Acute shortage of raw coconuts in Mekong Delta 

Coconut pulp processing plants are currently facing an acute shortage of raw material for processing, even though they are buying the raw material at a higher price in the Mekong Delta.

They are presently only operating at 20-40 percent of their capacity, leading to many unfulfilled contracts and much unemployment amongst workers.

Coconut prices have doubled since the same period last year. Traders in provinces like Ben Tre and Tra Vinh have paid VND100,000 -110,000 for a dozen coconuts.

According to the Department of Industry and Trade in Ben Tre Province, raw coconuts are being exported to China, Thailand and Cambodia leading to a shortfall of raw material for domestic companies.

The Ministry of Finance has recently decided to raise the export tariff on raw coconuts to three percent, which will take effect from May 20.

VN leading fertilizer producer to expand agri-business in Cambodia 

PetroVietnam Fertilizer & Chemicals Corporation (PVFCCo), a major fertilizer manufacturer in Vietnam, announced Saturday plans to expand its agricultural technical transfer programs for Cambodian farmers in at least three more provinces over the coming year.

“In 2011, PVFCCo intends to maintain its leading position in the domestic market while expanding its activities abroad. In Cambodia, we are particularly keen to continue implementing our programs while improving our image and position in the local market,” said Mr. Nguyen Hong Vinh, PVFCCo’s vice president for sales and distribution.

He was speaking at an announcement ceremony in the Cambodian capital Phnom Penh.

The manufacturer, which shares almost 50 percent of the domestic demand for urea, opened its Phnom Penh representative office in May last year.

PVFCCo has since then launched agricultural technical transfer programs for local rice farmers. Numerous workshops have been held and demonstration plots established in several provinces such as Battambang, Kompong Chhnang and Takeo.

Mr. Vinh said PVFCCo would continue to expand such technical transfer programs to farmers in Kompong Cham, Kompong Thom and Kandal provinces.

“Besides the domestic market, PVFCCo has been trying to establish positions in other regional countries. Cambodia is our top priority thanks to its close geographic location, economic structure and cultural attitudes,” he added.

In addition to training Cambodian farmers, PVFCCo donated 50 tons of urea to poor farmers in Svay Rieng and Prey Veng provinces last year. The company also donated US$25,000 to the families of victims of the Diamond Island Bridge stampede tragedy last November that killed almost 350 people.

PVFCCo enjoyed a successful year in 2010 with impressive business results.

At its annual meeting of shareholders in HCM City on April 8, the company announced an after-tax profit of 1,703 billion dong (US$82 million) for 2010 which was 84 percent higher than forecast by the company. Sales came to 6,999 billion dong (US$337 million) in the same period. During the year, PVFCCo produced 807,000 tons of urea which was 9 percent above the company’s forecast and more than 10 percent higher than average production in recent years.

Prices of agro and aqua products soar in Mekong Delta 

Prices of many agricultural and aqua products have surged in the Mekong Delta due to insufficient supplies.

Nguyen Van Dao, general director of Go Dang Seafood Joint Stock Company in Tien Giang Province, said on April 21 that the price of tra catfish has set a new record.

Exporters have scrambled to buy the fish at an all-time high price of VND28, 300-28,500 per kilogram, he added.

However, Mr. Dao said, the volume of fish during harvesting was not much. Due to escalating input costs, farmers have not dared to breed more fish.

Due to the severe shortage, catfish exporters have been unable to take the initiative to sign export contracts, except those who have their own farms.

Ca Mau, Bac Lieu and Soc Trang provinces have continued to see a shortage of tiger shrimps, with prices continuing to rise.

These provinces have faced shrimp shortage because of widespread epidemic diseases in shrimps in the region.

One kilogram of shrimps loading about 20 pieces costs VND260,000-265,000 and one kilogram loading 30 pieces of shrimps costs VND190,000-200,000.

In Dong Thap and Tien Giang provinces, traders are boosting the purchase of rice with prices of VND8,200-8,250 per kilogram of five-percent-broken rice and VND8,100-8,150 per kilogram of 15-percent-broken rice.

Merchants have bought long-grain rice from farms at VND6,000 per kilogram and scented-rice at VND6,300 per kilogram.

Purchase of live pigs has also risen sharply in the region. 

Besides local merchants who have bought pigs for daily local consumption, merchants from outside have rushed to the Mekong Delta to buy pigs for markets in Ho Chi Minh City and the northern and central provinces.

Locals still shun credit cards due to high fees 

Despite the central bank restricting dollar transaction in the economy, local people still hesitate to use international credit card to use overseas due to high usage fees.  

