Cell phone sector enjoys $1.43 bln trade surplus

 Vietnam’s mobile phone exports enjoy a US$1.43 billion trade surplus for the first seven months of this year, according to the General Customs Department.

Exports of mobile phones and spare parts earned $2.59 billion, three times higher over the same period last year, while imports stand at $1.16 billion, data from the customs department shows.

The EU became the country’s largest market, accounting for 40.6 percent of the total export turnover.

This market imported $1.05 billion worth of mobile phones in the past seven months, while the figure recorded last year was only $54 million.

Russia and India are the next top importers, who bought from Vietnam $221 million and $191 million worth of products, respectively.

Meanwhile, Vietnam’s imports saw $195 million turnover in July alone, a 32 percent increase month-on-month. The total import turnover in the seven months was $1.16 billion, 57 percent higher compared with the same period last year.

China accounted for 63 percent of total imports with a turnover of $733 million, while Korea followed with 33 percent, or $382 million.

Shipping firms put vessels on sale to cut losses

With businesses negatively affected by the economic turbulence caused by high lending rates and soaring costs, many companies in the domestic shipping industry have to sell their vessels to cut losses.

According to Sai Gon Tiep Thi newspaper, most of the businesses in the shipping sector are operating with negative profits.

The Vietnam National Shipping Lines, for instance, last month posted the H1 loss of VND660 billion (US$33 million), the first loss ever in 16 years of operation of this state-run company.

The Transport and Chartering Corporation also incurred a VND28 billion negative profit in the second quarter of this year, while the South Vietnam Container Shipping JSC (VSG) this year targeted a … loss of VND31.5 billion after suffering a bigger loss of VND40.6 billion in 2010.

VSG posted a VND20.1 billion loss in the first half of this year.

Analysts attributed the shipping sector’s losses to skyrocketing interest rates and fluctuating fuel prices.

There were not many goods to carry due to the economic downturn, while freight fees also dropped, they said.

Moreover, most of the vessels of the shipping industry are old and degraded and have low loading capacity, which make the domestic companies less competitive than their foreign counterparts.

Despite gaining negative profits, many businesses have managed to avoid losses by putting their vessels on sale.

For instance, Vietnam Ocean Shipping JSC sold its Vinh Long vessel, earning a VND21.3 billion profit, which contributed to its after-tax profits of VND805 million in the second quarter of this year.

Similarly, the Transport and Chartering Corporation covered its negative profits of VND28 billion in Q2 with the money earned from ship selling.

For its part, Marina Hanoi also decided to sell all of its ships for debt clearance and switched to earning profits mainly from its Hai An Port and Hai An Office Building in the northern province of Hai Phong.

Collective farming program to expand

With encouraging results from a pilot project in the Mekong Delta during the past five months, an innovative program on collective rice growing is scheduled to expand its implementation in the coming paddy crops.

At the meeting held yesterday in An Giang Province, the Ministry of Agriculture and Rural Development said the “large-scale rice field” program was a success as it helped increase farmers’ profits by a margin of between VND3 million and VND7 million per hectare of field.

Initiated in March, “large-scale rice field” attracted 6,400 farming households to grow their summer-autumn crops on a total area of 7,803 hectares across 13 provinces in the southern region.

Under the program, a rice exporter will organize a large-scale field by bringing together the farming households whose fields are located near one another.

The participants [farmers] will grow rice on the same day and tend to their fields with production techniques provided by the companies, which also supply seeds, fertilizers and other inputs in advance to farmers without any interest rates.

The companies are committed to buying all the harvested products, Viet Nam News reported
This will help the rice exporters have a sustainable supply for their business.

The program was first implemented by the An Giang Plant Protection Company, which organized the 1,000-hectare Vinh Binh Rice Farm in Chau Thanh District's Vinh Binh Commune with the participation of 458 farming households.

In the last winter-spring rice crop, the production cost of one kg of paddy in the Vinh Binh Farm was 30 percent lower than that of individual, small-scale farms, resulting in a 150 percent increase in farmers’ profits, Viet Nam News quoted the company as saying.

