Morocco trade targeted at $100m

 

Viet Nam and Morocco agreed to raise bilateral trade to US$100 million by 2012 during a two-day meeting of the Viet Nam-Morocco Joint Committee and the third political consultation between the two foreign ministries which ended yesterday in Ha Noi.

 

Both sides stressed the need to increase the exchange of delegations at all levels and to work closely together and provide mutual support at regional and international forums. They also highlighted the importance of promoting co-operation in economics, education, culture, tourism and transport.

 

In addition, the two parties agreed on the early inking of agreements on investment encouragement and protection, and tourism co-operation which would create a legal basis for long-term co-operation between Viet Nam and Morocco.

 

Deputy Foreign Minister Doan Xuan Hung, Head of the Vietnamese subcommittee, said the Government and people of Viet Nam treasured their traditional friendship and multifaceted co-operation in political, economic, trade and education areas with African countries, including Morocco.

 

To maintain the mechanism for co-operation with African countries, the Government of Viet Nam had held the second Viet Nam-Africa international workshop in August 2010, Hung said.

 

That move reflected the political will and resolve of the Vietnamese leaders and people in promoting co-operation with Africa, including Morocco, he said.

 

Hung added that Viet Nam placed a high value on Morocco's positive role in regional integration initiatives, before stressing that in its role as one of founding members of the World Trade Organisation (WTO), Morocco would continue to support, help and protect developing countries.

 

Moroccan Secretary of State for Foreign Affairs and Cooperation Latifa Akharbach congratulated Viet Nam on its successful organisation of the 11th National Party Congress and the election of 13th National Assembly.

 

She praised Viet Nam's socio-economic achievements and expressed her wish for deeper friendship and increased multifaceted co-operation with the Southeast Asian nation.

 

The two head delegates also discussed regional and international issues of common concern and signed the minutes of the second Viet Nam-Morocco Joint Committee meeting.

 

HCM City seeks funds to dredge river

 

At least VND9 trillion (US$435 million) is needed to continue the Soai Rap River dredging project so that larger vessels can enter Nha Beø District's Hiep Phuoc Port Complex, according to HCM City officials.

 

The issue was discussed last week between the city's leading officials and Truong Tan Sang, Politburo member and standing member of the Secretariat of the Party Central Committee.

 

Sang told the city government to conduct a survey and use the land fund for capital to dredge the river and speed up Hiep Phuoc Port construction, which was in the second phase.

 

Only two months ago, the city had to allow the Soai Rap River Dredging project to go up for bid again because of the volatile exchange rate between the Vietnamese dong and US dollar.

 

The project was originally planned with an investment of around VND1.5 trillion, which would be raised from other sources than the State budget. The first of the three phases of the dredging project began in April 2009.

 

The first phase, to last until 2010, would allow 30,000-50,000-DWT (dry weight) ships to pass through.

 

The second phase in 2012-13 would see 50,000-70,000 tonne ships come up to the Hiep Phuoc Port Complex, and after 2015 the river would be dredged to a depth of 12 metres, allowing 70,000-tonne vessels.

 

Le Cong Minh, general director of Sai Gon Port Company, said the first phase of the construction of Sai Gon - Hiep Phuoc Port had been completed. It would be put into use in the fourth quarter of the year.

 

However, the access road to the port had not been built because the second phase of construction had faced a shortfall of capital, Minh added.

 

Market slump cuts into share liquidity, restructuring plans

 

The poorly stable economy and decline in the stock market have negatively affected share listing plans of some businesses under the restructuring programme of Debt and Asset Trading Co and made its capital divestment more difficult.

 

Debt and Asset Trading Co (DATC), established in 2003 under the management of the Ministry of Finance, has to deal with outstanding debts and assets of State-owned enterprises, helping accelerate the process of their equitisation.

 

"The enterprises DATC managed and helped restructure were mainly small- and medium-sized, listed or eligible for listing on the Ha Noi Stock Exchange. The prolonged market decline decreased their share liquidity though the value of the enterprises were still good," said DATC deputy general director Pham Manh Thuong.

