareholder

 

A major shareholder of Cotec Construction Co (VSE:CTD), Tan Viet Development and Investment Company, has finalised the purchase of 2.1 million Cotec shares.

 

The purchase helped Tan Viet to raise its ownership in Cotec from 3.5-10.45 per cent.

 

The acquisition was implemented through negotiation on Thursday with an offering price of VND55,000 a share.

 

Cotec yesterday closed down 3.81 per cent to VND50,500.

 

Import-export company to pay dividend

 

Ha Noi-listed Sa Giang Import-Export Company (SGC) has set a May 24 deadline for distributing dividend payments to its existing shareholders.

 

The payment is fixed at 20 per cent in shares.

 

The company had a turnover in the first quarter of VND54 billion ($2.6 million) with an after-tax profit of VND14.9 billion ($709,523). It projected a turnover this year of VND180 billion ($8.6 million) and an after-tax profit of VND20 billion ($952,000).

SCIC to auction State share holdings

 

The State Capital Investment Corp (SCIC) announced it would hold an auction on May 23 to offload State stakes in Da Nang Investment and Urban Construction Co.

 

At the auction, the corporation will sell 1.1 million shares at an initial price of VND15,000. Investors can register till Monday to buy shares.

 

The construction firm has a charter capital of VND23 billion ($1.1 million), of which SCIC holds 49 per cent. The company scheduled a revenue of VND269.4 billion ($12.8 million), an after-tax profit of VND3.2 billion ($152,000) and a dividend payment of 9.77 per cent.

 

Firm issues first US dollar bonds

 

The HCM City-listed Hoang Anh Gia Lai Group has raised US$90 million from an overseas bond sale on Wednesday, making it the first Vietnamese private company to sell US dollar bonds.

 

The coupon for the five-year-non-call-three bonds is set at 9.875 per cent per year. The note was offered at US$96.181.

 

As planned, the property developer will pay back 20 per cent of the bonds' principle each year in 2014 and 2015. The remaining 60 per cent will be amortised in 2016, the same time as the bond's maturity.

 

Credit Suisse is the sole underwriter of the company's auction.

 

Chairman of Hoang Anh Gia Lai Group Doan Nguyen Duc was quoted in financial website vietstock.vn saying that the $90 million bond auction was part of the group's plan to raise $200 million for rubber and hydropower projects.

 

The company raised $90 million from $100 million worth of bonds offered in the first phase, with this success acting as an encouragement to continue with the second phase, Duc said.

 

Financial decision maker network FinanceAsia.com quoted a source familiar with the deal, saying that many investors were keen on Vietnamese credits as there were few threats of further supply from Vietnamese issuers.

 

The network revealed that the group's bond auction attracted funds, banks and private banks. Previously, Standard&Poor and Fitch rated the bond as a single B-.

 

HCM City-based fund manager, John Nolan said that the success of Hoang Anh Gia Lai overseas auction helped display the liquidity of Vietnamese credit after Vinashin's woes.

 

"The successful US dollar bond sale helped regain foreign interest in Vietnamese credit, and widened the door for local companies to raise capital overseas," Nolan added.

 

Hoang Anh Gia Lai Group targeted a profit of VND3.6 trillion ($171.4 million) this year which might be revised due to the unfavourable conditions in the second and third quarters.

 

PM greenlights rural development policies

 

Prime Minister Nguyen Tan Dung has called on the Viet Nam Farmers Association to roll out rural development policies during 2011-20.

 

The move aims to promote the association's role in establishing new rural areas, developing agriculture production and creating opportunities for farmers to contribute to and benefit from national industrialisation and modernisation.

 

Viet Nam Farmers Association Vice Chairman Nguyen Duy Luong said that "Until recently the association had operated as a political and social organisation which kept it from taking part in economic activities."

 

The association recently appealed to the Prime Minister to let it take part in policies to improve the role of farmers in the national industrialisation and modernisation process, he said.

 

As part of the new policies, the association plans to invest and upgrade 19 vocational training and support centres throughout provinces and cities and annually build 4-5 new centres where farmers could undergo three-month courses on farming and breeding.

Dung called on the National Farmer Support Fund to support the association in its work.

 

As scheduled, the fund will receive a total amount of VND300 billion (US$14.5 million) as part of the national budget this year.

 

The fund will continue receiving support from the national budget during the 2012-20 period each year.

 

The People's Committees of provinces and cities have been called upon to provide annual funds to the National Farmer Support Fund in support of farmers.

 

The association plans to co-operate with the ministries of Labour, Invalids and Social Affairs, Agriculture and Rural Development and Industry and Trade in order to develop new operational models on agriculture production and product consumption.

 

Hiep Phuoc Power deadlock unsolved

 

The deadlock involving Hiep Phuoc Power Corporation has remained unsolved though the power supplier’s leader on Wednesday had a working session with the HCMC government.