The Ministry of Agriculture and Rural Development said the program proved to be effective in connecting farmers, boosting production and ensuring product outlets.

The southern provinces are scheduled to expand the area of the “large-scale rice field” for the winter-spring crop in 2011-2012 to 20,000 hectares, and 100,000-200,000 hectares in 2013, the ministry informed.

However, experts said many problems still need to be solved for this target to be achieved.

Professor Nguyen Tho, an agriculture expert, emphasized that the organization of program must be transparent to ensure benefits for both businesses and farmers.

Doctor Pham Van Du, deputy head of the Department of Cultivation, said the companies played a crucial role in the implementation of the large-scale field.

“Farmers could do nothing if the businesses refuse to join in the program,” he said.

“Moreover, many farmers still do not clearly understand the production techniques as required by the scheme, which may also hinder the program implementation.”

Power, fuel prices top ministry concerns

Monitoring of fuel and power prices will be the key aspects of the Ministry of Finance’s price management policies for the rest of this year that it announced yesterday.

Minister of Finance Vuong Dinh Hue urged relevant agencies to be more aggressive in regulating prices to curb inflation and stabilize the economy.

He tasked Deputy Minister of Finance Tran Van Hieu with organizing inspection teams to monitor prices in major cities like Hanoi, Ho Chi Minh City, Da Nang, and Can Tho.

He ordered the ministry Inspection Office to also keep an eye on power and fuel prices next year, and urged the Price Management Bureau to finalize measures to regulate their prices.

He called on the Corporate Finance Department to report on the financial status of the Vietnam National Petroleum Corporation (Petrolimex), the country’s largest fuel wholesaler, and the fuel price stabilization fund.

Leading US retailer to enter Vietnamese market

Gap Inc, a leading retailing company in the US, announced on August 23 that it will launch a chain of shops selling apparel with Gap and Banana Republic brands in Vietnam.

Gap Inc said that it planned to open the first Gap shop in October this year, and the Banana Republic in late 2012 in Ho Chi Minh City.

Some other Gap shops will also appear in Hanoi soon.

Vietnam’s fast-growing economy has opened up a good opportunity for Vietnamese consumers to gain access to Gap and Banana Republic products, said Gap Inc.’s Managing Director Stefan Laban.

Laban added that opening shops in Vietnam will be an important step in expanding his company’s operations to international markets.

The San Francisco-based company has more than 3,000 shops in over 90 countries and territories.

Prospects for signing Vietnam - Chile Free Trade Agreement

Vietnam and Chile concluded negotiations for a Free Trade Agreement (FTA) which they plan to sign on the sidelines of the 19th annual Asia-Pacific Economic Cooperation (APEC) leaders’ meeting to be held in Honolulu, Hawaii on November 2011.

This announcement was made by the Vietnamese ambassador to Chile, Ha Thi Ngoc Ha, at a recent ceremony to celebrate the 66th anniversary of Vietnam’s National Day.

At the meeting, Ms Ha highlighted Vietnam’s achievements in the Doi Moi (Renewal) process and its efforts to become a modern industrialized nation. She affirmed that Vietnam has taken measures to stabilize the macro-economy and curb inflation while escalating prices have seriously affected international financial markets.

Currently, Vietnam and Chile are negotiating the Trans-Pacific Partnership (TPP) Agreement along with seven other partners, which will liberalize trade and create a strategic alliance in the Asia-Pacific region.

Earlier, at a reception for Ms Ha, Chilean President Sebastian Pinera said that the diplomatic ties between Vietnam and Chile over the past 40 years will lay a firm foundation for both nations to further develop trade and economic ties.

Ms Ha said she hopes the FTA will open up new business and cooperation opportunities, adding that she will continue to work towards developing multi-faceted cooperation between the two countries.

Work accelerates Tan Thanh sewage treatment complex

Officials of the Long An southern province and Ho Chi Minh City on August 23 surveyed the implementation of Tan Thanh industrial sewage treatment complex project.