 

Thuong said divestment plans of his company in some enterprises, including cement packaging Can Tho Sadico Corp (SDG), KonTum Sugar Co (KTS) and seafood processing Procimex Viet Nam Co were hard to achieve.

 

In addition, he said DATC had prepared listing roadmaps for some companies under its restructuring programme but due to long downturns on the stock market listing plans of some units such as Son La Sugar Co and Procimex Viet Nam Co would likely be postponed.

 

DATC has purchased and dealt with bad debts worth more than VND7 trillion (US$341.5 million) over seven years of operation and helped restructure successfully more than 40 State-owned enterprises which had incurred losses and been unable to repay debts.

 

The successfully restructured businesses returned to profitability with many having the return on equity ratio of 30-40 per cent. Shares of some companies were listed on the stock exchange.

 

Thuong also said one of the biggest difficulties of enterprises carrying out restructuring process was capital mobilisation.

 

He said such enterprises could not access bank financing and State capital support as under the current regulations, indebted enterprises whose overdue debts were sold to DATC though they had been restructured successfully, and were not subject to bank loans and beneficiaries of the Government's capital support programmes.

 

Thuong proposed there should be a mechanism for banks and DATC to work together to help enterprises participating in DATC's restructuring programme access capital.

 

Garment exports surpass $5 billion in first five months

 

Total apparel export turnover was estimated to increase by 35.6 per cent year-on-year and reach US$5.1 billion in the first five months of the year, according to the Viet Nam Textile and Garment Association.

 

Dang Phuong Dung, general secretary of the association said that the US, Europe and Japan markets were the strongest consumers. However, revenues were down due to soaring material prices and labour costs.

 

The challenges facing the country's apparel industry were Turkey's "self-defence" tariffs on textile and garment products imported from Viet Nam, and Malaysia's "self-defence" tariffs on fabric products, Dung said.

 

In the first four months, Viet Nam's apparel exports reached $3.8 billion, rising over 30 per cent against the same period last year, with an increase of 17-18 per cent in volume and 12-13 per cent in price.

 

"With 17-18 per cent output growth, Viet Nam's garment and textile sector maintains its competitive position on the world market and retains its market share," said Le Tien Truong, standing deputy general director of the Viet Nam National Garment and Textile Group (Vinatex).

 

Last year, Viet Nam's apparel exports fetched $11.2 billion.

 

While the country's garment exports surged, there were also positive signs in the domestic market, with the expansion of major producers such as Viet Tien and Nha Be, Dung said.

 

The price of imported cotton had a significant impact on domestic production, as Viet Nam did not produce enough raw materials.

 

Prices went up to US$5-5.2 per kilo, an increase of 80-90 per cent compared to the same period last year, Truong said. This caused businesses to shift their focus towards exports to balance foreign currencies so they were able to import raw materials.

 

However, they faced another obstacle in the form of additional port fees. "If there is an imbalance between exported and imported items in the containers, shipping agents will charge for the difference. This is a very unreasonable fee," stated Le Van Han, Viet Nam Textile and Apparel Association deputy secretary.

 

He explained that Vietnamese firms used to buy in CIF (Cost, Insurance and Freight) prices and sell in FOB (Free on Board) prices, so they had to depend on the provisions set by carriers.

 

In addition, economic experts from the Central Institute of Economic Management, as reported by the Thoi bao Ngan hang (The Banking Times), said that there was a shortage of skilled labourers in the textile industry. New production technology required high-skilled employees so cheap labour was no longer an option.

 

The industry is also facing other difficulties such as complicated administrative procedures and power shortages.

 

Thoi bao Ngan hang also reported that 74 per cent of businesses had to use at least three people and 163 days to complete procedures related to tax and customs.

 

"Prolonged power cuts, especially in the summer, force businesses to use generators to serve 30 per cent of production, which is very costly," Han noted.

 

Coffee growers need to replant

 

The Tay Nguyen (Central Highlands) region needs to replant 100,000ha of coffee in the 2011-15 period, or about 20 per cent of the region's total coffee area, according to the Tay Nguyen Agriculture and Forestry Science Institute.