 

Arthur Ting, chairman of Hiep Phuoc Power Corporation (HPPC) in Nha Be District, on Wednesday worked with city vice chairman Nguyen Trung Tin over the company’s debt and its power price hike proposal.

 

HPPC has repeatedly threatened to stop power supply for the Hiep Phuoc Industrial Park and other major clients because, it said, the more it generates electricity the bigger its debt given rising fuel prices.

 

However, the city government has insisted the company wait for a final decision by the Ministry of Trade and Industry, so HPPC should not stop electricity supply, only to cause production disruptions.

 

Phu My Hung town and 160 enterprises in Tan Thuan Export Processing Zone and Hiep Phuoc Industrial Park now depend on HPPC for electricity.

 

Speaking at the meeting on Wednesday, Ting repeated his company’s earlier proposal that Electricity of Vietnam Group (EVN) take over HPPC’s power grid and then buy power from HPPC to supply the said customers.

 

Vice chairman Tin stressed the ministry would consider this proposal. According to EVN, both technology and equipment at Hiep Phuoc thermal power station are deteriorating, thus causing electricity generation costs to be high, he said.

 

The city will continue to purchase HPPC’s electricity but at an approved price, said Tin.

 

Gia Lai to build 22 large reservoirs along Ba River

 

Some 22 large reservoirs will be built along the Ba River in Gia Lai Province to ensure sufficient water supply for farming and household consumption of hundreds of thousands of people living in the lowlands, an official said.

 

Gia Lai chairman Pham The Dung on Tuesday asked related departments in the province to prepare for the construction of these reservoirs to help stabilize water supply for the low-lying districts, including Kbang and Kong Chro districts and An Khe Town.

 

The province’s chairman came up with the decision after a meeting on Tuesday with related ministries including the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment, and Electricity of Vietnam Group (EVN) to seek measures for the dwindling flow and worsening pollution of the river.

 

These reservoirs in the basin down the river will help ensure regular water source for agricultural production and household consumption for seven districts of Gia Lai as well as for the nearby province of Phu Yen during dry season.

 

Hoang Dinh Chung, deputy director of the provincial Department of Natural Resources and Environment, confirmed the information with the Daily on Wednesday, adding that the river was being wrangled due to construction of An Khe hydropower plant.

 

The developer of this hydropower plant has blocked the river in the upstream section to prepare for its power generation in the coming days, and that project has been creating serious water depletion for the lowlands.

 

Furthermore, many manufacturers are also discharging untreated wastewater into the river, causing serious pollution for the water source.

 

Chung stressed that pollution and depletion of the water source had been directly affecting farming on some 4,000 hectares and threatening the livelihoods of nearly 200,000 families in the three low-lying districts.

 

He said that at the Tuesday meeting, the chairman of the province also required Electricity of Vietnam to release an average water flow of four cubic meters per second at the upstream near An Khe hydropower plant to replenish the water source downstream.

 

Craft villages unable to borrow from banks

 

Traditional craft villages in Vietnam still find it hard to obtain bank loans to expand their business operations even though the Government has released many decisions to support the production model.

 

Speaking at a seminar in HCMC on Wednesday, An Van Khanh, deputy director of the Department of Agro-Forestry-Fisheries and Salt Industry, said the villages could not deal with the complex procedures of lenders.

 

Although the central bank said local lenders always offered villages loans easily, households, who develop craft villages, gave the opposite answer, Khanh said.

 

Bui Thi Dung, director of the industry encouragement agency under An Giang Province’s Department of Industry and Trade, said there were 33 craft villages in An Giang needing capital to upgrade infrastructure and expand business. They, however, could not borrow from banks despite guarantees from the agency.

 

“All craft village development projects lead to nothing given the financial problems,” Khanh added.

 

Nguyen Van Thuan, the owner of a porcelain workshop in Binh Duong Province, told the Daily on the sidelines of the seminar that he had been unable to get bank loans for different reasons after learning about the Government’s incentives, decrees 134, 41 and 61 released in 2004 and 2010.

 

According to the department, craft villages could not borrow money due to small-scale business and lack of mortgaged assets.

 

The department suggested establishing an industry stabilization fund to help craft villages overcome the financial problems. It also advised craft villages to approach supporting programs such as industry encouragement, science development and new rural development projects.

 

Three seaport entry limit for wine, cosmetics

 

Wine, cosmetics and mobile phones will only be imported through the three international seaports of Hai Phong, Đa Nang and Ho Chi Minh City from June 1, according to a document recently promulgated by the Ministry of Industry and Trade (MoIT).

 

The document says that businesses must present an assignment paper or letter of attorney proving that they are authorized distributors or importers of the above-mentioned products, as well as other papers required by current regulations.

 

Import procedures will only be processed at the three seaports.

