New corrections weaken market uptrend
 
After the release of positive data related to the consumer price index and trade deficit, shares rebounded on both national stock exchanges last week.

"However, the economy does not seem to be brighter as the ease in the index was mainly due to spending reduction, decreasing industrial production and more inventory," commented FPT Securities Co analyst Le Thi Bich Hang.

On the HCM City Stock Exchange, the VN-Index closed the month of April at 473.77 points, up 1.85 per cent over the previous week.

Daily market value on the bourse averaged VND1.34 trillion (US$63.8 million), or 67 per cent of the previous week's figure.

Meanwhile, on the Ha Noi Stock Exchange, the average value of trades in a session totalled VND734.7 billion ($34.98 million), declining 26.5 per cent compared to the previous Friday's close.

The HNX-Index added 2.6 per cent to 79.86 points.

Speculative cash flow was fairly strong last week, said Hang, focusing on penny stocks. "This source of money is not stable, while the VN-Index is facing great profit-taking after a pretty strong rally."

Short-term investors could sell their shares if the southern bourse's benchmark index tested 480 points, while those who were not holding shares should consider buys when stocks came to appropriate low prices, she said.

Analysts of the financial information website vietstock.vn suggested buys in a number of shares, including blue chip food processor Masan Group (MSN) and some real estate performers such as Song Hong Construction Co (ICG), Khang Dien House (KDH) and Licogi (LCG). In addition, investors were told to sell Agribank Securities Co (ARG), construction material provider DIC (DIC), PetroVietnam Construction Co (PVX) and VNDirect Securities Co (VND).

Foreign investors shifted to net sellers by a margin of VND740 billion ($35.23 million) last month after being buyers by more than VND1.36 trillion ($64.76 million) in March.

Meanwhile, the Asian Development Bank's Asia Bond Monitor report stated that the Vietnamese bond market rose by the highest rate in the region of 16.5 per cent last year.

However, with the $17 billion scale, it was still a small market, with the government bond market larger than the corporate bond market – $15 billion compared to $2 billion.

The Viet Nam Bond Market Association last year assigned eight banks as market makers. This move could boost the size, liquidity and transparency of the market, the report said.

Based on technical analysis, vietstock.vn forecast some strong corrections this week, but said that the uptrend would be retained.

"The market this month will be optimistic thanks to many supporting factors of reducing interest rates," predicted Bao Viet Securities Co analyst Pham Thanh Thai Linh.

Money could be poured slowly into the market, but banks were to offer loans for the securities sector, he added.

The allowance to deploy a shorter payment period to three days from June would also help boost the market.

The first quarter often saw enterprises suffering the worst business results, Linh said. "Entering the second quarter, the situation will be improved thanks to the refund of provisioning in many financial investment firms".

Shares gain with improved value

On the HCM City Stock Exchange this morning - after a four-day national holiday - the VN-Index finished at 474.91 points, increasing 0.24 per cent over last Friday's close.

Advancers overwhelmed decliners by 156-96.

Market value reached VND1 trillion (US$47.6 million), edging up 4 per cent compared to Friday morning's level, as trading volume fetched nearly 67.3 million shares.

However, half of the 30 leading stocks by capitalisation and liquidity retreated.

Only 10 codes posted gains, among which HCM City Infrastructure Investment Co (CII), software giant FPT (FPT), property developer Khang Dien House (KDH) and Vinh Son-Song Hinh Hydropower (VSH) hit their ceiling prices.

The VN30 tracking these 30 stocks advanced by 0.14 per cent to 541.97 points.

On the Ha Noi Stock Exchange, the HNX-Index added value to 79.87 points despite some earlier losses.

Gainers outnumbered losers by 182-91.

The value and volume of trades jumped around 45 per cent to total VN572.9 billion ($27.2 million) and 56.3 million shares.

Habubank was again the most active stock nationwide with 11.8 million shares changing hands. Heavy sells caused the share price to fall 4.3 per cent to VND6,800.

The market is due to resume at 1pm.

Promoting tourism in Russia, Japan and RoK

The Danang City Tourism Promotion Centre has held a meeting with business delegations from Russia, Japan and the Republic of Korea after launching the 2012 international fireworks competition.    

The Russian delegation came to have a final check on tourism services in Danang City and Hoi An before bringing Russian tourists by air to central Vietnam.

The first flight scheduled for May 12 will bring 300 Russian tourists to Danang, to be followed by one flight each day until September.

The Danang City Department of Culture, Sports and Tourism said the city welcomed 850,000 visitors in the first four months of this year (up by 13 percent against the same period in 2011), of whom 25 percent were foreign tourists coming mainly from Japan and the Republic of Korea.