 

Most of the 100,000ha of coffee are 17-25 years old and have an annual average yield of 1.2 tonnes per ha, or only 50 per cent of the country's average yield.

 

Le Ngoc Bau, head of the institute, said the average cost to replant one hectare of coffee was VND100-120 million (US$4,700-5,700).

 

The replanting was a small issue to large companies, but it was a big issue to farmers as more than 91 per cent of farmers lack capital, Bau told Vietnam Economic Times.

 

The work needed the support of replanting costs from the Government and especially from coffee processing and exporting companies in the first two years of replanting because the income of most farmers relied on coffee harvests, he said.

 

If farmers were not given financial support for replanting, they might switch to growing other short-term crops such as corn and cassava because it would take three years for new coffee trees to bear fruit, he said.

 

To solve difficulties for farmers, professor Nguyen Lan Hung, director of Experimental Biology Centre under the Ha Noi National University of Education and General Secretary of Viet Nam Association of Biological Branches, has proposed two solutions.

 

First, for coffee orchards that can be harvested and kept for a few years, farmers should intercrop other trees like macadamia and avocado in the coffee orchards.

 

When macadamia and avocado trees begin to have fruit after three years, farmers can cut down old coffee trees and replant new coffee trees.

 

Second, for coffee orchards that are too old and badly damaged by disease, farmers need to cut down coffee trees and grow short-term crops for at least two years.

 

Cotton trees were the most suitable for growing in these coffee orchards because they took only four months for a harvest and offer high income for farmers while they waited to replant new coffee trees, Hung said.

 

Pham Van An, director of the Lam Dong Province Department of Agriculture and Rural Development, said his province had 40,000ha of old and low-yield coffee.

 

The province also had 15,000ha of coffee aged below 20 years, but they showed signs of being old and low yield.

 

The areas are needed to be switched to other crops or replanted with new high-yield coffee trees, An said.

 

Under the province's plan, Lam Dong will keep its coffee area at 135,000ha by 2020, a reduction of nearly 8,000ha compared to the present.

 

The province will also focus on replacing new high-yield coffee strains.

 

The Viet Nam National Coffee Corporation (Vinacafe), which grows coffee in Dak Lak, Dak Nong, Gia Lai, Kon Tum and Quang Tri provinces, plans to replant 20,000ha of its coffee trees.

 

Vinacafe is estimated to invest about VND950 billion ($45.2 million) by 2012 to implement measures for the sustainable development of coffee trees.

 

Lenders consider on overseas loans

 

Local commercial banks said they were considering on seeking medium- and long-term loans from foreign financial institutions as the competition for mobilizing capitals from domestic depositors among themselves were getting fiercer. 

 

Statistics from the National Financial Supervisory Commission show the short-term credit of foreign-owned financial institutions has grown by an average of US$800 million per month so far this year.

 

Experts said the lending growth heavily relied on credit rating agencies including Moody’s Investors Service and Standard & Poor’s, who cut Vietnam’s credit rating in December with a negative outlook.

 

Moody’s, which rates the Southeast Asian country four levels below investment grade at B1, cited the risk of a balance of payments crisis and a drop in foreign reserves as inflation accelerates and the currency weakens. S&P has concerns over the Vietnam’s banking system and ranks the country at BB-, the third highest non-investment grade level.

 

The country’s gross foreign-exchange reserves fell to $12.4 billion by the end of 2010 from $14.1 billion in 2009 and $23 billion in 2008, the World Bank said in March.

 

Vietnam’s reserve/short-term debt ratio is getting worse as it increased to around 70 percent from 35 percent year-on-year in 2010. The rising rate leaves local commercial banks suffering high lending rates from foreign financial institutions.

 

Depositing interest rates of Vietnam was moving up on the foreign credit rating agencies, a deputy general director of DongA Bank, who asked to be unnamed, told Dau Tu Tai Chinh Newspaper.

 

“The lending rate of foreign financial institutions is always higher than the domestic rate. The saving rate on dollars of 3 percent per annum of local commercial banks will remain lower than foreign rates, even if we add extra fees of about 3.5-4 percent per annum into the domestic rate,” he noticed.