 

This is part of MoIT’s effort to tighten management over imports in order to protect consumers’ legitimate interests and health, prevent counterfeit and low-quality products, and prevent trade fraud.

 

MoIT also asked relevant ministries, agencies and localities to instruct relevant traders to strictly obey these regulations, and enhance control, inspection and punishment of offenders.

 

Local airlines to raise prices of domestic flights

 

A number of domestic airlines said they would increase their fares shortly after the Ministry of Finance (MoF) issued new ceiling prices for economy air fares on domestic routes.

 

Top carrier Vietnam Airlines will raise its domestic air fares for six routes as of next week.

 

The price of one-way trips on the Hanoi - HCMC route will increase from VND1.05 million (US$50.7) to VND2.227 million ($107.6), excluding value-added tax (VAT).

 

However, Vietnam Airlines said it would offer new fare types which would be lower than MoF ceiling prices by up to 50 percent.

 

For its part, low-cost carrier Jetstar Pacific will increase its one-way fare on this route to VND850,000 ($40.47), with the most expensive type costing VND2.45 million ($116.6) and Air Mekong’s non-stop one-way fare for the Hanoi-Phu Quoc route will be increased to VND2.7 million ($128.57).

 

Air Mekong is also offering passengers a 40 percent discount on flights from Hanoi to Phu Quoc as long as return dates fall on or before the coming weekend.

 

Round-trip tickets for this route are currently listed at VND3.4 million ($161.9).

 

Foodstuff prices fall as supply increases

 

Prices of foodstuff have dropped this month thanks to an abundant supply, provincial officials have said.

 

For instance, prices of processed food, beef and chicken are remaining stable while the price of pork has dropped in many places, said price and market management authorities under the ministries of Finance and Industry and Trade.

 

Nguyen Tan Phuong, director of Dong Nai Food Factory, said as pork is now in abundance, its prices are going down.

 

In Hanoi, An Giang Province and Can Tho City, for instance, the price of pork has fallen by VND2,000 – VND6,000 per kg to VND54,000 - VND55,000 per kg.

 

In Hau Giang and Tien Giang provinces, prices of various kinds of pork have dropped by VND1,000 – VND3,000 per kg.

 

Meanwhile, pig farmers said the price of pork must remain at least VND50,000 per kg to ensure profits, so if this drop continued, they would suffer losses.

 

In Hanoi and Phu Tho Province, prices of chicken and duck eggs have also dropped by VND1,000 – VND2,000 for every 10 eggs.

 

Vegetables in HCMC, Hanoi and Bac Giang Province are also costing much less compared to last week. Prices of cabbage, tomato, and China squash in particular have dropped by VND1,000 – VND2,000 per kg.

 

Rice prices are remaining stable in northern provinces and have started to go down in southern provinces like An Giang and Hau Giang provinces after rising for many weeks.

 

The prices of sea fish and river fish have dropped by 5 percent to 10 percent, or by VND2,000 – VND10,000 per kg.

 

Vietnam's Jan-April car sales jump 20 pct y/y

 

Car sales in Vietnam between January and April rose 20 percent from the same period last year to 37,305 units, the Vietnam Automobile Manufacturers' Association (VAMA) said on Wednesday.

 

The number of cars sold in April fell 3 percent from the same month last year to 9,409 units, the association said in its monthly report. The data did not contain figures from Vinamotor, although VAMA gave no explanation.

 

Vietnamese car maker Truong Hai continued to hold the leading place for the second month in a row, with sales last month rising 16.1 percent from a year ago to 3,104 units, the report said.

 

Truong Hai assembles vehicles including South Korean KIAs.

 

Sales by Toyota jumped 27.3 percent in April from the same month in 2010 to 2,553 units, VAMA said.

 

Fish prices rise in Ho Chi Minh City

 

They have risen by up to 30 percent since April but it is not clear why; some retailers claim their overheads have gone up.

 

Fish prices have soared in Ho Chi Minh City despite supply remaining normal.

 

In retail markets, the prices of some common varieties like scad and sardine have jumped by 20-30 percent since April. More expensive varieties like mackerel, pomfret, and crab are up 5-15 percent.

 

In supermarkets, the prices are up 5-15 percent.

 

Nguyen Doan Phu, deputy director of the Binh Dien Wholesale Market Company in District 8, the disparity in prices between Binh Dien and retail markets has risen from the normal 10-15 percent to 25-35 percent.

 

A fish seller at Pham Van Hai Market in Tan Binh District said prices go up not only due to shortages but also because of cost increases. “Sellers have to use a lot of ice, water, and electricity to preserve the products,” the seller said.

 

Retailers also said the quality of the fish determines their prices and the price difference between the wholesale market and retail markets depends on the freshness of the products.

 

But Phu claimed that prices in retail markets are much higher than in the wholesale market because retailers push up prices when their products sell fast.