Invested by the Vietnam Waste Solutions company, the $700 million complex in Thu Thua, Long An province will be equipped with the latest technologies from the US to treat solid waste collected from Ho Chi Minh City and Long An.

Once finished, it will become a large-scale complex in the Southeast Asian region.

Nguyen Van Phuoc, deputy director of Ho Chi Minh City’s Department of Natural Resources and Environment said that once operational by the end of 2012 or early 2013, the complex can process 10,000 to 15,000 tonnes of household solid and industrial solid waste per day, and up to 30,000 tonnes at peak time.

Darryl Petker, director of the Tan Thanh project said that the complex would include solid and industrial waste recycling areas, a compost fertiliser production area and a wastewater treatment area.

New tax on land, property transfers

People who transfer land use rights and ownership of houses and apartments will be subject to a tax of 25 per cent on their income from the transactions, said the Ministry of Finance.

The new tax rate was stipulated in Circular 113/2011/TT-BTC, recently issued by the Ministry of Finance. The circular also outlines ways to calculate personal income tax including income tax on real estate transactions.

Under the new circular, organisations and individuals paying commissions, salaries, wages and other service charges valued at more than 1 million VND per transaction will have the tax deducted before paying their general income tax. Deductions are applied at a rate of 10 per cent for individuals who have tax file numbers and 20 per cent for those without tax file numbers.

Purchasing contracts for houses or apartments signed before Decree 71/2010/ND-CP on the implementation of the Law on Housing came into effect on 23 June, 2010, have to pay 25 per cent of their personal income tax.

For the transfer of purchasing contracts on housing to be built in the future, people making tax declarations will be subject to a tax of 25 per cent on their income.

HCMC enjoys surplus, capital faces deficit

The country's two largest cities recently posted opposing sets of results related to trade turnover achieved during the first eight months of this year.

While Ho Chi Minh City announced a trade surplus of $1.53 billion, the capital city reported a trade deficit of nearly $10 billion.

Ho Chi Minh City 's Statistics Office said that in August alone, the city's export value reached an estimated $2.5 billion, a month-on-month decline of 20.8 per cent.

Export value of state-owned firms decreased by 25.3 per cent while export turnover derived from foreign-invested firms saw a growth of 0.9 per cent.

August figures revealed the total export value of the city having hit nearly $18.3 billion, a rise of 20.5 per cent over the same period last year.

Import value during the same period managed over $16.7 billion, a year-on-year increase of 24.5 per cent.

The Hanoi statistic office reported the city's total import value in the January - August period declined by 18.1 per cent over the same period last year to nearly $16.4 billion.

While exports managed to increase by 27.2 per cent, it was unable to help the city cut down its trade deficit as total export value reaching only $6.4 billion.

In August alone, Hanoi earned $982.5 million from exports while spending nearly $2 billion on imports.

Nation's trade deficit roars back in August
 
The General Statistics Office has estimated that the country had a trade deficit of US$800 million in August after gaining a trade surplus last month for the first time since 2009.

According to the office's preliminary statistics, export turnover in August decreased 10.9 per cent over the previous month to $8.3 billion. In contrast, imports rose 10.7 per cent to $9.1 billion.

The office attributed the deficit to a sharp drop in the export of precious metals and gemstones in August. Export turnover of the products, which mainly contributed to help the country enjoy a trade surplus of $1.1 billion last month, decreased sharply by 82 per cent to $200 million in August.

Besides the decline in export of precious metals and gems, the GSO said that an export reduction in the country's several key export items also caused the trade deficit.

Textiles and garments were the only export product that earned a turnover of more than $1 billion in August. Other key export staples including crude oil and seafood contributed only $750 million and $590 million, respectively.

The main import commodities in August were petrol, worth $967 million, cloth at $540 million and electronic products and computers valued at $600 million.

With August's deficit, the GSO estimated the country had a trade deficit of $6.22 billion in the first eighth months of the year, equal to 10.23 per cent of the country's total export turnover. The country bagged an export earning of $60.8 billion, up 33.7 per cent over the same period last year, while spending $67.02 billion on imports, a 25.4 per cent surge over the same period last year.