 

Financial experts expected that the dollar-dong exchange rate would hardly change in upcoming months due to a weakening Vietnam dong, which came from the rampant inflation, and the weakening greenback against other foreign currencies.

 

The central bank estimated the balance of international payment deficit amounted to around $2 billion, while the National Financial Supervisory Commission said the amount was more than $1 billion.

 

Analysts said despite the difference, the two figures showed that the balance of international payment was no under heavy pressures from the foreign exchange rate.

 

The State Bank of Vietnam capped foreign-currency deposit rates at 3 percent for individuals and at 1 percent for non- credit institutions last month. It also raised the amount of dollar deposits lenders must set aside as cash by 2 percentage points. Some small banks have been collecting as much as $15 million every day from customers wanting the dong, the government said on its website on April 27.

 

Farmers prefer pepper to coffee 

 

Vietnamese farmers have rejoiced, as the pepper prices have soared in the central provinces making many farmers in the region into instant billionaires.  

 

Farmers in the central province of Gia Lai were happy to reap profits from 6,000 hectares of pepper.  Hundreds of farmers in district Chu Prong harvested 10 to 30 tons of pepper and became enormously rich. Nguyen Van Tap, a farmer from Ia Pia commune said he earned VND2.5billion in this year’s crop.

 

Those farmers who did not plant pepper were in despair. With this rise of wealth, they did not hesitate to chop down coffee plants to sow pepper instead. In district Chu Prong, many coffee gardens were destroyed.

 

Ngo Van Tu, a farmer in the district, who has planted coffee for over 20 years said, “I did not earn much from coffee so I destroyed the garden to grow pepper instead.”

 

However, many pepper farmers also saw the other side of the coin. Farmer Pham The Vinh in district Chu Se, who has 2 hectares of pepper, lost VND1 billion when he invested in planting pepper in dried soil. As a result, two hectares of pepper died due to water shortage.  Some other farmers were in debt because they lacked experience in pepper farming.

 

Hoang Phuoc Binh, deputy head of the Pepper Association in Chu Se, said farmers must spend VND150, 000 for construction of cement pillars. Moreover, they must spend around VND700million on seed and labor. Farmers can go into debt if next years pepper crop is not as good or if the pepper crop is hit by disease.

 

Vietnam traders forced to pay unfair shipping fees: ministry 

 

Foreign shipping lines have imposed unreasonable surcharges on local customers, a report said.

 

Foreign shipping lines have taken advantage of Vietnam’s underdeveloped transportation industry to impose unreasonable surcharges on local customers, a transport ministry report said.

 

The Ministry of Transport discovered at least 10 irrational fees that foreign shipping lines had collected, including “congestion,” “container imbalance” and “container repair” charges, news website VnExpress reported Monday.

 

These surcharges alone could bring thousands of US dollars to foreign companies for every shipment they deliver. However it would leave Vietnamese traders in a difficult situation and push up prices of imported goods, VnExpress cited the ministry’s report as saying.

 

According to the ministry, local companies had to accept those fees because Vietnamese shipping lines failed to meet domestic demand.

 

The country now has a fleet of 36 container vessels, mainly owned by the Vietnam National Shipping Lines. The fleet can only meet 20 percent of transportation demand so foreign companies can easily control the market, especially during peak shipment seasons.

 

The Ministry of Transport proposed that the Ministry of Industry and Trade review all the shipping surcharges and related regulations to stop foreign companies from charging unreasonable fees.

 

At the same time the ministry called for measures to develop a strong shipping industry for Vietnam, starting with increasing the number of container ships and developing human resources.

 

Vietnam’s government in mid March ordered the Ministry of Transport to lead a task force to inspect shipping lines in Ho Chi Minh City and Da Nang, following complaints that some shipping lines were asking Vietnamese importers for excessive surcharges.

 

Shipping companies said such fees were necessary. For instance, the “container imbalance” charge was meant to offset the cost of transporting empty containers out of Vietnam in case exports from the country are unable to match the inflow of goods, they said.