Province urged to boost cross-border trade
 
The Minister of Industry and Trade urged authorities in the north-western province of Dien Bien to work on strengthening exports to nearby markets of China and Laos.

Minister Vu Huy Hoang made the suggestions during a visit to Dien Bien, where he urged local Government and business leaders to focus on the coffee, rubber, tea and minerals sectors, areas in which the province already had a competitive advantage.

Hoang said Dien Bien enjoys a favourable trading position as it borders China's Yun Nan Province and the Lao province of Phongsali.

"The province has an important location, and as it is still grappling with many difficulties related to its economic development, the ministry will support Dien Bien to enhance local industry and trade," he said during a recent visit, which was aimed at checking on provincial economic development strategies.

Although the province faced many challenges, industrial production still achieved a growth rate of 18 per cent, with a total revenue at VND671 billion (US$31.95 million) last year.

The province's mining sector saw especially strong development, notching up a year-on-year growth rate of 56.8 per cent growth, while processing industries registered a 16.6 per cent growth rate for 2011.

Industrial output in the first quarter of this year saw a 12.4 per cent increase on the same period last year.

The province's retail goods and services turnover reached VND4.2 trillion ($200 million) last year, an increase of 34.3 per cent against the previous year.

Total export value hit $16.5 million in 2011, up 24 per cent from 2010. Dien Bien also saw a trade surplus, with $10.3 million in exports against $6.2 million in imports, bucking the national trade balance of a deficit.

Le Duc Vinh, deputy director of the ministry's Planning Department, said Dien Bien enjoyed an growth rate in industry and trade that was higher than the national average last year. The results had been positively reflected in the province's GDP (gross domestic products) growth rate of 10.19 per cent, while the national GDP growth was at 5.9 per cent, said Vinh.

Do Thang Hai, director of the Viet Nam Trade Promotion Agency (Vietrade), said the ministry would support the province's enterprises to participate in local and overseas exhibitions and fairs, while also offering support in expansion of e-commerce and development of better strategies to bolster exports to China.

Bui Huy Son, director of ministry's Asia-Pacific Market Department, asked provincial authorities to list local companies and export staples so that the ministry could better support local businesses in the search for foreign partners, specially in China and Laos.

Electronics firms battle downturn
 
Domestic electronics businesses have been grappling with a slowdown in sales since the beginning of the year.

The Ministry of Industry and Trade's recently released statistics revealed that only refrigerator and freezer sales saw a year-on-year increase of 10.5 per cent in the first quarter, while other products experienced slumping sales, with air conditioners witnessing the greatest drop of 30 per cent.

Ngo Thanh Dat, marketing director of Tran Anh Company, blamed the trend on skyrocketing fees for prime retail space, which he said has led to less sales as businesses stocking electronics products struggle to secure good locations for their stores.

The Tran Anh Company recently lost half of the retail space used by its electronics supermarket in Long Bien District.

The high volume of stockpiled electronics due to slumping purchasing power and harsher competition from foreign rivals in the domestic market were also factors, he said.

Media Mart marketing director Nguyen Thanh Hai said his electronics supermarket also witnessed a significant drop in sales after the Tet holiday, resulting in a large quantity of electronics, especially electrical appliances, in stock.

As consumers cut down on spending, electronics supermarkets had to focus on providing cheap electronics while also working on promotion programmes to attract more customers, Hai said.

However, the current slump in domestic purchasing power would help motivate electronics enterprises to improve their long-term development strategies and prepare sufficient financial sources to expand their business in the time ahead, industry insiders say.

Viet Nam Fan Joint Stock Co planned to open retail stores in rural areas in a move to exploit new business opportunities, said the firm's deputy general director Tran Thach Quang.

Better customer-care and warranty services were also a priority, Quang said.

Media Mart general director Le Quang Vu, meanwhile, emphasised the importance of cutting unnecessary costs to reduce product prices and offering attractive promotion programmes.

The Ministry of Industry and Trade has predicted the local electronics market would rebound as demand for electronics such as fans, air conditioners and refrigerators would rise during the upcoming summer.

Supply woes tie up garment sector
 
Weak raw-material supply is challenging the domestic garment industry, according to the Viet Nam Textile and Apparel Association.

The association reported that each year, Vietnamese garment companies needed 6 billion metres of cloth, of which 5.2 billion metres had to be imported.

About 70 per cent of other materials were also imported, the association added.

Director of Sai Gon Garment 3 Pham Xuan Hong said that his company imported 70 per cent of cloth to meet production demand.

Bui The Kich, director of another large raw material importer Dong Nai Garment Joint Stock Company, said that only 30 per cent of domestic cloth and 50 per cent of other domestic materials were used by his company.