The GSO noted that State-owned enterprises during the first eight months made up nearly a half to the country's total export turnover with $28.1 billion, up 32.6 per cent over the same period last year. The businesses meanwhile spent $36.9 billion on imports.

Vietnam’s online advertising revenue remains modest

The Vietnam Advertising Association (VAA) has said advertising revenue from the internet-based sources still makes up a small fraction in Vietnam’s advertising industry although online trade has recorded remarkable growth in recent years.

VAA vice president Do Kim Dung said online advertising revenue was put at only VND480 billion (around US$23 million) last year and this amount was poorly compared to some VND20 trillion (about US$960 million) for the whole industry.

The advertising sector is expected to achieve a year-on-year revenue rise of some 15% this year but the online advertising segment would likely grow 20%, Dung told the Daily on the phone on Monday after Nielsen released findings of its latest survey on the influence of online advertisements on consumers in Southeast Asia (SEA).

The global information and measurement firm’s survey found that consumers in the region were highly impacted by online advertising, particularly if the content was specifically targeted or if their friends had also engaged with the product or brand.

According to the survey, up to 95% of consumers in Vietnam are ‘highly’ or ‘somewhat’ influenced by standard website advertisements on social media sites, the highest among nations in the region and much higher than the average regional percentage of 73%.

David Webb of Nielsen commented in the survey report that SEA consumers’ trust in and attitudes towards online advertisements provided opportunities for companies to engage with their target audience.

“As social media increasingly becomes a mainstream activity throughout the region, brands have been quick to ‘get on board’ with the practice of better understanding and connecting with their consumers when it comes to their advertising strategies, engagement and conversion,” Webb said.

The Nielsen study showed that 79% of Vietnamese consumers have ever ‘liked’ or followed a brand or company on social networking sites, and this percentage is significantly higher than the global average of 52% and 69% in the SEA.
 
Ministry orders drastic price management

Finance Minister Vuong Dinh Hue on Monday asked relevant agencies to apply flexible and reasonable solutions over management of sensitive products in Vietnam to secure the Government’s targets on curbing inflation and ensuring social security.

The minister in his official statement released on Monday stressed the need to check and disclose price forming factors of State monopoly and sensitive products such as electricity, oil and gas, steel, seaport services, food and foodstuff, medicine, tuition and milk, Vietnam News Agency reports.

Hue also stressed that price management must make a positive contribution to solving difficulties of business, production, speed up development and integration.

If management fails to meet market demands, related agencies must seek solutions to ensure all product prices run following market principles and the State management.

The nation is forecast to meet many challenges from now to the end of this year with inflation standing at 14.6% as of July. The minister asked finance departments and local authorities to expand the measures effectively given the Government’s Resolution No. 11 on curbing inflation, stabilizing the macro economy and ensuring social security.

The Market Price Management Department is required to learn about experience on price control and management in other countries, especially neighboring nations of Laos, Cambodia and China to provide consultancy to the ministry. The unit must also improve its manpower to follow close behind businesses, grasp information and focus on policy building and price control.

The ministry asked the department to follow its working schedule, noticing inspection into implementation of the State’s price management regulations. The department has to give instructions to local authorities, use all current management methods and closely coordinate with related forces.

* Consumer prices have continued to surge in the country’s two biggest cities, Hanoi and HCMC, this month.

HCMC’s consumer price index (CPI) in August is up 0.68% month-on-month as most groups of goods have dropped in price, said the HCMC Statistics Office on Monday.

Prices of nine of eleven groups of goods have gone up around 1% from July while prices in the transport group have remained unchanged but telecommunications are down 0.15%

The city’s CPI in the January-August period is up 13.49% from 2010 and 18.98% from the same period last year.

Hanoi’s Statistics Office said the CPI in the capital this month had increased 1.06 % month-on-month and 15.65% against late 2010. Foods and catering services have had the highest rise in prices, by 1.89% month-on-month.
 
Jan-Jul exports to Africa hit record high

Vietnam’s exports to African markets in the first seven months rose to a record high of US$2.1 billion, up 209% from the same period last year, according to Vietnam Customs.