 

The Finance Ministry, however, argued that as many shipping lines raised their fees at the same time, they could be violating antitrust regulations.

 

Vietnam to build more steel plants

 

Nine more steel-making plants in Vung Tau, Binh Duong and Da Nang will be up and running by this year’s end, the Vietnam Steel Association (VSA) has said.

 

VSA said the total capacity of these plants would reach 2 million tons of construction steel and 1 million ton of rough draft steel per year.

 

Up until this April, total production capacity of all steel plants in Vietnam was 8.99 million tons per year, while total consumption was only 6.32 million tons per year.

 

Steel consumption accounts for only 50 to 60 percent of total production capacity, so there seems to be no shortage of steel in the local market.

 

Two more foreign cargo airlines enter Vietnam

 

Saudi Arabian Cargo Airlines and Jade Cargo International from China have been granted a license to operate in Vietnam, the Civil Aviation Administration of Vietnam has said.

 

Arabian Cargo Airlines is now licensed to offer flights between King Khaled in Saudi Arabia, Shanghai in China and Ho Chi Minh City every Wednesday, Friday and Sunday.

 

Jade Cargo International will provide services on several routes connecting Hanoi with Shanghai, India, and Dubai.

 

IP to emerge on now-defunct Ca Na steel complex

 

The Prime Minister has approved a proposal by Ninh Thuan Province to develop an industrial park on the inactive Ca Na steel complex whose license will be revoked soon, a provincial official said.

 

In his document of approval, the Government leader asked the chairman of the province to consult relevant ministries and agencies on how to develop this IP on the 1,000-hectare site of the steel complex.

 

Pham Dong, director of the provincial Department of Planning and Investment, told the Daily on the phone that his province was finalizing procedures to revoke the investment certificate of the steel complex due to the investors’ financial constraints.

 

In February this year, authorities of Ninh Thuan Province said they were looking for clean-technology projects to replace the Ca Na steel complex following the Government’s nod to cancel out the US$9.8-billion steel project.

 

The Ca Na steel complex project is a joint venture between Malaysia’s Lion Group and the state-owned Vietnam Shipbuilding Industry Group (Vinashin).

 

The partners of the joint venture have failed to realize their commitments to developing the project in line with the investment certificate. Provincial leaders ascertained that the investors had struggled with financial constraints, and lacked experience in the field of steel production.

 

Dong of the provincial Department of Planning and Investment said the area of the complex was attracting many other investors in many sectors. However, he said, provincial authorities would not call other steel investors for the steel complex, but preferred some other sectors like petrochemical and refining industry, and infrastructure including a deep-water seaport, instead.

 

“The change is aimed at using the land effectively, protecting the environment and attracting investments for developing manufacturing in the province in accordance with Ninh Thuan’s socio-economic development plan,” he said.

 

Ca Na is the biggest steel project to have been licensed in Vietnam and is also the largest-ever foreign-invested project. In 2008, the investment certificate was granted to the joint-venture between Maju Stabil Sdn. Bhd, a unit of Malaysia’s Lion Group, and Vinashin, with the latter pledging to contribute a 26% stake in terms of both capital and land.

 

On November 23, 2008, the ground-breaking ceremony for the project took place, and the investors then promised to complete the first phase in 2008-2011. Major facilities planned by the investors for the first phase included a steel mill to produce hot-rolled steel products with an annual capacity of 4.5 million tons, two thermo-power plants with a capacity of 1,450MW, and a seaport with a handling capacity of 15 million tons a year.

 

To date, no progress has been made in its construction. After the ceremony, only part of the site clearance work had been done though Vinashin had spent billions of Vietnam dong on the work.

 

Tra fish sells well in Europe

 

European nations have seen strong consumption of Vietnamese Tra fish compared to traditional cod, said David Little from the University of Stirling in Scotland. 

 

Europe’s Tra fish imports have stayed stable over the past three years with annual import volume of 220,000 tons, Little, head of the EU-backed Sustaining Ethical Aquaculture Trade (SEAT) project, said at a seminar in Can Tho City over the weekend.