Commercial banks have encouraged customers who have to travel abroad to opt for international credit card to meet their demand for US dollar.

Lenders including Asia Commercial Bank (ACB), Eximbank, DongA Bank and Vietnam International Bank constantly released many promotional packs for credit card services, including one-day credit card issue, preferential foreign exchange rates and low margin rates.

Bui Tan Tai, deputy general director of ACB, said credit cards offered a safer way of money management than cash when customers traveled overseas.

“Customers planning to travel abroad should opt for international credit cards, which offer high deposit interest rates and high foreign exchange rates,” said Tran Phuong Binh, chairman of DongA Bank.

Despite lenders’ promotional packs for credit cards, the number of credit card users remains low as fees of credit cards in foreign countries is too high, banking experts said.

For using overseas, Visa and Master credit card users have to pay a withdrawal fee of 4-7 percent of the total withdrawal amount and a foreign exchange fee of 3-4 percent. They also have to pay a lending rate of 21-27 percent per annum and an annual fee of VND200,000-300,000.

Some credit card users said that they were fumed about some “unreasonable fees” of their lenders.

ATM account will be locked at once if customers input wrong PIN code for the first time, a credit card user told Dau Tu Tai Chinh Newspaper, adding it cost him VND35,000 to reactive the account.

Prime Minister Nguyen Tan Dung on April 13 instructed the State Bank of Vietnam to cut the cap on the amount of US dollars a resident can carry abroad to US$5,000 from $7,000.

Vietnam needs to reduce US dollar transactions in its economy and restore confidence in the dong as faster inflation deters use of the local currency, ThanhNienNews quoted Ayumi Konishi, the Asian Development Bank’s Vietnam director, as saying.

Dollars make up about 20 percent of money used in Vietnam, Konishi told reporters at a conference in Hanoi Wednesday.

The State Bank of Vietnam early this month announced a new cap on dollar deposit rates in an effort to restore stability in the monetary market.

Starting April 13, the ceiling for interest rates on dollar deposits will be 3 percent, the central bank said. For institutional and corporate clients, the cap will be just 1 percent.

The central bank said banks in Vietnam are offering to pay individual clients an average 4.5 percent a year on dollar deposits, much higher than the rates in regional countries.

The new cap is necessary to bring local and international rates closer to each other and to stabilize the currency market, the bank said, noting that higher dollar rates put upward pressure on dong rates.

Since last month, Vietnam has cracked down hard on illegal dollar hoarding and trading in an effort to stabilize the currency market.

Ha Giang boosts cooperation with Chinese locality

The northern border province of Ha Giang and Baise City in the Guangxi Zhuang Autonomous Region of China will cooperate in border trade and management, helping build a Vietnam-China border line of peace, stability and mutual development.

The agreement was reached during talks between Vice Secretary of the Party Committee and Chairman of the People’s Committee of Ha Giang province Dam Van Bong and visiting Vice Secretary of Baise City’s Party Committee Huang Zhiwei in Ha Giang City on Saturday.

Under the agreement, in 2011, the two sides will focus on cooperation in infrastructure building, especially the upgrading of a road running to marker No. 504 on the Vietnam-China border with the aim of facilitating people’s movement, thus boosting border trading activities and improving the living standards of residents living along the border.

Baise City promised to provide high-yield and high-quality plant varieties, cultivation methods and insect prevention techniques for Ha Giang and cooperate with the Vietnamese province in building models of small- and medium-sized husbandry farms and cattle-feed processing factories as well as in aquaculture.

Ha Giang asked Baise City to encourage China’s businesses to survey and boost investment cooperation in the province. The Ha Giang leader said the provincial People’s Committee will create the best conditions for Chinese businesses to operate effectively in the locality.

For his part, Huang Zhiwei vowed to try his best to help strengthen and boost relations between Baise City and Ha Giang province in many fields.

Fertilizer maker rush to transfer technology for Cambodians

The Fertilizer and Petrochemical Corporation (PVFCCo) under PetroVietnam is boosting the transfer of technology for farmers in at least three Cambodian provinces as part of its overseas expansion scheme.

Deputy General Manager in charge of marketing and building distribution system, Nguyen Hong Vinh, said at a press briefing in Phnom Penh on April 23 that his corporation has placed neighboring Cambodia top priority in its scheme to expand foreign market shares.

The three provinces to benefit from the transfer of technology program this year are Kongpong Cham, Kongpong Thom and Kondan.

The PVFCCo has launched the program of technological transfer right after opening its representative office in Phnom Penh in May, 2010. Numerous workshops have been opened and farmers shown around model fields in Bat Dombong, Kongpong Chnang and Ta Keo provinces.