Customs recorded high exports of US$1.5 billion, US$154 million and US$124 million to South Africa, Senegal and Egypt respectively.

The export of gems and precious metals, most of them to South Africa, was the main reason for the high figure. In particular, such exports to South Africa rose 29-fold to US$1.34 billion, accounting for 90% of the total to this country in January-July.

However, rice was still Vietnam’s major export with US$143 million earned from Senegal and US$86 million from Ivory Coast.

Ly Quoc Hung, general director for the Southwest Asia and Africa Markets Department, told the Daily that exports to African countries recovered and rose strongly in the second quarter, especially Ivory Coast with US$32 million per month despite stagnation in January-March.

The political situations in Ivory Coast and Northern African countries were getting better, leading to a higher demand of basic products. This is a chance for Vietnam to further penetrate these markets, Hung added.

Hung said Vietnam’s total export turnover to Africa this year could rise by 70%, reaching US$3 billion, compared to US$1.78 billion last year.

Nguyen Dinh Phi, sales manager of Minh Phu Seafood Group Joint Stock Co., said the company had restored shrimp exports to Egypt after the stagnation in February. However, the demand of Egypt was not high due to an increase of 20% in prices from earlier this year.

The Ministry of Industry and Trade is planning to make three market research and trade promotion trips to Cameroon and Central African Republic in late August, to Senegal and Sierra Leone in early October and to Nigeria in November.

To target total exports of US$6-7 billion, a Vietnam-Africa action plan for the period of 2011-2013 is being drafted.

Most shoppers ignore ‘tired, old' promotions

‘Promotions' have become increasingly irrelevant to a modernising and dynamic shopping environment, according to a G2/Grey Group 2011 Eye on Asia Retail study.
Accordingly, 62 per cent of Asian shoppers rarely base their decisions on promotions while 40 per cent of the remaining 38 per cent shop entirely based on their own whims.

"Traditional in-store promotion strategies aimed at maximising acquisitions are failing due to the fact that they only draw in existing customers instead of new ones," the study revealed.

"It's become time to re-think promotion strategies, design and execution", said Sumit Pillai, strategic planning director at G2/Grey Group Viet Nam.

It was important to identify ‘shopper-types' predominant in certain categories as ‘shopping mindsets' determine response, he said, adding that promotions had lower impacts on ‘loyalty seekers' as opposed to ‘value-seekers'.

Furthermore, promotion mechanics needed tailoring to suit specific mindsets. Lower valued but immediate redemption offers were more likely to work with value seekers instead of a ‘chance to win millions' while the opposite worked with ‘whim indulgers' who usually shop out of impulse rather than need.

"There is a lot more to promotions than just ‘discounts' and ‘gifts'," he said.

New rules on environmental impact reports

The Ministry of Natural Resource and Environment issued Circular No 26/2011/TT-BTNMT on July 18 to provide guiding regulations pursuant to Government Decree No 29/2011/ND-CP of April 18, 2011, on environmental impact assessments and environmental protection commitments.

Circular No 26 provides procedures and forms for submitting environmental assessment and impact reports and procedures for drafting and registering an environmental protection commitment. It also guides the establishment and operation of an appraisal board for the environmental impact assessment report.

The circular also addresses issues pertaining to the examination and confirmation of proposed works, measures to protect the environment prior to the commencement of the project, and the responsibilities of investors and competent authorities.

The circular takes effect on September 2 and replaces Circular No 05/2008/TT-BTNMT of December 2008 and Circular No 13/2009/TT-BTNMT of August 2009.

Viet Nam Finance 2011 to be held in September

The 2011 Viet Nam Finance Conference and Exhibition themed "Restructure national finance: policy challenges, and linking and integrating tendency" would be kicked off in Ha Noi on September 28, organisers said at a press conference today.

The eighth Viet Nam Finance, previously named Viet Nam ICT in Finance, will be co-organised by the Ministry of Finance and the International Data Group (IDG Viet Nam).