On top of this, the quality of Vietnamese cloth did not meet international standards, and all machinery and chemicals were also imported.

Vietnamese companies were struggling to produce high-end products, not to mention their production capacity was not big enough to take in large orders from overseas, Hong said.

Unskilled workers and weak co-operation among companies was also challenging the industry.

These shortcomings had prevented companies from competing with their rivals from other countries.

To solve the problem, a professional material supply chain must be established, experts said.

The association said that domestic distribution systems should be widened in the future, and the industry should also focus on developing Vietnamese garment trademarks.

The industry would try to expand its market share in neighbouring countries including Laos, Cambodia and China, the association said.

In recent years, garments and textiles have been one of Viet Nam's key exports, with total turnover of about US$14 billion per year. However, this figure accounted for only 3 per cent of the global figure.

The sector has targeted a $15 billion export turnover in 2012, a surge of 12 per cent against last year's figure.

Cambodia snaps up Viet Nam plastics

Plastics exports to Cambodia earned US$20 million in the first quarter of this year, reported the Viet Nam Plastic Association.

In March alone, export turnover reached $8 million, with plastic bags accounting for about 40 per cent of the value, the association said, noting that Vietnamese companies faced few challenges when exporting this product to Cambodia due to a lack of strict regulations in the neighbouring nation.

Packaging materials accounted for another 17.6 per cent of the total export value during the period.

Exports of plastic construction materials to Cambodia were also expected to recover this year as the building industry recovered.

The association warned, however, that Vietnamese plastics weren't competitive with those from other countries, and it suggested the industry aim to improve technology and cut costs.

Cambodia is now one of the biggest markets for Vietnamese plastics, following Japan, the US, Germany and Thailand.

Cooking gas prices fall sharply

The price of liquefied petroleum gas (LPG) was slashed by VND2,900 (14 US cents) per kg yesterday, meaning cooking gas prices would be cut by about VND35,000 (US$1.7) per tank weighing 12kg.

Key gas dealers, including PetroVietnam Gas, Saigon Petro and Vinagas, affirmed the price adjustment.

This was the sharpest cut in gas prices since the beginning of the year, helping the retailing price of cooking gas fall to around VND370,000 ($17.8) per tank.

The key enterprises said gas prices showing signs of easing on the world market were the main reason for the domestic cut. Many firms had inked LPG import contracts for May with a price of about $850 per tonne, a level significantly lower than last month's figure of approximately $1,000.

Cooking gas prices had increased strongly earlier this year, soaring up to VND90,000 ($4.3) per tank within the first two months of the year, according to the Ministry of Finance's price management department.

Retailing prices began to fall from March 3 when the ministry decided to exempt gas dealers from import duty, but they were down insignificantly VND16,000-19,200 ($0.77-0.92) per tank in March due to high world prices.

Cash to flow back into real estate

Funds are again trickling into the property market and promising to revive it from the long slump, analysts have said.

Many believed that after four years in the doldrums and several developers going bust, the real estate market has bottomed out.

The Government has taken a series of measures like loosening credit and lowering interest rates, including for property loans.

The State-owned Bank for Investment and Development of Viet Nam has already earmarked loans worth VND4 trillion (US$192.13 million) at 16 per cent per year interest to individuals and households buying housing in projects it funds.

These loans are for up to 15 years and 85 per cent of the value of the property.

Several other banks have also unveiled plans to provide mortgages.

Dong Nam A and An Binh Joint Stock Commercial Banks have announced they will provide personal loans worth VND1 trillion ($48.03 million) for buying, building, and repairing houses.

Military Joint Stock Commercial Bank has signed an agreement with Vingroup Joint Stock Company to lend to people buying a house in the latter's Vincom Village 80 per cent of the value at a mere 10 per cent for the first six months.

Though other banks' interest rates remain high, they are 2 per cent lower than a few months ago.

Phan Thanh Mai, president of the Viet Nam Real Estate Association, said the market was likely to see a revival in the second quarter thanks to the Government's loosening credit policies.

Analysts also said substantial amounts of overseas remittances were being pumped into the real estate market.

According to data from the National Financial Supervision Committee, 52 per cent of last year's remittances of $9 billion was invested in property.

Around VND100 trillion ($4.80 billion) were likely to be invested this year if remittances climbed to $10 billion, they said.

Developers are trying to lure buyers by offering promotions. Hoang Anh Gia Lai Group, for instance, recently announced it would possibly cut prices of apartments in some projects by 50 per cent.

Others accept payments in monthly instalments over several years on which apartment buyers do not have to pay interest either.

Policies urged to boost border trade

The import and export of goods via auxiliary border gates and crossings outside economic zones need managing dependent on localities, businesses and commodity categories, Deputy Minister of Industry and Trade Nguyen Cam Tu has said.