A farmer from Kon Dan province, named Kieng Kheng, said training in farming know-how and use of assorted fertilizers and insecticides made by PVFCCo have enabled him and many farmers in the region to increase rice yields from 3.5 tons per hectare to between seven and eight tons.

In addition, the Vietnamese company has presented 50 tons of nitrogenous fertilizer for poor farmers in Svay Rieng and Pray Veng provinces and donated $25,000 for families of victims of the deadly stampede last November.

PVFCCo is Vietnam’s leading fertilizer maker which accounts for half of the domestic nitrogenous fertilizer market.

More banks lower US dollar price

Three big banks Saturday continued to decrease the price of the US dollar due to rising supply from exporters and dollar hoarders.

Vietnam Export-Import Bank (Eximbank) decreased the US dollar price by VND20 to VND20,780 a dollar, while the price of the greenback at two other big banks, the HCMC-based branch of Vietcombank and ACB, were VND20,830 VND a dollar and VND20,790 a dollar respectively.

Dollar supply is on a rise since the ceiling dollar interest rate have fallen back to 3 percent, which worn off the attractiveness of holding the greenback.

Due to the recent strong rate reduction on too strong, the bank also lowered the price to buy low-dollar liquidity to prevent risks.

The banks said people still push to sell dollars to banks since the bank's purchase price is around 10-60 per dollar higher than that offered by gold shops.  

The precious metal  were traded at $ 1,507.7 an ounce by the end of the week, but the domestic gold price declined by VND10,000 per tael, sold at VND37.57 million, due to the dollar devaluation against the Vietnam dong.

Gold shops have widen the gap between the bid and ask price up to VND200,000 VND per tael but only saw a few successful transactions.

Breakthrough for VN’s coffee quality

Farm households in the Central Highlands province of Dak Lak are applying wet processing technology for coffee beans – the world’s most modern technology – to ensure premium quality.

Funded by the Vietnam Challenge Fund (VCF), this project is part of the Make Markets Work Better for the Poor Phase 2 (M4P2) project, sponsored by the Asian Development Bank and the UK’s Department of International Development.

Despite being the world’s second largest coffee exporter, Vietnam’s coffee for export is crude and unprocessed and that contributes to a low profit. For this reason, Vietnam’s ability to adjust prices in international coffee markets remains limited.

Besides improving coffee quality, this project also helps raise coffee prices and the local coffee-growing household’s incomes. At present, the whole country has over 550,000 households whose incomes are from coffee growing and about two million people rely on coffee for their livelihood.

Buddhika Samarasinghe, Head of the M4P2 advice group, said that if successful, this model will be expanded to many regions nationwide, resulting in a significant impact on the lives of the poor in rural areas.

Operated since late 2009, VCF provides capital to poverty reduction projects in Vietnam, helping raise poor people’s incomes in rural areas across the country.

Vietnam trade deficit eases in first quarter

Vietnam's trade deficit eased slightly in the first three months of 2011, official estimates showed Friday, in a boost for the government as it battles to stabilise its troubled economy. The deficit is forecast at $3.03 billion in the January-March period, against $3.43 billion for the same quarter last year, the General Statistics Office (GSO) said. Compared with the first quarter of 2010 exports rose 33.7 percent to $19.25 billion, while imports gained 23.8 percent to $22.3 billion, the GSO said.

Last year's trade deficit was estimated at $12.4 billion and the government has set a target that this year's figure should not exceed 18 percent of export revenues.

"Things are on track and I think that we will be able to meet this target," Deputy Minister of Industry and Trade Nguyen Thanh Bien told Dow Jones Newswires. The data come after Hanoi in February devalued its dong currency 9.3 percent in a bid to narrow the trade gap, while it has also increased interest rates to tame inflation, which is estimated to a two year high 13.9 percent this month.

Hanoi has described bringing prices under control as its number one priority.

However, the fall in the trade deficit is "very small" and the impact of the devaluation the largest in years is not expected to be felt until later months, said Deepak Mishra, lead economist at the World Bank in Hanoi.

The devaluation was the first strong action by the government after months of growing investor concern over rising inflation, a struggling currency, and a trade deficit that accompanied the country's high growth rate.

International capital markets have welcomed Vietnam's moves as "a good start" while the cost of borrowing has dropped in recent weeks, bringing it back in line with the emerging market average, Mishra said. But economists say much will depend on how the government implements its stabilisation package, and whether those efforts are sustained.

Annual growth reached 6.8 percent in 2010 and the Politburo is now downplaying the need to top that figure this year. Analysts say the government is looking to balance its traditional quest for growth with stabilisation.