The three-day event would include a conference in which leaders, State agencies and experts would discuss opportunities, challenges and lessons of post-crisis financial restructure and Viet Nam's vision and policies, as well as the strategic orientation in modernisation of State budget collection management, said Pham Doan Quan, deputy chief of the Finance Ministry Secretariat.

Along with the conference, the exhibition space will be reserved to showcase and introduce an overall IT system development strategy in the finance sector. Local enterprises and IT providers will have rooms to display their products and IT application solutions.

The event would be of particular significance to the Ministry of Finance, which was focusing on IT development and deployment to create effective cost-saving services in e-finance in its financial strategy for the 2011-20 period, Quan said.

IDG ASEAN general director Le Thanh Tam said that since 2004, Viet Nam ICT in Finance had proved to be an effective marketing channel in IT development for the finance sector.

Widespread IT application in finance had helped the sector to receive multi-dimensional feedback to meet the key demands of national industrialisation and modernisation, he said.

The seventh CIO Summit & Awards will also be jointly held on September 28 by IDG Viet Nam, the National Steering Committee on Information and Technology, Ministry of Information and Communications, the Ministry of Internal Affairs and the Viet Nam Chamber of Commerce and Industry, to honour outstanding chief information officers in Viet Nam and other ASEAN nations.

Ha Noi authorities punish 75,000 cases of trade fraud

Ha Noi had punished nearly 75,000 cases of fraudulent trading over the past ten years, according to statistics released by city authorities at a conference on Tuesday.

City inspectors uncovered more than 16,000 cases of banned goods, nearly 10,000 cases of fake and substandard goods, more than 30,000 cases of tax evasion and more than 18,000 cases of other violations.
The inspectors issued administrative fines worth VND5 trillion (US$244 million) and collected VND3.5 trillion ($170.7 million) in backdated taxes.

In the next stage, the city's steering committee on anti-trafficking, counterfeit goods and trade fraud will closely manage essential goods such as food, petrol and oil, fertiliser and medicines to stabilise prices and prevent inflation.

Low productivity holds back local companies

A lack of ownership capital, low productivity and bad loan management have been blamed for Vietnamese businesses' poor performance, according to a new credit index report.

The 2011 report was compiled by the Credit Rating of Vietnam Joint Stock Company (CRV) in co-operation with the Presidential Office and the Viet Nam Chamber of Commerce and Industry (VCCI).

Inflation, high interest rates and forex fluctuation had an adverse impact on enterprises' operations in the past months, the report said.

In particular, a lot of textile and garment companies suffered huge losses between 2002-09, though the industry had traditionally played a key role in Vietnamese exports. In 2009, the average profit of big companies fell to VND13.3 billion (US$640,000) from VND15.5 billion ($745,000) in 2000.

The footwear industry also showed low productivity, which made it less competitive with other sectors, the report said.

It stated that most Vietnamese enterprises were small- or medium-sized with capital of under VND50 billion ($2.4 million). Companies that borrowed a lot of capital in comparison with their reserves have operated less efficiently than the rest.

The report also includes a list of 596 Vietnamese businesses and 20 huge commercial banks, which have been rated following nine levels from AAA through C, based on 54 financial criteria.

It also analysed the capabilities of Vietnamese exporters and 100 large corporations, as well as their advanced technology index.

Furthermore, it also assessed the nation's economic situation in 2010, while forecasting possible risks that could threaten sustainable development in 2011.

Doan Duy Khuong, deputy chairman of the VCCI, said the report would help enterprises recognise their positions and suggest them how to enhance their competitiveness.

Labour rules challenge small firms

Most Vietnamese enterprises are small- and medium-sized and do not have sufficient capacity to comply with the strict requirements of corporate social responsibility, according to Patrick J Gilabert, country representative of the UN's Industrial Development Organisation (UNIDO).

Speaking at a forum on labour relations yesterday in HCM City, Gilabert said that small- and medium-sized enterprises needed help in meeting such requirements.

Since last year, UNIDO and the Viet Nam Chamber of Commerce and Industry (VCCI) have been working with SMEs on a project to improve their environmental and social performance.