The trade, also known as cross-border trade, with small volumes worth less than VND2 million (US$96), was an exception in international trade and an incentive for residents living around borderlines, he said.

Trade value via auxiliary border gates and crossings contributed to two-way trade between Viet Nam and neighbouring countries.

For example, the trade value via Viet Nam – China auxiliary border gates and crossings in 2010 was double that of 2009 and it kept increasing by 50 per cent in 2011.

However, so far, Viet Nam has yet to have any measures to manage and supervise traders who have their goods transported via auxiliary border gates and crossings.

Taking advantage of the poor management, foreign traders buy large amounts of Vietnamese farm products and hire local porters to carry them to the other side of the borderline. Moreover, Viet Nam's policy on auxiliary border gates and crossings is not compatible with those of other countries.

For example, China does not recognise the Ban Vuoc auxiliary border gate in northern Lao Cai Province, thus there is no Chinese customs officer, causing blocked goods at the gate.

The province's Customs Department vice head Pham Ngoc Thach said that counter auxiliary border gates in China were opened and closed with different schemes, affecting cross-border goods flow.

According to the ministry, loose management can pave the way to the import of substandard goods to Viet Nam or the export of necessities including sugar and rice.

Tu said that the ministry was planning to improve the relevant legal framework by developing a circular to replace the current Circular 13/2009/TT-BCT dated three years ago.

Accordingly, the new legal document will include the issuance of border-trade codes to collect data about traders whose goods are transported via auxiliary bordergates and crossings.

Delta targets annual 12% growth over next decade
 
The Cuu Long (Mekong) Delta region targets annual economic growth of 12 per cent through 2020, hoping to raise per capita income to VND70 million (US$3,350) per year, according to the Southwest Region Steering Committee.

The region will be developed into a focal economic zone, an area specialising in food and fisheries produce, according to a report released at an exhibition that opened in Can Tho yesterday to showcase its achievements in the past decade.

Speaking at the inauguration, Deputy PM Vu Van Ninh, who is also head of the Southwest Region Steering Committee, reaffirmed the strategic role played by the Cuu Long (Mekong) Delta in the country's economy.

"It is headed in the right direction in tapping its advantages and potential and contributing to the country's development," he added.

In the first decade of this century, the region grew at 11.7 per cent and accounted for 18-19 per cent of the country's GDP and 10 per cent of exports.

Its average annual industrial growth rate in the period was 18.8 per cent.

Eleven industrial parks were established, attracting $743 million and offering over 70,000 jobs.

But a report released at a conference held to promote investment in the region on the exhibition's sidelines on Thursday said the achievements fell short of potential.

Economic development remained unsustainable and not very competitive, and faced high risk. Agriculture was threatened by climate change and rise in sea levels. Infrastructure was not well developed, making the region less attractive to investors.

There was a shortage of qualified and skilled labour.

The region also suffers from a brain drain, losing out to HCM City and the south-eastern region, leading to shortages of qualified workers.

At the conference, the steering committee called for investments of nearly $1.6 billion into 178 major projects.

Nguyen Phong Quang, its deputy head, said the region would tap gas reserves off the south-west coast, set up wind and thermal power plants, and further develop transport, irrigation, and other infrastructure facilities.

More than 480 businesses in Can Tho and other Mekong provinces are displaying their products at nearly 1,200 stalls at the exhibition which will remain open until May 1.

The inauguration of the fair, being held to mark the 37th anniversary of Reunification Day, was attended by Politburo member Le Hong Anh.

Le Hong Anh and Deputy PM Vu Van Ninh inaugurated the Vo Van Kiet Highway linking Can Tho city with Tra Noc Airport on Thursday.

The 6.9-km long, 50-metre-wide road cost VND1.85 trillion ($89 million) raised by issuing Government bonds.

Farming sector must focus on local market
 
Agricultural processors should develop their local distribution systems and not just focus on exports if they wish to develop sustainably, said an official at the Ministry of Industry and Trade (MoIT).

Ho Thi Kim Thoa, deputy minister of industry and trade, said the domestic market for farming goods and services in 2011 showed a year-on-year increase of 24.3 per cent and reached VND2,004 trillion (US$95.4 million).

She said that if processors only focused on exports and did not expand their share of the local market they would be vulnerable to global downturns. Meanwhile, she said, foreign firms had expanded their market share in Viet Nam.

Thoa cited the example of Viet Tien Garment, Nha Be Garment, Garment 10, Biti's Footwear and Vinamilk that had successfully boosted their share of the local market.

However, numerous processors of farming products have faced difficulties developing their share of the local market.