 

Supply to the city’s seafood wholesale market has been stable at 680-700 tons per night for more than a month now, he said. It includes 300 tons of marine fish and 300 tons of freshwater fish.

 

China hikes power price by 13%

 

Vietnam will pay 13 percent more for electricity it buys from China with retrospective effect from January1.

 

Following the signing of a contract recently between Electricity of Vietnam (EVN) and Chinese power firms, the rate will go up from 5.1 US cents per kWh to 5.8 cents.

 

Vietnam will pay the difference for power bought so far this year.

 

Sai Gon Tiep Thi newspaper quoted a source from the Ministry of Industry and Trade as saying: “Due to rising input costs and the appreciation of the Chinese yuan, the electricity price has risen.”

 

Since April Vietnam has buying 100 million kWh more from China.

 

This year it will buy around 4.6 billion kWh, or 4 percent of total demand.

 

The supply from China is used in the 12 northern provinces of Thai Nguyen, Cao Bang, Bac Kan, Phu Tho, Vinh Phuc, Son La, Dien Bien, Lao Cai, Lai Chau, Yen Bai, Ha Giang, and Tuyen Quang.

 

Last year Vietnam had bought around five billion kWh.

 

Vietnam’s electricity output in January-April was nearly 32.7 billion kWh, or 10.32 percent higher year on year, of which, electricity purchase was nearly 19.5 billion kWh, according to the Electricity Regulatory Agency.

 

In May the output will average 309 million kWh per day.

 

But Electricity of Vietnam has warned that many major hydropower plants around the country like Hoa Binh, Quang Tri, A Vuong, Yaly, Pleikrong, Se San 4, Mo Water Fall, Ham Thuan, and Da Mi are facing a severe water shortage, Sai Gon Giai Phong said.

 

Korean bank wants to open branch in Vietnam

 

Korea-based Hana Bank plans to upgrade its Ho Chi Minh City representative office into a branch, its president Kim Jeong-tae said.

 

He had expressed interest in setting up operations in Vietnam at a recent meeting with senior Vietnamese financial officials, Korea’s JoongAng Daily reported.

 

But the approval may not be given this year, he told the newspaper.

 

"I want Asia to be our stepping stone to the global market," it quoted him as saying.

 

"Though Vietnam is currently struggling with difficulties, including high inflation, conditions are likely to get better and investments from Korea are expected to increase."

 

To open a branch in Vietnam, foreign banks have to foreign banks must meet legal conditions of Vietnam in three consecutive years and have a total property worth of US$ 20 billion in the fiscal year before applying for the license.

 

They must be experienced in international performance, ranked at least among the average and stable group as classified by international prestige grading organizations, and capable to ensure financial commitments and normal performance even in disadvantaged economic conditions.

 

They must have a minimum capital safety of 8 percent and other safety standards.

Korea’s Shinhan Bank and Kookmin Bank have branches in Vietnam.

 

In 2008 Hana Bank is a subsidiary of the Hana Financial Group, the fourth largest financial group in South Korea with assets of US$125 billion and the 93rd largest in the world.

 

It has branches in New York, Tokyo, Hong Kong, Singapore, and Qingdao and Shanghai (China).

 

Vietnamese coffee prices off peak

 

Domestic coffee price Wednesday reduced by VND200/kg to VND49,000/kg following declines in global prices.

 

For 2.5 percent broken black coffee bean for export, its price stood at US$2.460 per ton, down by US$70 per ton from the previous day.

 

International Coffee Organization (ICO) said that coffee output in Brazil in crop cycle year 2012/2013 may up 12 percent over the current crop 2011-2012 as farmers increased the investment in coffee tree growing after price doubled in the past year.

 

ICO also added the double in price will encourage farmers to invest in plant, thus helping to push production up to 48 million bags at least in the coming crop.

 

ICO’s comment has affected on coffee price both of London (LIFFE) and New York (NYBOT) trading platforms.

 

LIFFE’s robusta coffee price fluctuated in a wide range of US$2,613-2,552 per ton but finished lower than traders’ expectation as Commodity Hedge Funds followed each other to release.

 

Closing the session, robusta coffee future contract for July delivery finished at US$2,585 per ton, down by US$17 per ton (0.7 percent).

 

NYBOT’s arabica coffee price plummeted in the third session this week. Brazilian agriculture ministry said that coffee production in crop cycle 2011-2012 is 9 percent lower than previous year.

 

Arabica coffee future contract for July delivery fell by US$4,8 cent/lb to US$282,6 cent/lb at the finish.

 

Harvesting coffee beans in Indonesia are facing difficulties due to prolonged rainfall, affecting on the transportation and drying. In addition, in Vietnam, combine with insect attack and irregular weather are also impacting on growing process of coffee bean within bearing fruit stage. Robusta coffee price may change in the coming time, accordingly.

 

PV