The project also helps SMEs enhance their sustainable integration in global supply chains through increased awareness of corporate social responsibility, including environmentally sound production and improvement of labour practices.

The forum was held as a dialogue between employers, workers and other stakeholders, including trade unions and buyers.

The forum gathered labour experts from the Ministry of Labour, Invalids and Social Affairs, the International Labour Organisation (ILO) and other local and international organisations and enterprises in the textile and garment and footwear industries.

Vu Huu Tuyen, deputy director of a USAID-funded project on industrial relations in Viet Nam, said that critical industrial relations issues included minimum wage, strikes and dispute prevention, overtime payment, migration, female employment and cross-cultural management.

Global integration had had a strong impact on textile and garment and footwear enterprises. Many countries had strict regulations regarding policies for workers, labour relations and the working environment, Tuyen said.

Inflation eases on slowed demand
 
Lower market demand coupled with increased production of essential commodities has caused a drop in prices on food and foodstuff.

The price reduction contributed to a lower consumer price index (CPI) in August, which hit only 0.68 per cent, according to a report in Tuoi Tre (The youth) newspaper.

The city statistics office said the CPI in August continuously increased, less than 0.39 per cent month-on-month.

The most weighted factor in the CPI, food and foodstuff, rose by only 0.17 per cent, the lowest increase within a year.

Pork prices, which had risen greatly, have fallen by 1.52 per cent.

Van Duc Muoi, general director of Vissan Limited Co, said the pork supply had gradually stabilised since early July, following a fluctuation caused by high interest rates on bank loans and disease that affected pigs.

Huong, a butcher in District 1's Tan Dinh market, said pork prices had dropped twice since the beginning of August.

The latest drop was on August 10, with the average price down VND3,000-VND4,000 per kilogramme.

Huong said pork demand always fell significantly in every seventh month of the lunar calendar, which is the month for vegetarians.

Thuong, a butcher at Go Vap District's Go Vap market, estimated the demand had downed by 30 per cent. The shop sold 30kg per day, down 15-20kg month-on-month.

Tran Dinh Khai, a representative of San Ha Company Limited specialising in providing poultry, meat and egg products, said the price of poultry fell by 1.35 per cent month-on-month.

Supply had even exceeded demand, he added.

In order to sell all of the poultry meat, the company has asked retailers to cut the price by VND7,000 per kg.

"We have supplied Co.op Mart chain with six tonnes of chicken for the chain to sell it at VND45,000 per kg, much lower than the price under the city's price stabilisation programme," Khai said.

This month has seen a slight increase in the price of fresh aquatic products, vegetables, eggs and beef.

However, if product circulation between wholesale and retail markets improves and the differential tariff is narrowed, the price of vegetables will fall, according to Nguyen Thanh Ha, deputy director of Tam Binh Wholesale Market in Thu Duc District.

xVissan had worked with pig farms by giving them money in advance so they could supply the ordered amount of pigs at a stable price, Muoi said.

The company planned to store 4,000 tonnes of pork per month, up 1,000 tonnes compared with the assigned norm.

San Ha Company has also presented its storage plan for Tet (Lunar New Year) to the city People's Committee.

It expects to supply 180 tonnes of poultry meat per day during the month of Tet.

"We had agreements with major farms to have a stable source. The poultry price is expected to be stable for the rest of this year," Khai said.

In order to have a stable source of vegetables for the city, the Department of Industry and Trade has encouraged companies to work with co-operatives and companies in neighbouring provinces to develop vegetable plants that could be harvested in a short time and have a high yield.

The prices of ordinary rice and sticky rice have shown an upward tendency because of the information about the increasing price of export rice and Thailand's rice price adjustment.

The department has asked companies to co-operate with the Food Company of HCM City to balance rice supply and demand, and develop a storage plan to cope with market fluctuations.

Le Van Khoa, deputy of the department, said demand would rise when the National Day holiday period begins next month.

"Promotions based on discounted offers of companies will help keep prices stable," he said.

PV