Manh Quan Dong, director of Phuong Dong Export Vegetable and Fruit Company in the northern province of Bac Giang, said his company had encountered many challenges in the local market.

Dong said his company was based far from Ha Noi and other key economic centres with high consumption levels, which meant transport costs were high.

Tran Hong Duc, director of Bac Giang Export Farming and Food Processing Factory, said many processors had limited capital and struggled to meet the costs of warehouse fees.

Tran Thi Hong Hoa, from Ha Noi Trading Company (Hapro), said that the supermarket chain set high quality standards on the products it sold, which many domestic producers could not meet. She also said it was essential to have a trademark.

Thoa said local firms needed to invest in a distribution system and promote themselves better.

She added that the ministry had organised meetings between suppliers and retailers such Hapro and Saigon Co.op to help sell their products.

Air Lease buys 8 Boeing 787s for Vietnam Airlines

US aircraft leasing firm Air Lease said Monday it has bought eight new Boeing 787-9 Dreamliner aircraft to lease to Vietnam Airlines.

Financial details of the purchase were not revealed. The catalog value of the planes is $1.8 billion.

"Deliveries of the eight 787-9 'Dreamliner' aircraft are scheduled for 2017 and 2018. This transaction marks ALC's longest lead time for a lease placement to date," Air Lease Corporation said in a statement.

Built largely with lightweight composite materials, Boeing says the Dreamliner is about 20 percent more fuel efficient than similarly sized aircraft and is the first mid-size airplane capable of flying long-range routes.

Boeing delivered the first 787 to launch customer All Nippon Airways last September, three years behind schedule.

The 787-9 is a slightly bigger version of the 787-8.

ALC, co-founded in 2010 by aviation pioneer Steven Udvar-Hazy and John Plueger, also announced the purchase of a Boeing 777-300 extended range aircraft from Macquarie Aviation for a long-term lease to Emirates, a new customer.

In addition, the company unveiled a clutch of new aircraft leases, to KLM, Sichuan Airlines and LAM airlines.

"These global lease placements demonstrate the growth of our widebody business in Asia, the addition of Emirates to our customer base, our increasing level of business with KLM, as well as our further expansion into proven carriers in Southern Africa such as LAM," said John Plueger, president and chief operating officer, in a statement.

The latest 787-9 order brings to 12 the number purchased by the Los Angeles-based firm. ALC bought four at the Paris Air Show in June.

The ALC announcement came as The Wall Street Journal reported the company was near to clinching a mega deal with Boeing to buy 60 of the planned 737 MAX aircraft, citing people familiar with the talks.

The 60 planes have a list price of roughly $5.7 billion.

An ALC spokesman confirmed to AFP the company was in negotiations with Boeing.

The Chicago-based Boeing, the world's biggest aerospace and defense company, launched the updated 737 -- powered by a more fuel-efficient engine -- last August.

Boeing's decision to offer its best-selling 737 with a new engine, rather than building an all-new aircraft, was seen as forced by the competition from the Airbus A320neo.

Boeing says it has more than 1,000 orders and commitments for the 737 MAX, which is still in the design phase. The first deliveries are scheduled in 2017.

Travel agencies cancel tours due to high costs

While the long holiday, which ended yesterday, was expected to be a bonanza for local tour organizers, many of them in fact had to cancel their offered tours at the last minute due to the exorbitant accommodation and service costs in tourism spots around the country.

The Ho Chi Minh Tourism Association (HTA) and national carrier Vietnam Airlines (VNA) last week unveiled a promotional tourism program targeting domestic tour packages which was expected to bear sweet fruits from the first holiday it was applied to -- the four-day holiday to mark the national Reunification Day and International Labor Day between April 28 and May 1.

However, though airfares were slashed by 40 percent for certain services as part of the program, local travel agencies still had to cancel their discounted travel packages as accommodation and services costs skyrocketed.

In the central city of Da Nang, tour organizers had to seek intervention from the municipal Department of Culture, Sport, and Tourism, as hotels offered exorbitant prices for rooms and other services when it was still a week ahead of the international fireworks festival set to take place there.

A three-day-two-night tour package to Da Nang to attend the fireworks festival costs VND6 million per tourist, 30 percent higher than the rate last year, and 15 percent more than a tour to Thailand, travel agencies said.

Tour organizers thus demanded the cancellation of 1,400 rooms they had booked due to the expensive fees.

“Customers for domestic tour packages dropped by 40 percent compared to the normal rate,” said HTA deputy chairwoman Nguyen Thi Khanh.

Tran Van Dong, director of Phu Quoc-based Huong Bien travel agency, said room prices of 3- or 4-star hotels and resorts account for as much as 40-50 percent of the total cost of a tour package.