 

However, Little pointed out that Tra fish farming in the Mekong Delta is under international scrutiny after a documentary by the World Wildlife Fund (WWF), which was broadcast at the seminar. The film was made after an investigation on 100 local farmers and processors.

 

The WWF’s documentary film was broadcast in Germany two months ago, Little said, adding the SEAT project had to prove that many scenes in the film were incorrect.

 

The film might have been made to limit Vietnamese Tra fish consumption in Europe. Therefore, more information should be disseminated to help global consumers know more about Tra fish and seafood products in general, he added.

 

The SEAT project aims to raise sustainability of production and trade of aquaculture products from Bangladesh, China, Thailand and Vietnam. In Vietnam, the project covers Tra fish and tiger shrimp.

 

Falling prices hit dragon fruit traders

 

Dragon fruit traders in Binh Thuan Province claimed they had racked up losses of over VND50 billion within two weeks due to lower prices and consumption in the Chinese market.

 

Truong Thi Huong, a dragon fruit trader in Binh Thuan Province, told the Daily on Monday her company had shipped some 160 tons of dragon fruit to China in the past two weeks with lost revenue amounting to VND1.3 billion.

 

Huong, who has over 20 years’ experience in dragon fruit trade in Binh Thuan which is home to around 70 dragon fruit exporters to China, said, “The dragon fruit traders in the province have incurred losses of an estimated VND50 billion in the past two weeks.”

 

The cost of transporting the fruit from Binh Thuan to China is increasingly high given high fuel costs, at around VND75 million per 20-ton container. Many of the traders have been compelled to sell the fruit at a loss in China, she added.

 

Pham Huu Le, a farmer in Ham Chinh Ward of the province’s Ham Thuan Bac District, said the dragon fruit price had been hovering around VND8,000 per kg, compared to about VND20,000 more than two weeks ago.

 

Le said the price and demand were expected to recover in July this year when growers start the main crop.

 

According to the Binh Thuan Dragon Fruit Association, the province has around 13,000 hectares under dragon fruit cultivation with total annual output of 450,000 tons. The farmers in the province often face the “good crop and poor price” problem in the lead up to the main farming season.

 

Local businesses keen on Japanese market

 

Vietnamese companies showed great interest in a recent online business conference on the Japanese market, posing numerous questions to organizers.

 

A number of local exporters in the seafood, clothing, plastics, tea and floral industries, raised their queries about the Japanese market at the online conference held last week by the Ministry of Industry and Trade (MoIT).

 

Officials of the ministry provided local exporters with updates of the Japanese market and goods that Vietnam could supply for the country.

 

According to Vo Thanh Ha at the MoIT, the earthquake and tsunami on March 11 lowered Japan’s demand for consumer products in the short term, such as clothing, footwear and seafood. In addition, the disaster may cause a short-term stagnation of exports of parts from Japan to Vietnam and imports of components and materials from Vietnam.

 

However, the official said at the online conference that the market’s demand of goods which Vietnam has a foothold may recover one year after the nuclear disaster in Japan is under control.

 

Ha explained Japan’s consumers would need seafood and farm produce imports as they are avoiding goods originating in areas affected by radioactivity from the Fukushima Daiichi nuclear power plant. 

 

Vietnam has the advantage of supplying products in the medium segment. Therefore, the demand of the produce is less affected by the disaster and is expected to rise next year when Japan has recovered.

 

There is also the Vietnam and Japan Economic Partnership Agreement (VJEPA) which took effect in October 2009 and brought down the tariff to 0% from 94% of Vietnam’s exported goods value to Japan in the next ten years.

 

Last year, Vietnam exported goods worth US$7.73 billion to Japan, up nearly 23% year-on-year, accounting for 10.7% of total exports. Meanwhile, Vietnam imported US$8.1 billion worth of goods from Japan in 2010, an increase of 8.4% compared with 2009, making up 11.3% of Vietnam’s total imports.

 

A number of Vietnam’s goods entered the Japanese market, but was still in modest volume.

 

The event was the second in a series of online conferences to be held this year in the framework of the EU–Vietnam MUTRAP III, following the recent online conference on the EU market.