“Hence, if these expenses are increased, tour organizers have nothing left to earn profits, and it’s understandable that they cancel the tours,” he explained.

“VNA and travel agencies’ bid to boost domestic tourism has become fruitless due to the unreasonably high prices,” said Tran The Dung, deputy director of The He Tre Travel Co.

“This occurs whenever holidays arrive, but relevant authorities seem unable to control it.”

Khanh, of HTA, said that on April 25 many travel agencies announced that they had returned thousands of air tickets to VNA as they failed to sell their packages.

The organizers accepted losing the deposits and paid fines to return on average of 60 – 100 tickets each, while some even gave back nearly 1,000, said Khanh.

“We had to return 600 tickets for tours to the central part of Vietnam, and 300 for package to Hanoi,” said L., director of a HCMC-based travel agency.

“The room price in Da Nang on April 30 was VND1.4 million per night, while the normal rate is only VND500,000.”

Dung, of The He Tre Co, also said he had to return 70 air tickets for a similar reason.

“We also lost the deposits at some resorts in Nha Trang, Phu Quoc, and Phan Thiet,” he added.

Certified producers lack support

Agricultural products under the Good Agricultural Practices standard are widespread but farmers face high production costs and lack markets for their products.

Since January, 2008, the VietGap standard has applied to fresh fruit and vegetables, limiting the levels of hazardous substances and produce that doesn't physically measure up.

Control Centre Director for HCM Clean Vegetable Alliance Mai Van Phu said

not only provincial departments of agricultural and rural development could grant GAP certificates so it was difficult to control certification.

Phu said to complete a one-year VietGap certification, farmers had to pay hundreds of million dong which included the cost of analysis and evaluation of soil and water, training farmers and so on.

Dr Vo Mai, deputy chairwoman of the Viet Nam Gardening Association, said the Government must correct the Gap certificate granting procedure and come up with a logo.

Nguyen Cong Thanh, head of the Institute of Agricultural Science for Southern Viet Nam, said that since 2011 domestic consumption didn't have a separate channel; traders just bought GAP products on the same market as non-GAP products.

Dong Ngoc Lieu, head of Than Cuu Nghia Co-operative in Southern Tien Giang Province, told the Cong Thuong (Industrial and Trade) newspaper that the co-operative had more than 300ha of vegetables while "safe" vegetables accounted for just 8ha.

The cost of safe vegetable production was quite high, while prices of GAP products were not higher than non-GAP ones and were sometimes lower.

"Meanwhile some supermarkets didn't buy safe vegetables due to high prices, so farmers had to sell their safe vegetables in the market," Lieu said.

Currently, products are only certified VietGAP generally. The authorities have not yet adhered to a trademark (logo) for VietGap products. So producers cannot show customers the products are VietGap. Conversely, consumers do not have evidence the products are VietGap products. The shape of VietGAP products are similar to other ordinary products on the market.

Gap products with the safety certification logo VietGAP had been seen as a passport to entering the domestic market and expanding the export market, introducing innovation and process improvements to increase product competitiveness, Lieu said.

Issuing logos and their management must be controlled tightly to avoid fakes, Thanh said.

"Developing GAP standards in producing agriculture should link many more stakeholders including bank, mass media, buyers, traders, co-operatives and enterprises to help stabilise output for GAP products," he said.

"The authorities should raise the awareness of health protection of people who use safe vegetables."

The Prime Minister also issued Decision No 01/2012/QD-TTg in January about supporting farmers to apply the GAP standard.

The Government will provide 100 per cent of the capital needed to survey agricultural cultivation and 50 per cent of costs to build facilities and will help train employers and support a one-time GAP certificate free of charge.

VN helps raise Cambodia’s rice productivity

Vietnam ’s high-quality fertilizers and its latest science and technology transferred to Cambodia have helped raise rice productivity in the neighboring country, a conference was told in Cambodia on April 29.

The conference, held by the Binh Dien fertilizer company, with the participation of Cambodian Deputy Prime Minister Men Sam On, heard that with the widespread use of Vietnam ’s fertilizer, productivity on Cambodian rice fields has tripled to 5-6 tonnes per hectare during the past 10 years.
More than 15 percent of Binh Dien’s annual fertilizer output of 1 million tonnes of NPK is sold in Cambodia .

Deputy Prime Minister Men Sam On said the Cambodian government is prioritizing agricultural development to ensure food security, reduce poverty among farmers, and gradually increase rice exports.

Major export industries struggle to stay competitive

Major export industries need to join in global distribution chains, improve the quality of their products, and develop recognized global trademarks if they are going to boost their competitive capacity and see sustainable export growth, says Pham Van Chat, an expert with the Ministry of Industry and Trade.

The ministry has been actively promoting Vietnamese products to major European supermarket chains, seeking to enter these markets more aggressively via their distribution networks, Chat said.

Meanwhile, major export industries report that they continue to face challenges to sustainable development.

Despite seeing annual growth in exports as high as 20 percent per year, the garment industry continues to face challenges, including inefficient production and unstable markets and financial resources, said the deputy general secretary of the Vietnam Textile and Garment Association, Nguyen Van Tuan.

Garment makers have often focused on maintaining jobs in the sector but not on improving processes, while Chinese and Japanese garment makers have developed more efficient production lines, Tuan said.

Domestic garment makers have also failed to develop strong support industries and local suppliers of cotton and fibres, he said.

The wood products industry has seen annual export value jump from US$219 million in 2000 to $3.9 billion in 2011, but the industry still remains unprofessional and uncoordinated, suggested HCM City Fine Arts and Wood Processing Association vice chairman Tran Quoc Manh.

Nearly the entire industry consists of small- and medium-sized enterprises with unskilled workers and low output, Manh said.

The industry has also had difficulties in obtaining materials and are forced to import up 70 percent of their raw materials to meet demand, he added.

The seafood industry, despite exports exceeding $6 billion in 2011, has faced a similar problem in sourcing quality raw materials for processing and was also grappling with anti-dumping cases and strict quality standards in export markets though the industry, said Vietnam Association of Seafood Exporters and Producers (VASEP) general secretary Truong Dinh Hoe.

The domestic seafood industry needs more assistance from the Ministry of Agriculture and Rural Development to ensure supplies of raw materials that ensure the quality and hygiene of processed products, Hoe said.

Vietnamese seafood gaining popularity in RoK

The Republic of Korea (RoK) is becoming a lucrative destination for Vietnamese seafood, say the Vietnam Seafood Exporters and Producers’ Association (VASEP).

At present, the RoK is one of the five largest importers of Vietnamese seafood products, accounting for 7.8 percent of the country’s total seafood exports.

The three main seafood’s Vietnam exports to the RoK are squid, shrimp and fish.

To take advantage of this huge potential market, seafood experts recommend that businesses study and clearly understand the RoK market’s demands and improve the quality of their products.

VASEP will liaise with the Korean Fisheries Trade Association (KFTA) to keep up to date with recent developments and learn of new demands in the RoK’s market.

Domestic tourism threatened by holiday profiteers    

The long holiday, which come with the inevitable rise in demand, have led to skyrocketing prices, along with opportunities for price-gougers.

The inspectorate of the Ba Ria-Vung Tau provincial Department of Culture, Sports and Tourism received a petition from a hotline set up by a group of tourists from HCM City which said seaside seats were going for VND1.1 million (USD52.56). The price on a normal day would be VND20,000-VND30,000 (USD0.95-USD1.43).

The agency said they would investigate and apply penalties when needed.

Tran Dang Minh Uyen, Deputy Director of Lua Viet Picnic Company, said tourists at Vung Tau had to pay VND150,000 (USD7.16) per seat at Vung Tau Beach, five times the normal rate.

Uyen said that room prices at small-sized hotels also increased three-fold, to an average of VND2 million (USD95.55) per night.

In Danang room prices were also higher. On average, they cost VND350,000 (USD16.72) on a normal day, but shot up to VND1.4 million (USD66.9) for holidays, said Tran The Dung, Deputy Director of The He Tre Travel Company.

The Ba Na cable service went from VND320,000 (USD15.28) per person to VND380,000 (USD18.15).

Room prices in Hue and Hoi An doubled to VND800,000 (USD38.22).

Many tourists to Dalat also complained of extreme price hikes at hotels.

Many blame the price hikes for the fall in the volume of domestic tourism this holiday season.

Tran The Dung said: “We’ve seen a 30% decrease in the number of tours booked to the central region from last year. If something drastic is not done, this could harm the entire tourism industry.”

At the moment, customers can find cheaper rates to travel abroad to Cambodia or Thailand during Vietnamese holidays.

Tran Dang Minh Uyen warned that if this type of price manipulation continues, people will begin to turn their backs on Vietnamese destinations for their holidays.

Nguyen Thi Khanh, Vice Chairwoman of Ho Chi Minh City Tourism Association, said the agency has made several proposals to municipal authorities that could deal with price-gouging during the holiday seasons, and help the domestic tourism industry in general.

State budget revenues rise 3.5%

Vietnam’s State budget revenues reached VND234 trillion (US$11.23 billion) in the first four months of 2012, up 3.5% over the same period last year, according to the Ministry of Finance.