 

Government considers three housing funds

 

The Government is weighing a plan to establish three funds for housing development in a move to support the property market development and to build more houses for low-income earners in the country.

 

Deputy Prime Minister Hoang Trung Hai last week asked the Central Steering Committee for Housing Policy and Real Estate Market to draft a plan of establishing the three funds comprised of a housing development fund, a housing saving fund and a property investment fund.

 

The Government’s website reports the move as a breakthrough in stabilizing the local housing development market once those funds are translated into reality.

 

Nguyen Tran Nam, Deputy Minister of Construction, said most property projects had been developed with funds coming from three main sources, including the developers’ equities, loans from banks and funds mobilized from customers.

 

The three sources, according to Nam, are still inadequate and many cash-strapped developers find themselves financially incapable when the market goes down. Therefore, the draft plan for housing development with the three funds would help them overcome this situation.   

 

In fact, the housing development fund is provided for in the Housing Law, but such a fund has not been launched in the country except for HCMC where such a fund has been established mobilizing some VND1,000 billion.

 

Income for the fund, besides allocations from provincial State budgets, will also come from rents of state-own properties and partly from land use fees.

 

Meanwhile, the housing saving fund is expected to be established as a non-profit credit institution which will directly be managed by a government agency. The fund will offer homebuyers with loans or support developers who build budget housing projects for the poor and policy people.

 

The fund will receive capital from land resources, the state budget and other economic organizations.

 

Meanwhile, the property investment fund will operate in accordance with the Securities Law, allowing investors to buy fund certificates instead of directly buying a certain property. The fund manager will represent investors to purchase and sell and manage the property.

 

The property investment fund will attract many investors because it calls for capital through the stock exchange.

 

The deputy prime minister urged the central steering committee to quickly finish the draft and map out a mechanism to facilitate the establishment of such funds in a move to stabilize the local property market in the coming time.

 

Sugar firms sweet on exports

 

Local firms are racing for sugar exports to China on the heels of huge sugar stockpiles in the domestic market.

 

“China faces a shortfall of two million tonnes of sugar. Local firms can make use of the opportunity to lessen their stockpile volumes,” said deputy general director of Quang Ngai Sugar Joint Stock Company Cao Minh Tuan.

 

Tuan said there was an unfair competition between local firms racing to export sugar to China.

 

“Our company came to China for a market survey after getting to know about sugar shortages in China and exported about 10,000 tonnes of sugar to the market. However, some other local firms offered lower prices to lure customers. The Chinese partners then compelled local firms to sell products at lower prices,” Tuan said.

 

Many sugar firms blame the Vietnam Sugarcane and Sugar Association’s current poor information system.

 

“Our local firms want to know more about Chinese market’s sugar demand and more relevant information, but no government agencies could respond us. How can we properly orientate our export plans with such poor sources of information,” said the director of a sugar factory.

 

Local firms vying for sugar export to China made industry insiders give out a warning about possible sugar shortage in the domestic market by the year end.

 

The shortfall might occur in the third quarter of this year unless proper measures were taken to control sugar exports to China, said Bien Hoa Sugar Joint Stock Company chairwoman Pham Thi Sum.

 

Sum said around 2,000-3,000 tonnes of sugar were exported to China each day.

 

In this context, Tuan suggested flexibly applying sugar export policies to take advantage of favourable world market pricing terms and help local firms disentangle.

 

Of the same mind, Bien Hoa sugar company general director Nguyen Van Loc recommended the government apply the Indian model which green-lighted businesses to export sugar, but they must import similar sugar volumes in a certain period of time.

 

Exports to China are considered a situational remedy to local sugar firms in the present context. “Exports to China are fragile and may stop at any time,” Tuan said.

 

Loc attributed huge sugar stockpile, over 500,000 tonnes as of April 15, 2011 according to Ministry of Industry and Trade figures, to the nation’s sugar sector’s poor performance.

 

The Ministry of Agriculture and Rural Development urged sugar firms to carefully select raw materials to ensure sugar quality. Firms were also required to set proper pricing terms which can harmoniously balance the firm, the farmer and consumer interests.