The State budget increased by VND61.62 trillion (US$2.96 billion) in April. Domestic revenues rose VND6.51 trillion (US$312.48 million) while exports fell by VND1.3 trillion (US$62.4 million).

As of April 20, Vietnam had raised VND37.55 trillion (US$1.8 billion) through Government bonds, accounting for 37% of the 2012 target.

The financial sector also swapped VND350 billion (US$16.8 million) in Government bonds to reduce the number of bond codes and boost market liquidity.

Vietnam has fast expansion rate in bond market in 2011: ADB reports

The latest edition of the Asian Development Bank’s (ADB) Asia Bond Monitor released on April 26 assesses that  Vietnam has fast expansion rate in bond market in 2011.

In 2011, Vietnam’s bond market expanded by 16.5 per cent -- the fastest rate in the region.

At US$17 billion, the market was still one of the smallest in the region, with the government bond market far larger than the corporate market at US$15 billion versus US$2 billion.

Gross issuance of government debt last year rose by 9.7 per cent while corporate sales tumbled by 94.2 per cent

The report said emerging East Asia's local currency bond markets expanded 7.0 per cent to US$5.7 trillion in 2011, driven by double-digit growth in the region's corporate bond markets.

Optimism in HCM City real-estate market    

There are optimistic signs of investors coming back to the real-estate market in HCM City after the State Bank of Vietnam (SBV) announced to lower interest rates.

The general director of Dai Tin Real Estate Service – Trading Joint Stock Company, Phan Duc Tri, boasted that his company has made considerable achievements over the last week, when 16 out of 21 lots in a project in My Phuoc Commune, Binh Duong Province, which, in early April, that appeared to be unsalable, received orders.

Tri attributes this to the recent SBV decision to lower deposit interest rates to 12 percent on April 11, increasing investor confidence.

Similarly, right after Hoang Anh House Construction and Development Joints Stock Company announces its plan to sell the Hoang Anh Minh Tuan project in District 9, Ho Chi Minh City, more than 20 real estate agents has contacted to become distributors.

According to Luong Tri Thin, Chairman of  Dat Xanh Group, another factor that helped attract investors back into the market was price policy. Thin said that real-estate price in Ho Chi Minh City and surrounding provinces have also seen large reductions, of 30% – 50%, in comparison with several years ago.

Chairman of Hoang Anh Gia Lai Group, Doan Nguyen Duc, said that once prices reach reasonable levels, people would certainly buy.

Duc added that low prices play a role in factor saleability, and can bolster demand in a gloomy market. In fact, although the company’s gross profit in 2011 did not meet their target, Hoang Anh Gia Lai still made more than VND1.7 trillion from real-estate projects.

He says that, although supply remains high in the real-estate market, the demand for housing in mid and low-end sectors is always there and has great potential for development.

“When macro-economic factors become favourable come in line with low interest rates, along with a higher per capita GDP, the real-estate market will develop,” Duc says.

The senior manager of CBRE Vietnam, Adam Ruby, also said that currently housing supply in this sector remains low in HCM City, but will likely rebound when economic conditions get better.

Jan-Apr int’l tourist arrivals grow 9% y-o-y

Foreign visitor arrivals in HCMC in April are forecast to reach 275,000, taking the total in the year to date to 1.25 million, a 9% year-on-year rise, said the HCMC Department of Culture, Sports and Tourism.

Fewer tourists have come here in the city this month, the first month of the low season, with a decline of 52,000 visits versus March but a 10% year-on-year pickup. Tourism services are projected to earn the city some VND5.8 trillion in April alone and a total of VND23 trillion in the first four months.

Several HCMC-based travel companies have reported mild growth this year and few are optimistic about business prospects in the coming months due to dwindling numbers of visitors and surging service prices.

In the tour brochures released by many companies, prices for some package tours in the winter season in late 2012 and early 2013 will move up 5-10% given higher air ticket prices, transport costs and hotel room rates.

Domestic airfares for tourists have been hiked twice, road transport fees have increased 5-10%, and hotel rooms have marked up at least 2%. Therefore, travel firms cannot keep tour prices unchanged.

The exchange rate quoted by hotels early this week was VND21,000 to the dollar, higher than at banks. However, news that the greenback would appreciate late this year has led most hotels to revise up the exchange rate to VND21,500, said a tour operator in HCMC’s District 1.

Tu Quy Thanh, director of Lien Bang Travelink, said his company informed its foreign partners of tour price hikes early this year. But strong price volatility may cause further tour price adjustments some time this year.

“The international tour price quotation practice does not allow this; prices for the whole year must be announced in advance so that foreign travel agencies can sell tours to customers. We’re calling for our partners’ sympathy for the volatile price situation in Vietnam but we’ve got no feedback from them,” said Thanh.